Married couples who are going through divorce often overlook some key financial issues that need to be reviewed during the divorce process.
These are often considered after the divorce is final, but may have the potential for bringing problems if not addressed during the divorce process.
Individuals who have done estate planning as a couple need to carefully review whether the decisions (and documentation) made remain appropriate during a separation and the dissolution of the marriage.
It is important to remember that the law still considers you married until a judge actually signs the final order and decree officially dissolving the marriage.
Estate laws vary somewhat from state to state, but under a number of states' laws, even the finalization of the divorce does not necessarily terminate your ex-spouse's authority that you have given him in wills, powers of attorney, beneficiary designation, or as a healthcare surrogate through a living will.
If you have signed a durable power of attorney designating your spouse as your agent if something happens to you, you may need to revoke that document.
Do you want your estranged spouse to be able to act in your name to make financial decisions, enter into debts, sell assets or properties, while you are going through a challenging divorce? If you were to become disabled or incapacitated, do you want that estranged spouse to be the person to make even life and death decisions in your behalf? If you do not have a will, and you passed away during the course of the divorce, your estranged spouse would automatically have control of your estate and would be entitled to at least half of your estate (depending on whether or not you have children).
If you do have a will or trusts, you will want to carefully consider if the will and trusts are set up as you currently want them to be, given the transitory state of your marriage.
You may want to make changes to the will, giving the authority or control to someone other than your estranged spouse.
Should you become disabled or incapacitated, typically a spouse would be designated as your guardian.
If you are in the process of divorce, you may not want your spouse to have that control in your life.
If not, then you will want to designate a different person to have that authority in case such a situation arose.
It is important to review beneficiary designations in bank accounts, investment accounts, insurance accounts, etc.
Review these immediately and make desired changes right away.
Likewise, if you have prepared healthcare surrogate documents and a living will, consider whether you want your spouse to remain designated as your agent in the case of needing to make life or death decisions, and make appropriate changes as needed.
Should you realize that you need to make changes in your estate plans during the interim between separation and the finalization of your divorce, you need to: •Consult a qualified estate planning attorney to be certain that changes you desire are clearly made to your estate, and that your specific state's rules are followed in making the changes you desire •Notify all appropriate financial institutions of any changes of power of attorney •Record any revocation of power of attorney or changes to your will in public records •And, destroy old documents to avoid any confusion.