 Personal Finance PowerPoint Presentation Rewriting your will after divorce Prepare to get financially fit by practicing personal finance Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category, further broken out by course Each course then organized in a logical, reasonable fashion Making it much more easy to find what you need than can be done on a YouTube page We also include added resources such as Excel practice problems, PDF files and more Like QuickBooks backup files when applicable So once again click the link below for a free month membership to our website and all the content on it Most of this information comes from Investopedia Rewriting your will after divorce which you can find online Take a look at the references, resources, continue your research from there This by Alicia Tovila, updated May 18, 2022 In prior presentations we've been looking at estate planning Now focusing in on particular components, particular tools That could be useful in estate planning depending on your situation This time talking about rewriting your will after divorce So clearly if we think about the timeline that we've talked about in prior presentations of the estate planning process Clearly before death what we would like to do is being able to plan for the point of death Being able to allocate our assets in accordance with our wishes Trying to remove or eliminate or reduce taxes if possible And trying to make it as easy as possible on our loved ones at that point in time When thinking about that process the will is usually the first tool that comes to mind Clearly if there are life changes that happen in the future after having written a will such as a divorce that took place Then we're going to have to kind of rethink that process So rewriting your will after divorce comes into play Major changes in your life such as marriage, having a baby, moving out of state or divorce Should prompt a revisit to your current will So it is important to revise your will at these times in order to ensure your estate planning is up to date So clearly you've got these major differences If you have one individual and you write a will That could have a lot more different components to it than if you have two individuals You're a married couple because remember when you're a married couple Then it could be a little confusing as to what that entity is from a legal and tax standpoint You would think then the two individuals now are one from a legal standpoint And therefore their estate or their tax situation and so on would generally be one But that could be different from state to state if there's community property for example and so on And then of course if there's a divorce and you have situations of joint custody and that kind of thing That can also add to the levels of confusion requiring updates to things like a will So if you forgot to update your will after a divorce you risk having your assets disputed to your ex-spouse So if you're very upset with your ex-spouse that might not be what you want to have happen at that point So state laws and gifts Many states have laws that after a divorce automatically revoke gifts to a former spouse listed in a will For example a Florida statute states Quote any provision of a will executed by a married person that affects the spouse of that person Shall become void upon the divorce of that person or upon the dissolution or annulment of the marriage After the dissolution divorce or annulment the will shall be administered and construed As if the former spouse had died at the time of the dissolution divorce or annulment of the marriage Unless the will or dissolution or divorce judgment expressly provides otherwise in quote Some states go even further to include provisions that revoke gifts to family members of a former spouse If you live in a state that has such a law gifts to former stepchildren would also be revoked after your divorce So notice it gets a little bit confusing when you think about you might say well what's going on here with the gifts And the inheritance and the divorce and the will note that went from an estate planning standpoint Or from a tax, a death tax kind of situation That the general scenario is if the state or the federal government tries to impose an estate tax like a death tax Then you would expect the response of that would be that the individual would then try to give all their money away right before they die on their death bed And then of course we have this game this dance that takes place the government says well we don't want them to do that We want to take some of their money that's why we put the tax in place so they're going to say you can't just give all your money away at that point in time So we have to have some rules that are going to link together the gifts that you're giving away limiting them So you can't just give all your money away on your death bed and the estate tax and that of course leads to these more convoluted complications Tying together things like gifts and estates to some degree that's one component So for example according to a Texas estate code Quote all provisions in the will include all fiduciary appointments shall be read as if the former spouse and each relative of the former spouse Who is not a relative of the testator had failed to serve the testator And quote typically if you had an alternative beneficiaries listed in your will the gifts would default to them If you had no alternative beneficiary for a gift the person you listed in your will as a residual beneficiary would inherit the assets in question However it is not a great idea to rely on state law in these matters So clearly you could see if that the state will kind of default that's kind of the default But what you would like to do is take the action so that you're making sure that you're listing out what you want to be having happen at the point of death to the best that you can So additionally during the divorce process you are still technically married and you may wish to change your beneficiaries in advance of the final divorce decree So you might be saying if I even if I die within the divorce process I want to make sure that every penny goes some other place I don't know In any case beneficiaries in your will most married people most married people leave everything in their will to their surviving spouse You would think that would generally be the case because normally you would think of a married couple as basically one entity So you would think then that if one individual dies the other individual would have control over you know the assets generally until that person dies would be the general idea So if this is how your will currently reads be sure to remove your ex-spouse as a beneficiary and add a new beneficiary This could be a friend a family member or a child children if any be aware however that many assets are passed outside of a will These assets transfer are based on bank or insurance documents therefore it is also critical to change the beneficiaries designation on these documents So you might have some other kind of bank accounts and whatnot 401k plans or whatever where you've assigned the beneficiary when setting up those accounts And if those beneficiaries are going to your spouse for example and you no longer want them to do so you want to make sure that you handle that process as well The two major items to update outside your will are documents for you've got the life insurance You've got the retirement accounts such as an employer sponsored 401k or an individual retirement account that being the IRA Property transfers you will also need to update your will for any property gained or lost during the divorce If you have assets that are specifically identified in your will be sure to update them for any changes that may have occurred because of the divorce Executor of your will and executor oversees the distribution of your estate according to your wishes If you don't want your ex-spouse handling your personal affairs it is best to assign a new executor So clearly in your will if the executor would be your spouse and obviously if you don't want them to be handling the distribution then you want to name someone Again some states have laws that revoke the appointment of an ex-spouse as executor but it is best not to count on state law Guardian of your minor children If you have children with your ex-spouse you will want to update your will to appoint a guardian in the unlikely event that both you and your ex-spouse are not available to raise your children In the event of your untimely death your children will most likely be raised by your ex-spouse A parent can be deemed unfit if there is a serious and ongoing problem such as child abuse, incarceration, or addiction If you believe your ex-spouse is an unfit parent documenting it in your will is one place to start accumulating evidence So clearly if you're concerned about passing away and then your child having custody by someone that you don't want to have custody for it You might try to document that up although that's a tough situation to be in in order to put that make your argument How do you update your will? You can update your will by codicile or by writing an entirely new will A codicile is an amendment to a previous will because there will be many changes to your will resulting from your divorce The easiest option may be to write a new will so clearly a divorce isn't like a one line item change Possibly it could have a substantial change on the entire will so it might be best or easiest just to redo the whole thing If you write a new will you can revoke your old will by physically tearing up the original or listing in the new will that all prior wills are revoked So you might want to basically name that so you can basically say hey look this is the latest and greatest as of the date that I'm basically writing this will Hopefully all the wills that you have are going to be dated and so on so that you can see which is the latest and greatest You can remove or tear up the old will other people might have copies of the wills and so on so they might try to in a bad situation They could try to falsify the will maybe or something like that but you want to make sure the latest and the greatest has shown that it is indeed that So the newer date on the current will ensures that it supersedes the previous will You can find sample you can find sample wills online to follow a standard format Use a software package to make your will slightly more specific to your situation or consult with an estate planning attorney So clearly that's going to be dependent as we've talked about in prior presentations on how advanced your your will is Which will be dependent in part you would think on how much assets you have and the complexity of your possible marital situation And family situation dependence and that kind of stuff as to whether or not you want to do it kind of like yourself Or get some help from an attorney for example What's the best way to change your will after divorce? Tear up your old will literally and start over Chances are you left everything or almost everything to your spouse and your original will substantial change Start fresh with a new beneficiaries and alternates in case your first choices do not outlive you Can you change your will before your divorce is final? Even though you are legally married until a judge signs a divorce decree that does not mean you cannot change your will or estate plan at any time The rules vary and depending on the type of estate plan or will you have you can make some changes immediately by yourself For others you may need to serve notice to your soon to be ex and file paperwork with the court before changes can be made Finally there are a few actions you cannot take until the divorce is final Can your ex challenge your will? Yes an ex spouse or even ex de facto partner can challenge the will of a former partner or partner spouse or partner Whether the challenge will be successful depends on the court's interpretation of a variety of factors including what was in the divorce settlement or any other legal agreements between you What's the bottom line? Don't trust that the state law will back up your wishes in the event of your untimely death So you don't want to basically default to the state you'd like to basically take the preemptive action usually So if you don't want your assets transferred to your ex spouse and there's nothing in your divorce agreement that requires this be sure to put it in writing Make the will make the adjustment You can do this by revoking your old will and replacing it with an entirely new one or by writing a codicile to the original The important items to update in your will are your beneficiaries, executor, property and guardianship of minor children If you have concerns specific to your divorce and will it could be beneficial to seek the guidance of an estate planning attorney