After a divorce in New Jersey, it’s surprising to see just how much property must be split between couples and documents and records that should be updated, such as retirement assets, insurance policies, and Wills.
In some states, your ex-spouse is automatically removed from any paperwork involved in your estate plan, but this is not a common practice. For example, if you are incapacitated or pass away, the listed directive and beneficiaries will be enforced, even if it is your ex-spouse, unless you specifically remove their name from the documentation. Unfortunately, these tiny details are often overlooked after a divorce proceeding.
That said, if you fail to remove your ex-spouse’s name, there are six key documents that could entitle them to your estate. By working with your divorce or estate planning attorney, or by giving your divorce agreement to an attorney, they can help guide you through what your legal obligations are to your ex-spouse. Additionally, they can assist you in determining which documents you can to ensure your estate transfers to individuals you wish. When meeting with your attorney, it can be useful to have a basic understanding of relevant documents to know what questions you need to ask.
Health Care Proxy
A Health Care Proxy is the person designated to make health care decisions for you if you cannot make those decisions for yourself. Often, a person cannot make their own choices if they are unconscious or unable to communicate due to a specific type of injury. In these situations, the healthcare proxy will step in to make healthcare decisions that might impact your quality of care and what treatments you are given.
In many cases, the law views your spouse as your healthcare proxy once you are married. However, after a divorce, if you have previously prepared a Health Care Proxy, your ex-spouse may still be listed as your healthcare proxy.
Power of Attorney
A Power of Attorney and a Health Care Proxy are often confused with one another as they fulfill similar functions. While a Health Care Proxy designates medical decisions, a Power of Attorney takes over financial and personal affairs for the incapacitated or deceased. Your Power of Attorney may be listed as your ex-spouse, which can cause problems if you feared they would use your investments and property in a way that goes against your wishes or against your estate’s best interest.
Life Insurance Requirements
Life insurance policies can be incredibly beneficial upon the death of a spouse. However, after a divorce, they can become complicated matters. Depending on the case, you may be required to maintain your ex-spouse’s life insurance policy even after your divorce proceedings. This question can cause major financial problems down the road, along with substantial paperwork.
Wills and Trusts
If you have a Will or Trust, your ex-spouse may be listed as an Executor or beneficiary of the Will or a Trustee of the Trust. If you were to pass away, your former spouse might gain control over your estate and trust funds, which can be against your wishes and/or detrimental to your children’s and extended family’s mental, emotional, and financial health. It is important to note that, you may have obligations within your divorce settlement with respect to financial assists you must leave to your minor children in the event you predecease them.
Additionally, if you have any trusts for minor children, your ex-spouse may also have control over their Trusts until your children turn 18 or the specific age listed within the Trust. If you specify the Executor of your Will and Trustees to your Trusts, you can guarantee that your possessions and financials are distributed according to your desires.
Guardianship for Minor Children
During a marriage, if a spouse dies, there is a rebuttal presumption that other parent will be awarded custody, unless there are specific circumstances, including but not limited to if the Court determines the living parent is unfit or unable to care for the children. If a party has sole custody prior to their passing, they may wish to explore guardianship options for the children.
In some Marriage Settlement Agreements, if an ex-spouse dies, the surviving partner may be entitled to receive the deceased partner’s retirement plan, as payment for unsatisfied obligations, such as alimony, child support, and/or lump sum awards. However, your ex-spouse may also receive a portion of your retirement plan after a divorce. It is important to protect your remaining or individual retirement assets by updating your beneficiary designations to ensure that your 401k, IRA, and other retirement accounts go to the people you believe to be most deserving.
Contact an Attorney to Learn More About Estate Plans After Divorce
To learn more about how a divorce can impact your estate plan or to begin your estate planning, reach out to a skilled attorney at the Williams Law Group today. An attorney can guide you through the process of preparing and updating documents to ensure your assets are protected after your divorce. If you or someone you know has a question regarding estate planning, call the Williams Law Group today to learn more about how we can assist you.