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Divorce stinks. It’s awful for everyone and usually involves paying seemingly (and often actually) exorbitant sums of money to attorneys. Undoubtedly, the last thing you want to do after your divorce is meet with yet another attorney to discuss – of all things – estate planning.
But the period after a divorce is a critical time to address your estate plan. Under an Idaho law passed in 2018, an ex-spouse is treated as if they predeceased their spouse for the purposes of a will or trust. In simple terms, this means that if the will you created when you were married left everything to your spouse, then after you die, your assets would go to whomever you designated in your will after your spouse.
Given this law, why should you redo your estate plan? First, with your ex-spouse out of the picture, you should think about how you want your estate distributed. You may find that your feelings now are quite different than when you were married.
Second, an important part of a comprehensive estate plan includes designating who you want to make medical and financial decisions for you if you become incapacitated (in the form of a durable power of attorney for health care and a power of attorney for finances). For some couples, the only person they designate is their spouse. Without a backup listed, and with your ex-spouse prohibited by law from assuming this role, you have no one to make these decisions. This is not a desirable result.
Third, in my experience, most people don’t want their ex-spouse to play any role in managing their assets if they die. But, if you have children and don’t have an estate plan designating a trustee to manage the assets your children inherit from you, there is a high likelihood that a Court would appoint your ex-spouse to this role.
Fourth, redoing your estate plan ensures the least amount of hassle for your family. Although Idaho law prohibits an ex-spouse from inheriting your assets, the financial institution holding your retirement account and life insurance company may not know you were divorced. These types of assets pass outside of probate directly to whomever you named as your beneficiary (on forms you likely filled out years ago). The last thing you want is for your heirs to have to try to collect funds improperly paid to your ex-spouse, especially if your divorce did not end on good terms.
Last, unlike the attorney fees accrued in your divorce – which undoubtedly were hard to predict and multiplied at unsettling rates – redoing your estate plan, at least in my office, involves a flat fee. You’ll know the cost up front and will be able to ask questions without worrying about how many billable minutes just went by.