Gray divorce, or the dissolution of marriage among older couples, is becoming increasingly common. With changing societal norms, more individuals over 50 are choosing to end their marriages.
This decision often comes after children leave home, leaving couples reevaluating their relationships. While no longer needing to address child custody, these divorces present unique challenges, especially in estate planning. Here is how to manage the aftermath of a gray divorce.
Updating estate planning documents
Many individuals have their ex-spouse listed as the healthcare proxy or in other critical roles. This can lead to complications if not promptly addressed. Ensure your health care power of attorney names a new, trusted individual. This step is essential to prevent your ex-spouse from making decisions on your behalf.
Revisiting beneficiary designations
Life insurance policies and retirement accounts often name a spouse as the beneficiary. After a gray divorce, you should update these designations. If your former partner remains listed, they will inherit these assets despite any contrary instructions in your will. Consider who you now wish to benefit from these accounts and make the necessary changes.
Reassessing jointly held assets
During divorce proceedings, many assume that property divisions are final. Yet, if titles still list both names, issues can arise. Ensure that property titles reflect the agreed division to prevent unintended transfers. Joint accounts or assets should reflect your current wishes, not past arrangements. Consider consulting an experienced attorney to get personalized advice on this matter.
Crafting a new estate plan
If you lack an estate plan, this is the perfect time to create one. Draft a will to specify who will manage and inherit your estate. Designate a power of attorney to manage financial matters should you become incapacitated. Consider a living will to outline your medical preferences in case of severe illness. These documents provide clarity and peace of mind.
Gray divorce may bring newfound freedom, but it also requires careful planning. Updating estate documents and ensuring your assets align with your current life are essential steps. Embrace this new chapter with confidence, knowing your future is secure and well-planned.