Based on research provided by Legal Templates, there has been a 34% increase in divorce filings since the COVID-19 pandemic began. People navigating the divorce process understandably are faced with many issues ranging from how children will be impacted by the end of the marriage to where both spouses will live after the divorce is finalized. As a result, issues involving estate planning often take a back seat. If your divorce involves the division of assets, however, it is critical to take some important steps to plan for your future.
Update Your Automobile and Homeowners Insurance
One of the most tedious yet critical parts of managing assets after a divorce is to make sure that your various insurance policies are properly updated. This includes updating both your homeowners and motor vehicle policy information. This way you avoid incurring additional liability in relation to any accidents involving your former spouse.
Revise Your Health Insurance Policy
If you previously had health insurance with your spouse, you will now likely need to obtain your own policy. You might decide to temporarily utilize the Consolidated Omnibus Budget Reconciliation Act (COBRA) to stay on your former spouse’s insurance policy. In most cases, however, it pays to be proactive about insurance coverage and make a decision about how you will be insured. While you are revising your health insurance policy, make sure that your healthcare providers have copies of your living will and healthcare power of attorney.
Refinance Your Mortgage
If one party plans on remaining in the marital home, the mortgage must be refinanced so that the other party can be removed. It is critical to give yourself ample time to perform this action. While it might be tempting to transfer ownership of the property through a quitclaim deed, remember that the other party will still be liable if a payment is missed. If you retain ownership of the marital home, consider how ownership of your house will be treated if you become incapacitated or pass away.
Update Your Estate Planning Document
Revising your estate planning process is critical after a divorce is finalized. This includes amending your estate planning documents so assets no longer transfer to your former spouse. Remember, you are not required to update estate planning documents in this way and some people decide to let their spouse continue receiving assets. Also, remember that retirement accounts like 401(k)s pass outside of estate planning documents. As a result, it is critical to make sure that these documents are properly updated, as well.
Review the Terms of Your Prenuptial or Postnuptial Agreement
If you have either a prenuptial or postnuptial agreement, it is critical to review the terms of your agreement in consideration of your divorce. Your new estate plan should reflect the terms of your prenuptial or postnuptial agreement.
Contact a Knowledgeable Estate Planning Attorney
If you need help making sure that your estate plan is properly situated after a divorce, you should not hesitate to speak with a knowledgeable attorney. Contact attorney Jim A Lyon today to schedule a free case evaluation.