Will and Trusts: When everything was going well in your marriage, your spouse was probably the beneficiary of your Will or Trust. Now that you are getting divorced, it is critical that you update your Will and Trusts. This is because in the state of Virginia and in many other states, if you do not update your existing Will or Trusts, your ex-spouse can inherit your assets. Even worse, if he/she has remarried or remarries in the future, your assets could end up with the new spouse and his/her children--completely disinheriting your own children or family.
 
If you have minor children, you need to name a guardian for them in your Will. (Even if you have a Revocable Living Trust or a Living Trust Plus (TM), a simple Will is required to name a guardian and to direct any forgotten assets into your trust.) Upon the death of one parent, usually the surviving parent will become the sole guardian. But if your ex-spouse has also died, had his/her parental rights terminated, or becomes an unfit parent, the court would have to appoint a guardian. Your Will should specify a guardian for your children who you can trust.

 

Advance Medical Directives (Health Care Power of Attorneys): Advance Medical Directives are medical documents that let you name someone to make health care decisions for you if you are unable to do so yourself. Most married couples name each other, but upon divorce, you probably do not want your ex-spouse making life and death decisions for you.

If you divorce before your health care directives take effect, it's often wise to eliminate confusion by starting over. Even if you named an alternate agent, it is recommended that you make a new document and name someone else as your agent, such as a parent, sibling, close friend or an adult child.

Financial Powers of Attorney: Most married couples give each other Financial Power of Attorney, so that one can manage the other's financial affairs without interruption. These powers are often quite broad, giving this person the ability to buy and sell real estate, open and close financial accounts, change beneficiary designations, collect government benefits, etc.

In a handful of states, if your spouse is your agent and you divorce, your ex-spouse's authority is automatically terminated. In Virginia, however, if you have given your spouse a Power of Attorney, you should generally cancel it as soon as possible upon separation divorce. Until you do so, your spouse has control over your property and can sell it or even give it away. 

Beneficiary Designations: You probably named your spouse as beneficiary when you were married, so you will need to change that. Usually all you need to do is request the appropriate form and list a new beneficiary. However, naming the right beneficiary is critical.

If you have children, naming a trust as the beneficiary and selecting your own trustee (which may be your parent or sibling) is often a wise idea.  A trustee can be held liable if he/she misuses the trust assets. You can keep your ex-spouse from having access, and you can control when your children will inherit. Money that stays in the trust is protected from irresponsible spending, creditors, and even spouses.

 

No Planning at All: What if something happens to you while you are in the process of divorce? If you have no existing formal estate planning documents and you are divorcing your spouse, keep in mind that a surviving spouse is entitled to your intestate (without a Will) share.  This could be 100 percent of the estate! In addition, he or she could be entitled to assets that are jointly owned and/or those where he or she is listed as a beneficiary unless a final decree of divorce has been entered (the filing of a divorce action is not enough.). But again be aware that a divorce does not automatically terminate certain federal benefits such as 401(k) beneficiary designations.