We’ve written about the importance of updating your beneficiaries, but when you’re going through a divorce, should you update your estate plan while navigating separation or after the divorce is finalized? If you do not have an estate plan, an excellent time to create one is when your marital status changes.
Your estate plan directs exactly how you choose your assets to be divided when you pass away, and includes direction on who will make important healthcare and financial decisions on your behalf in the event you become incapacitated. Several variables affect equitable distribution of assets in a North Carolina divorce: Prenuptial agreements, assets acquired during the marriage, dependents, income earning capacity of each spouse, and more.
It is important to revise your estate plan before your divorce is finalized, although some changes may not be effective unless a separation agreement and property settlement agreement have been signed. As you move toward dissolving your marriage, you most likely do not want your spouse to be responsible for making medical or financial decisions if you are incapacitated. When you update your estate plan you can include powers of attorney that appoint an agent of your choosing with the authority to handle these matters. You can also designate secondary agents in the event your primary choices are incapacitated. An estate plan can also include instructions that will reflect your burial wishes. You may also want to update or create trusts that can provide for your children’s needs or the needs of any other dependents you may have.
Working with a North Carolina estate planning attorney to update or create an estate plan before and after your divorce will help ensure protection for you and your assets. Mere physical separation does not terminate your spouse’s rights under estate planning documents you have created; nor does it terminate inheritance rights under North Carolina law. For the best protection you will need a property settlement agreement and new estate planning documents.