LEGAL
By Jennifer E. Peck
Uncoupling. While this has become a common phrase for celebrities when referring to their divorces, it succinctly explains the process.
When you are married for a long time, most things are combined or coupled together — your bank accounts, your home, your investments and your retirement plans, to name a few. For those newly divorced (or uncoupled), once the legal process of the divorce is complete, it is essential to update your estate plan.
Define & Divide
If you have recently uncoupled, here are the four most important estate planning steps to take:
- Update your beneficiaries. If you are the former spouse retaining the home, make sure it is transferred to you. The last thing you want to do a year or more down the road is to deal with titling issues. Although the divorce decree may have awarded the home to you, make it official in the county records. The same goes for your assets. If, under your divorce decree, you do not have to retain your ex-spouse as a beneficiary of your assets, remove them. For most accounts, this makes it easier to pass on assets when you die without your ex-spouse arguing that they are the beneficiary. For 401ks, if you don’t update the beneficiary, then even if the divorce decree awards you the 401k, they could still end up with it upon your death without your ex-spouse arguing that they are the intended beneficiary.
- Update your health care power of attorney. Married couples don’t just share assets; they share most things, including helping each other. This usually spills over into helping to make medical decisions. Although under Ohio law, your ex-spouse is automatically removed as your health care agent, you must name another. If you do not have a health care power of attorney in place and become incapacitated, then someone must obtain a legal guardianship through the court to make medical decisions for you. To avoid this, update these health care directives.
- Update your financial power of attorney. Just like the health care power of attorney, your ex-spouse’s authority under your financial power of attorney is revoked when you divorce. And just like the health care power of attorney, you want to make sure the person you want is in charge of your finances when you need it.
- Update your will. If you are married and don’t have a will, your spouse will inherit some or all of your estate under Ohio law. If you are no longer married, then Ohio law decides where your assets go when you die, unless you have a valid will (and/or beneficiary designations).
Uncoupling isn’t easy. However, once you have taken that step and find yourself newly single, ensure your estate is in order. Control who helps you when you need it and who inherits your hard-earned savings.
