Divorce demands careful consideration of various aspects, including financial and legal implications. Among these considerations is revisiting your estate plan in New York.
Divorce can affect your existing estate plan in many ways and may mean your plan does not align with your current wishes.
Beneficiary designations
One significant aspect of your estate plan is the designation of beneficiaries for your assets, such as life insurance policies, retirement accounts and investment portfolios. During divorce, relationships change. Update these designations to align with your current intentions. Failing to do so may result in unintended consequences, such as leaving assets to a former spouse.
Guardianship considerations
Your spouse may be the primary guardian for your children under your initial estate plan. However, divorce alters this dynamic. Reassessing and updating your estate plan lets you entrust the well-being and care of your children to individuals who align with your current preferences and circumstances.
Financial circumstances
Divorce often brings about significant changes in financial circumstances, affecting your overall estate. For example, the median household income in New York City is $76,607. It can change considerably after a divorce.
Adjusting your estate plan to reflect these changes is important for an accurate distribution of assets. This may involve revising the distribution of real estate, investments or other financial accounts to align with your newly established financial situation.
Powers of attorney and health care directives
Your estate plan likely includes documents related to powers of attorney and health care directives. These documents grant authority to individuals to make financial and medical decisions on your behalf. In the event of divorce, reassessing and potentially updating these designations ensures that the right individuals have such responsibilities based on your current circumstances.
Revisiting your estate plan is a proactive step toward safeguarding your interests and the well-being of your loved ones.