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Modifying an estate plan after a divorce

Going through a divorce can be a traumatic experience both emotionally and financially for New Jersey residents. Former couples often seek to put the whole experience behind them once negotiations have been concluded and settlements signed, but failing to take care of estate planning matters before moving on could leave their assets and even their lives in jeopardy. Health care proxies often give spouses the authority to make life-or-death decisions, which is an issue that should be addressed without delay if the divorce was an acrimonious one.

Powers of attorneys should also be modified after a divorce. This is especially important if a durable power of attorney is involved as these arrangements could provide bitter ex-spouses access to assets even when the principals are not incapacitated. The beneficiaries listed on life insurance policies and retirement accounts cannot generally be changed while divorce negotiations are ongoing, but addressing this issue should be a priority once an agreement has been reached and a divorce becomes final.

Wills and trusts should also be revised or rewritten after a divorce as these documents often list spouses as either executors or trustees. However, vindictiveness should be avoided to prevent the new estate plan being challenged in court. Redrafting wills and trusts becomes even more important when assets are considerable or young children are involved and guardians must be appointed.

Attorneys with estate planning experience may encourage their clients to revisit and revise their documents regularly even when their situations seem stable. Changes made to federal tax laws could cast new light on decisions made years ago, and it may be prudent to modify, or revoke and rewrite, trusts in certain situations. Provisions limiting how assets can be distributed could be prudent when beneficiaries have developed mental health or substance abuse problems.

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