Grey divorce, the term for divorce later in life, is on the rise. When older couples split, unique financial and legal issues arise, especially regarding estate planning. Adjusting an estate plan after a grey divorce ensures one’s assets and wishes align with the new circumstances.
Updating beneficiaries and wills
After a grey divorce, updating beneficiaries is one of the first estate planning steps. Many people name former spouses on life insurance policies, retirement accounts, and transfer-on-death accounts. Replace these designations to reflect the new reality. Also, update the will to remove the ex-spouse and adjust inheritances to prevent unwanted complications in the future.
Addressing power of attorney and healthcare directives
Many couples give each other power of attorney or name each other as healthcare proxies. After a grey divorce, revise these documents to ensure the right individuals have the authority to make financial and medical decisions. Failing to update these documents could allow an ex-spouse to retain control during an emergency.
Reviewing trusts and property ownership
Adjust trusts and jointly owned property after a grey divorce. Some spouses use trusts to manage assets or minimize taxes. Divorce proceedings may require dissolving or altering these trusts. Re-evaluate joint property ownership as well. Separating jointly owned real estate or other significant assets often requires a complete overhaul of an estate plan.
Protecting children and other heirs
Grey divorces can impact adult children or other intended heirs. Adjusting an estate plan ensures that family members still receive what was intended. Properly dividing assets, setting up trusts, and clearly outlining who receives what helps prevent conflicts among heirs.
Grey divorce brings major changes, and estate planning must keep pace. Taking action protects financial well-being and ensures one’s wishes are respected.