Divorce among older adults, often called “gray divorce,” is becoming more common. The reasons for this rise vary, from children leaving the home to individuals living longer and seeking more fulfilling lives.
While you may not have to deal with child custody or support issues, divorcing later in life comes with its own set of challenges. One of the most significant aspects to consider is your estate planning. Here are five important tips to guide you through the process.
1. Update your estate planning documents
Divorce can make certain estate planning documents obsolete. If you have named your spouse as your healthcare proxy, they may no longer be able to act on your behalf after the divorce. Be sure to review and update your health care power of attorney and other essential documents, such as your will or living will.
2. Revise transfer-on-death accounts and policies
Many assets pass outside of a will, including transfer-on-death (TOD) accounts and life insurance policies. If you still list your ex-spouse as the beneficiary, they will inherit these assets. It is crucial to review and update the beneficiary designations for your bank accounts, retirement funds, and insurance policies to ensure that your assets go to the intended person.
3. Double-check jointly held real estate
Even if your divorce settlement has already addressed property division, make sure you do not hold joint property titles with your ex-spouse as joint tenants with the right of survivorship. If you pass away first, your ex could inherit your share of the property, which may not be what you intended. Update the real estate titles to reflect the new ownership structure.
4. Create or Revise Your Estate Plan
If you have not already, now is the perfect time to create an estate plan. A will is essential to outline who will manage your estate, who will inherit your property, and who will be responsible for your minor children if applicable. Additionally, setting up a durable power of attorney and a living will can ensure that someone you trust manages your financial and healthcare decisions should you become incapacitated.
5. Review your health insurance and benefits
If you were on your spouse’s health insurance policy, you will need to find your own coverage. Be sure to explore your options and avoid any lapses in coverage. Additionally, check your Social Security and retirement benefits to make sure your ex-spouse is not a beneficiary. Consulting with an estate planning lawyer is always a good idea to ensure you update your documents.
Divorcing later in life requires careful planning, especially when it comes to your estate. Take the time to update all necessary documents, revise beneficiary designations, and ensure that your financial and healthcare plans are in order.