Clean Slate: Estate Planning After Divorce
Divorce is one of life's major transitions, and while you're probably focused on dividing assets and adjusting to a new normal, there's another critical task that often gets overlooked: updating your estate plan.
We have seen it happen too many times—someone goes through a difficult divorce, gets everything settled, and then years later we discover their ex-spouse is still listed as the beneficiary on their life insurance policy or as the executor of their Will. Let us make sure that does not happen to you.
Beneficiary Designations: The Most Common Oversight
Here is something that surprises most people: your Will does not control everything. In fact, some of your most valuable assets—like retirement accounts, life insurance policies, and investment accounts—pass directly to whomever you have named as the beneficiary, regardless of what your Will says.
After a divorce, you will want to review and update beneficiaries on:
Life insurance policies
Retirement accounts (401(k)s, IRAs, etc.)
Investment and brokerage accounts
Bank accounts with payable-on-death (POD) designations
Any annuities or pension benefits
Georgia may automatically revoke your ex-spouse as a beneficiary on certain accounts after divorce, but do not rely on this protection alone. It is much cleaner to affirmatively update these designations yourself. Plus, you probably want to choose who should receive these assets rather than leaving it to default rules.
Rewriting Your Estate Planning Documents
If your ex-spouse is named anywhere in your Will, Trust, Power of Attorney, or Health Care Directive, those documents need to be completely redone. This is not just about removing their name—it is about rethinking your entire plan.
Consider these questions:
Your Will and Trust: Was your ex-spouse named as executor or trustee? Who should serve in that role now? What about alternate beneficiaries—did you name your ex's family members, like their siblings or parents, to inherit if something happened to both of you? Those provisions may need to be reconsidered.
Powers of attorney: You probably no longer want your ex-spouse acting on your behalf with regard to your finances if you become incapacitated. Choose someone you trust completely.
Health care directives: Same principle applies—you may not want your ex-spouse making medical decisions for you. Update your health care directive to reflect your current wishes and relationships.
Planning for Your Children
If you have kids, this is where estate planning after divorce gets more nuanced. Your ex-spouse is still your children's parent, but that does not mean you cannot structure things thoughtfully.
Trusts for minor children: If you pass away while your children are minors, you might want assets held in trust for them rather than going directly to your ex-spouse. A trust allows you to:
Name a trustee you trust (who may or may not be your ex-spouse) to manage the money
Set guidelines for how funds should be used (education, healthcare, etc.)
Determine when children receive full control of their inheritance
Ensure the money is actually used for your children's benefit
Guardian vs. trustee: Remember, the person who raises your children (the guardian) does not have to be the same person who manages their money (the trustee). You might be comfortable with your ex-spouse raising the kids but prefer a trusted family member or friend to oversee the financial side.
Fixing Title Issues
Divorce decrees specify who gets what, but the legal work does not always get done to actually transfer those assets. This can create a mess for your estate later.
Real estate: If the divorce decree says you get the house, make sure the deed is actually updated to remove your ex-spouse's name. Similarly, if your ex was awarded property, ensure your name is removed from those deeds. Having your name on property you do not own (or vice versa) can create probate complications and potential liability issues.
Business assets: If you and your ex-spouse owned a business together, the divorce should have clarified who owns what. Make sure:
Corporate documents (operating agreements, bylaws, stock certificates) reflect the current ownership
Buy-sell agreements are updated or created
Succession plans in your estate plan account for your business ownership
Bank accounts: Joint accounts should be closed or converted to individual accounts. If you are keeping an account that was previously joint, get documentation showing your ex-spouse has been removed. And remember to update your beneficiary designations while you are at it.
In Conclusion
Estate planning may not be at the top of your post-divorce priority list, but it is one of the most important steps you can take to protect your future. You have worked hard to establish your independence and protect your interests—do not let outdated estate planning documents undermine all of that.