Divorce is a life-changing event, and its many far-reaching consequences go way beyond a change in marital status. Whether you are in the middle or at the end of a divorce, you will want to make sure to revise your estate plan to reflect your changed circumstances. As an experienced estate planning attorney in Downers Grove, I can guide you through the changes you need to make to protect your assets and carry out your wishes, given your updated life situation. Here are the things you need to know about revising an estate plan after divorce in Illinois.
Your will and any trusts you have also probably need revision. Illinois law (755 ILCS 5/4-7) provides that any disposition of property to a former spouse in a will that was in existence prior to the divorce is automatically revoked. However, as part of revising your estate plan, you will want to update your will yourself regarding any changes in your beneficiaries, executors, and trustees. This is because other parts of your will might still inadvertently favor your former spouse.
Illinois law also revokes any agency granted to a former spouse in a power of attorney for health care or property upon divorce. While it is automatic, updating these documents is the wise thing to do when designating a new person to handle such critical roles. You would not want there to be any confusion about your current wishes in the event of your incapacity.
Review and update beneficiary designations on retirement accounts, life insurance policies, and other financial products. As set out by Illinois law, divorces do not serve to revoke the designations naming a spouse as a beneficiary of those specific accounts unless specifically required by a divorce decree or settlement agreement. Failure to do so may mean your ex-spouse receives benefits you intended to go to others.
If you have minor children, then it is even more important that you consider updating and revising your estate plan after your divorce. That would include setting up or modifying trusts to handle any inheritance they may receive or altering the trustees. It may also include your choice of guardian in case of death or incapacity may change. You should also consider if there is adequate life insurance held by you (or your ex) to help provide for the children’s needs should either one of you die.
In today’s digital world, assets can change forms readily. Cash can be turned into cryptocurrency or reinvested in online brokerage accounts. Assets may be transferred to online pay platforms like Venmo or Paypal. Retirement assets can be transferred easily from one spouse’s financial institution to another very quickly. Any joint accounts with your ex-spouse are to be closed or transferred in the name of one sole owner. If you don’t take the time to reevaluate your estate planning strategy, you may be overlooking the expanded investment opportunities that this digital world provides.
Updating your estate plan makes sure your assets are distributed according to your updated wishes and the right people have the authority over your affairs; this also prevents an unwanted ex-spouse from having control or receiving assets due to outdated documents.
You will want to start revising your estate plan just as soon as your divorce is final. Sometimes you will want to make some changes even before you get your divorce, especially where the estates are complicated or substantial assets are at stake.
If you do not update your estate plan, your ex-spouse may retain powers or inherit assets that you no longer wish them to have. Such a scenario may lead to conflicts among your heirs and could even result in legal challenges against your estate.
While it is technically possible for an ex-spouse to challenge any changes, such challenges are only likely to succeed in cases where there’s evidence that the changes were made under some sort of duress or if you were not of sound enough mind to make the decisions. Having a qualified attorney help with the updates can help mitigate these risks.
Consider trusts, guardianships, and life insurance policies to protect and provide for your children. Your attorney can help you set up arrangements that ensure your children’s financial needs and welfare are taken care of in your absence.
An update of your estate plan after divorce is a critical step in starting your new life off on the right foot. The attorneys at SBK Law Group understand how complex revising your estate documents may be after a divorce. Contact our Downers Grove estate planning attorney at SBK Law Group by calling 630-427-4407 to receive your free consultation. We proudly serve clients throughout Downers Grove and all of Chicago, Illinois. Let us at Jones and Swan help you make sure your estate plan currently reflects your wishes and is set up to best protect your future.