Are you recently divorced or recently remarried and think that you have closed the book on the prior chapter with your former spouse? Well, perhaps you still have a foot in that door. Many times beneficiary designations are not updated to reflect the current reality. I recently worked with a client who had just divorced and the ex-spouse, who had since remarried, died in an accident. There were issues with life insurance proceeds, prior company ownership and debt obligations. A few hours of work could have saved on months of time and stress for the children, surviving spouse, and ex-spouse to resolve these issues.
With significant life changes, remember to address these three items:
1-Update life insurance policies and financial accounts to remove your ex-spouse as a beneficiary and update a primary and contingent beneficiary. If you die unexpectedly, that could be a windfall for your ex and not the people you intended.
2-Update the trust documents, in particular the trustee and beneficiary designations. If the trust remains funded, the unmodified trust could leave your ex in charge of the trust assets and a viable claim for financial support by the trust.
3-In case you have recently married, update the financial accounts and your trust documents. It may be that you want to keep certain assets separate from your second marriage or you may want to have your new spouse a named beneficiary.
Remember a little time to update your planning and documents will save you or your loved ones from unexpected consequences. If you have question on this topic or estate planning matters, you may reach me at matt@utahcase.com
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