Did you hurry to finalize your divorce in 2018 so that the old tax laws would apply to you? If so, you are not alone. Given the negative impact that the new tax laws have on both the recipient and the payor of spousal support, many couples took the steps necessary to avoid the changes mandated by the Tax Cuts and Jobs Act that took effect as of the first of this year.
Now that you have had some time to recover from the whirlwind of finalizing your divorce by a deadline, you should also think about reviewing your estate plan to make sure that it is accurate and reflects your current status. In particular, you should pay careful attention to the following issues.
- Guardianship of minor children
If you have a good reason for not wanting your ex-spouse to serve as guardian of your minor children, you should change your will to reflect that. However, since your ex-spouse may challenge your request, it may also be a good idea to earmark some money in a will or a trust to fund the litigation that will likely follow.
- Power of attorney
Now that you are divorced, you should revoke your old power of attorney and create a new one that names a relative or trusted friend as your financial agent instead of your ex-spouse.
- Living will/health care proxy
Just as a power of attorney gives your representative the right to make financial decisions in your stead, a living will names a health care proxy to make decisions about the medical treatment you receive in case of incapacitation. You likely do not want your ex-spouse making these decisions, so you should name a different individual in whom you have confidence.
- Last will and testament
Even if, for whatever reason, you still want your ex-spouse to inherit something in the event that you die, it will likely be less than what he or she would have inherited if you were still married. Therefore, you should update your will after the divorce to reflect the current circumstances. You may also want to rethink naming your ex-spouse as executor of your will if you had done so previously.