1. Update Your Will to Reflect Your New Reality 
Your will is a foundational part of your estate plan, and after a divorce, updating it should be a top priority. If you’ve left your former spouse as the primary beneficiary or executor of your estate, this needs to be revisited immediately to avoid complications when it comes time to administer your estate.
- Remove your ex-spouse as a beneficiary: Unless specified by a divorce settlement, your ex-spouse should no longer be listed as a beneficiary in your will. This is particularly crucial for significant assets such as real estate, financial accounts, and retirement funds. If your ex is still named as the beneficiary of these assets, they could inherit them despite your wishes.
- Designate new beneficiaries: After divorce, your beneficiaries might change entirely. You may now wish to leave assets to children, a new partner, or other family members or friends. It’s important to be specific about who should receive what, and to update the amounts and nature of the gifts.
- Reassign guardianship for children: If you have children under 18, your will should specify a guardian for them in the event of your passing. Divorce may change your thoughts on who is best suited to care for them, so ensure that guardianship provisions are updated to reflect your wishes and any changes in your relationship with potential guardians.
- Revisit the Executor of your Estate: The executor of your will is responsible for administering your estate after you pass away. If your ex-spouse is currently named as your executor, this position needs to be reassigned to a trusted family member, friend, or professional.
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2. Review Powers of Attorney and Health Care Directives
Powers of attorney (POAs) allow a designated individual to make legal and financial decisions on your behalf if you become incapacitated. Similarly, a health care proxy designates someone to make medical decisions for you if you’re unable to do so yourself.- Revoke your ex-spouse’s authority: If your ex-spouse is currently listed as your agent in your POA documents, this should be updated to reflect a new, trusted individual. In some cases, a divorce decree may dictate that POA designations be automatically revoked, but it’s always best to confirm this by taking action.
- Choose a new agent for your POA: This should be someone who knows your financial and personal preferences and is capable of making decisions on your behalf. It could be a family member, a close friend, or a professional fiduciary.
- Health care proxies: Just as with POAs, a health care proxy is something that should be updated post-divorce. You may no longer wish your ex to make health care decisions for you, and assigning a new proxy ensures that your medical wishes will be honored. Be sure to discuss this with the person you designate to ensure they are comfortable with the responsibility.
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3. Update Your Life Insurance Beneficiaries
Life insurance policies often have a lasting impact, as they can provide for your loved ones after you’re gone. However, if you’ve named your ex-spouse as your life insurance beneficiary, they will be entitled to the death benefit unless the beneficiary designation is changed. This can result in confusion and financial hardship for your intended beneficiaries.- Revisit your life insurance policy: Whether you have a policy through your employer or an individual plan, check the named beneficiaries. If your ex-spouse is listed, update the policy immediately.
- Assign a new primary and contingent beneficiary: After a divorce, your new beneficiaries could include children, family members, or a new partner. You can also name contingent beneficiaries in case your primary beneficiary passes away before you do.
- Consider a trust: In some cases, naming a trust as the beneficiary of your life insurance policy is a good idea. This can ensure that the death benefit is distributed according to your wishes and can help avoid probate. A trust can also provide more control over how the funds are used, especially if your beneficiaries are minors or young adults.
4. Revise 529 College Savings Plans and Custodial Accounts
529 college savings plans are a popular way to save for children’s education, and it’s common for parents to name each other as the account holder or primary beneficiary. If your ex-spouse is listed in any of these capacities, it’s important to update them accordingly.- Update account ownership: If you were the account holder for a 529 plan or custodial account and your ex-spouse had control over the account, you may want to change the account ownership to your name, or to a new trustee.
- Change the beneficiary: Ensure that the beneficiary listed on the account is still appropriate. If you and your ex have children, this may remain unchanged, but it’s worth revisiting to ensure the account reflects your current family circumstances.
- Review other custodial accounts: Similar to 529 plans, custodial accounts (such as UTMA/UGMA accounts) may also need to be updated after divorce. Reconfirm the ownership structure and the beneficiary designations for these accounts.
5. Revise Retirement Account Beneficiaries
Retirement accounts, including 401(k)s, IRAs, and pensions, are often overlooked when updating beneficiaries after a divorce. If your ex-spouse is still named as the primary beneficiary, they will inherit the funds unless updated.- Change beneficiaries for all retirement accounts: Be sure to update your beneficiary designations for both employer-sponsored and individual retirement accounts.
- Consult your divorce agreement: In some cases, your divorce decree may specify how retirement assets should be divided. Make sure your retirement accounts reflect any court-ordered changes to beneficiaries or distributions.
- Consider a trust: For added control over your retirement assets, particularly if you have minor children, consider naming a trust as the beneficiary. This can help avoid complications down the road.
