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During a divorce, there are five essential changes you should make to your estate plan to protect yourself and your assets. In Idaho, after a divorce is final, your ex-spouse is prohibited by law from inheriting your assets. However, if you die while your divorce is pending, these protections are not available and your spouse would likely inherit all of your assets, either under the terms of your current estate plan or under state law if you do not have an estate plan. This is probably that last thing you want to happen. Here are five steps to take when you file for divorce (or if you are contemplating filing for divorce) to exercise as much control as possible.
1. Update Your Will or Trust. In a typical estate plan, most spouses leave everything to each other. Your Will or Trust should be updated as soon as possible leaving your half of the community property, and all of your separate property, to someone other than your spouse. If you don’t have a will or trust, you should prepare one. Otherwise, your spouse will inherit all of your assets under state law.
2. Create a Children’s Trust if You Have Minor Children. If you have minor children, you should have a trust that names someone you choose as trustee to manage the assets your children inherit from you. If you don’t have an estate plan designating a trustee, your spouse will control these assets if something happens to you.
3. Revoke and Update Power of Attorney for Finance. A Power of Attorney for Finance allows you to nominate someone to manage your finances if you become incapacitated. Most spouses nominate each other as their agents and, in many cases, this power is immediate, meaning your spouse can access all of your accounts and assets, even if they are in your name alone. You want to revoke these powers as quickly as possible and provide notice to your spouse of your revocation. You also want to choose someone else to act as your agent.
4. Modify Medical Power of Attorney. You also likely have a medical power of attorney empowering your spouse to make health care decisions on your behalf. Given the current situation, your spouse is probably not who you want making these decisions. Revoke any medical powers of attorney naming your spouse, nominate a new agent, and notify your health care providers of this change.
5. Update Your Retirement Plan Beneficiary Designations. Your spouse is likely listed as the primary beneficiary of your retirement plan. Update your beneficiary designations to name someone other than your spouse. Although your spouse is probably entitled to a portion of your retirement account as part of the divorce, changing this designation now protects your interest in your retirement account.
At Shaila Buckley Law, we specialize in helping clients with this process to ensure your estate plan protects you during, and after, your divorce. Questions? We’d love to help. Give us a call at (208) 995-9224 or send an email to firstname.lastname@example.org.