Welcome to the twentieth episode of Divorce and Your Money Podcast. Your host, Shawn Leamon, MBA and a Certified Divorce Financial Analyst, talks about the key documents and accounts you need to update if you are involved in divorce.
When you are getting a divorce or immediately after it is finalized, some documents and accounts need to be updated. Doing this can potentially prevent many future problems.
One set of documents involves estate planning. They contain details about what should be done in the event of your death or incapacitation. First to consider is the last will or the trust, which lists the beneficiaries who will receive your assets or property if or when you pass away. If your ex-spouse is included, this may need to be changed.
Another set of documents is called a medical power of attorney or a medical proxy. This document lists the person who will be in charge of making medical decisions in case you can’t. A similar document is the financial power of attorney, which also needs to be updated if you don’t want your ex-spouse making financial decisions in the event of your incapacitation. These documents are fairly easy to set up, but if you do not have them, a judge will be forced to make these decisions for you.
Next up is identified as a check box on most of the financial accounts you may have—the beneficiary designation. The person who will get your account or assets should you pass away is listed here. Whether you are getting divorced or have finalized it, you should update this information.
Other miscellaneous accounts also need to be updated after divorce. You can check the accounts you have in common with your spouse by checking your credit report. These include bank accounts, credit cards, vehicle registration and titles, insurance policies, and retirement and investment accounts. Depending on the settlement, you should either remove your own or your ex-spouse’s name from these documents and accounts. You also need to update documents with emergency contact information.
Key Learning Points:
- Key documents and accounts need to be updated if you are in the process of divorce.
- Estate planning documents, such as the last will or trust, need to be updated first.
- You need to update any medical power of attorney or a medical proxy.
- You need to update any financial power of attorney.
- You need to update the beneficiary designation in your accounts.
- Update any accounts you shared with your ex-spouse.
- You need to update names on bank accounts, credit cards, vehicle registration and titles, insurance policies, and retirement and investment accounts.