Estate Planning After a Divorce

Unhappy woman holding wedding ring close up - estate planning after divorce concept
Few life events bring as many changes, as quickly, as divorce does. Because there are so many details to manage, one that can stay under the radar is the need to review—or create—your estate plan. Estate planning is something many people put off at the best of times, and it is especially easy to do when you are embarking on life after divorce. Estate planning after divorce may be more important than ever, though. As a newly single person, and perhaps a single parent, planning for the future falls squarely on your shoulders. That can feel both intimidating and empowering. But no matter how you feel about the prospect of estate planning after divorce, you don’t have to do it alone.

How (and When) to Change Your Estate Plan When Divorcing

If you are reading this after your divorce is final, congratulations; you are now completely free to update your estate plan, including any incapacity planning, as you see fit. If you are in the midst of a divorce, however, or about to begin one, there are some things you should be aware of regarding estate planning and divorce. The good news is that Oregon law has some built-in protections for divorced and divorcing spouses. But the best way to ensure that your wishes are honored is to update your estate plan yourself, with the help of an attorney who understands estate planning and divorce. There are measures you can take every step of the way: before, during, and after divorce.

Estate Planning Before Divorce

While married, it may be natural to appoint your spouse to make important decisions for you if you become incapacitated—like handling your finances or making medical decisions. If you are thinking about filing for divorce, however, you may not want your soon-to-be ex-spouse in that role. Accordingly, you should consider revoking any durable financial powers of attorney and advance healthcare directives that name your spouse as an agent. You can do this by creating new documents that give decision-making authority to someone else you trust. Don’t forget to give copies of any new powers of attorney and advance directives to the people you have appointed. If you have a will or revocable living trust, you should review them to see what changes you will want to make. If you don’t have an estate plan that includes a will, a trust, or both, speak to an attorney about creating a plan. Be sure to tell your attorney that you are planning to divorce so that he or she can advise you about how the divorce will affect your estate plan. One thing people often overlook when estate planning is beneficiary designations on life insurance policies and retirement accounts. Ask your lawyer about whether you can remove your spouse as a beneficiary before filing for divorce. Depending on the type of account or policy, you may need your spouse’s consent to remove them as a beneficiary.

Estate Planning During Divorce

If you didn’t have the opportunity to review or change your estate plan before your divorce case was filed, there are still some things you can (and should) do while your divorce is pending. These include executing new powers of attorney and advance healthcare directives. If you do not have these documents, or don’t have them updated to remove your spouse, your spouse could have control of your finances and medical decisions should you become seriously ill or injured.] However, there are some restrictions on what you can do with your assets in Oregon while a divorce is pending, and that may limit some changes to your estate plan. Oregon imposes Automatic Temporary Restraining Orders (ATROs) for the protection of both spouses. So, for instance, you may be able to create a new living trust after your divorce has been filed, but you cannot transfer assets into it, or transfer assets out of a joint trust with your spouse. You can create a new will that removes your spouse as executor. However, even if you attempt to remove your spouse as a beneficiary of your will, they may be able to inherit a portion of your estate under Oregon’s marital property laws if you die while the divorce is pending. If you want to get a head start on creating or updating an estate plan while your divorce is ongoing, your attorney may be able to design a plan and draft the necessary documents. That way, they will be ready to take effect after your divorce is final.

Estate Planning After Divorce

As noted above, there are no restrictions on how you can change your estate plan post-divorce. Oregon law does some of the work of disinheriting your ex-spouse for you, but not necessarily all of it; you should definitely consult with an estate planning and divorce attorney to make sure your wishes are honored. For example, Oregon law automatically revokes any provisions in your will or revocable trust that leave assets to your ex-spouse. If you do not want those provisions revoked, you must expressly reaffirm them after the divorce. Likewise, after your divorce is final your ex-spouse is automatically removed as executor of your will or trustee of your trust unless you reaffirm your wish for them to act in that capacity. However, divorce does not automatically revoke:
  • Previous appointment of a now ex-spouse under a power of attorney
  • Previous appointment of a now ex-spouse as a healthcare agent under an advance healthcare directive or medical power of attorney
  • Certain rights of a now ex-spouse under a previously created irrevocable trust
In other words, if you don’t make time to update your estate plan after your divorce, your ex-spouse could retain important powers that you don’t want them to have.

Work with an Experienced Oregon Estate Planning and Divorce Attorney

Your divorce isn’t just the end of your marriage; it’s the beginning of your future. Make sure you protect it by updating your estate plan. Work with a family law attorney who understands divorce and how it affects your estate planning. Based in Salem, Litowich Law helps with property division in divorce, so that you and your family can feel secure about your financial future. We work with clients throughout Oregon, and welcome you to contact us for a consultation.
Categories: Divorce, Estate Planning