Divorce is said to be one of the most traumatic events in a person’s life. After going through this traumatic event, along with the many life changes you will have, you should review any financial documents that may need to be updated.
Estate plan changes
While you were married, you may have set up an estate plans with your spouse. Now your life has changed, and those plans will need to be updated in several key areas:
- Power of attorney
- Health care directive
- Your will
It is likely you assigned your spouse as your power of attorney for health care decisions and financial decisions. You will need to update these designations after divorce. Choosing a new POA involves selecting a trusted friend or relative who has strong decision-making traits and an understanding of what will be asked of them if they have to handle decisions and finances for you.
In Pennsylvania, it’s important to make sure beneficiary designations are up to date because these designations will likely trump any designation made in a will. You may have designated your spouse as the beneficiary to your bank accounts and life insurance policies. If you have children, you may choose to list them as beneficiaries. If you don’t have children, you could select another important person or relative in your life. Some people choose to designate a favorite charity or organization they believe in, as well.
- Retirement accounts and pensions
Contact the companies that hold your 401k and any IRA accounts and any other investments to have beneficiaries changed. You can likely accomplish this easily through an online system. The accounts should allow you to designate specific percentages if you wish to allocate a portion of your assets to different individuals or charities.
- Life insurance policy updates
These policies should be reviewed and updated after a divorce, or even annually to ensure your wishes and accurate and timely.
Property ownership, account access and more
Along with updating estate planning documents and financial accounts, you should review any other accounts that may be in both of your names, including vehicle titles, credit card accounts, property titles and utility bills. You should also update emergency contacts for your employer and health care providers.
Divorce impacts a person’s whole life. Addressing financial and estate planning changes can help you feel more in control of your life and confident that you’ve protected your interests after divorce.