As you go through a divorce, it's essential to be planning for your financial future. Many people benefit from consulting with a financial advisor. While it's understandable that you probably don't want to take on any more expenses during this time, solid advice that saves you from making serious financial mistakes can end up paying for itself many times over.
In addition to developing a budget for your new life as a single person or single parent, continuing to save for retirement and putting some money away in an emergency fund, it's essential to revise your estate planning documents as soon as possible. If you don't have an estate plan, or at least a will, now is the time to get one.
If you already have a will, advanced directives, power of attorney, trust and/or other documents, you'll want to have your ex-spouse's name removed from one or more places. You likely no longer wish for your ex to inherit your assets when you die. You'll likely no longer want your ex to be your financial power of attorney or health care proxy.
It's a good idea to meet with an estate planning attorney once you know that you are divorcing. Some family law attorneys who handle divorces also handle estate planning. It's essential that your attorney knows the California laws pertaining to changing these documents.
If you are changing the beneficiaries in your will, don't forget to change your beneficiary designations on all of your accounts as well as your insurance policies. Many people assume that if they have changed the beneficiary designations in the will or if their ex has waived rights as a beneficiary in the divorce decree, that is enough. However, the proceeds are paid out based on the beneficiary designation on the account or policy.
In the midst of a divorce, you're likely to be more concerned about the assets you have while you're alive than what happens to them after you die. However, divorce, like many other major life changes, requires amending your estate planning documents to ensure that they reflect your wishes.
Source: Huffington Post, "7 Steps To A Better Financial Future After Divorce," Brittany Wong, June 16, 2015