Why Updating Your Estate Plan After a Divorce in New Jersey is Crucial
Posted October 3, 2024
Divorce is a life-altering event that brings significant emotional, financial, and legal changes. Among these changes is the need to revisit your estate plan. If you live in New Jersey and have recently finalized a divorce, updating your estate plan should be one of your top priorities. Ignoring this critical step can have unintended consequences for you and your loved ones.
Here’s why it’s essential to update your estate plan in New Jersey after a divorce:
New Jersey Laws Automatically Void Certain Provisions, But Updating Your Estate Plan Is Critical
New Jersey law automatically revokes any provisions in your will or estate plan that benefit your former spouse. For example, if you named your ex-spouse as a beneficiary in your will, they would no longer inherit under your will once the divorce is finalized. However, not all aspects of your estate plan are covered by this automatic revocation.
- Beneficiary Designations: Assets like life insurance policies, retirement accounts, and payable-on-death (POD) accounts do not automatically update after a divorce. If you don’t update these beneficiary designations, your ex-spouse could still inherit these assets, despite your divorce.
- Power of Attorney and Healthcare Proxy: If your ex-spouse is listed as your power of attorney or healthcare proxy, it is important to name new individuals to serve in these capacities through updated documents.
Updating your estate plan ensures that your wishes align with your new life circumstances.
Protecting Your Children’s Future
If you have children, revisiting your estate plan is especially crucial to protect their interests. After a divorce, you may want to reconsider who should manage their inheritance.
Additionally, if you leave assets to your children without proper planning, your ex-spouse could indirectly gain control over those assets, particularly if they are named as the guardian of the children. By setting up a trust or choosing an alternative guardian for financial matters, you can ensure your children’s inheritance is managed according to your wishes.
Reflecting Your New Financial Reality
Divorce often results in a significant shift in your financial situation. Whether it’s due to the division of assets, spousal support, or child support, your financial landscape after a divorce will likely be very different from what it was during your marriage.
- Asset Reallocation: You may no longer own certain assets or may have acquired new ones after the divorce. Updating your estate plan ensures your assets are properly distributed according to your new situation.
- Tax Implications: The tax implications of a divorce can also affect your estate plan. For example, estate tax exemptions and deductions may change after your divorce, which could impact how much of your estate is passed on to your beneficiaries.
Choosing New Executors and Trustees
Your estate plan likely includes an executor, trustee, or other fiduciaries who are responsible for managing your estate after you pass away. If your ex-spouse is listed in any of these roles, it’s important to update those selections to name someone new to serve.
You can choose new fiduciaries, whether they are family members, close friends, or professionals, to ensure your estate is managed in line with your post-divorce wishes.
Ensuring New Relationships are Reflected
In the years following your divorce, you may enter into new relationships, remarry, or expand your family. Updating your estate plan allows you to include new partners, stepchildren, or other important individuals in your life. Failing to update your estate plan could mean that these new relationships are not recognized legally, leaving your loved ones unprotected.
Avoiding Legal Confusion and Disputes
A well-updated estate plan helps prevent legal disputes between family members after your death. If your estate plan remains unchanged after a divorce, it could lead to confusion or challenges in court, as your ex-spouse may still be named in your documents.
For example, if you pass away without updating your will, your family may have to go through the legal process of proving that your ex-spouse is no longer entitled to certain assets, even if state law invalidates their inheritance. This process can be costly, time-consuming, and emotionally draining for your loved ones even if they are ultimately successful in litigation.
Taking Control of Your Legacy
Your estate plan is a reflection of your life’s work, values, and priorities. After a divorce, you likely have new goals, new relationships, and new priorities. Updating your estate plan allows you to take control of your legacy and ensure that your assets are distributed in a way that reflects your current wishes.
Conclusion
In New Jersey, updating your estate plan after a divorce is not just a legal formality—it’s a critical step to protect your assets, safeguard your loved ones, and ensure your wishes are carried out. Whether it’s changing beneficiary designations or selecting new fiduciaries, your estate plan should be a living document that evolves with your life’s changes.
If you’ve recently gone through a divorce, don’t wait. We have experienced estate planning attorneys to update your estate plan and avoid unintended consequences for you and your family.
About the Authors
Brian Budic is Co-Chair of the firm’s Divorce and Family Law Practice Group He has extensive experience representing clients in all aspects of family law in New Jersey, including complex issues of divorce, equitable distribution, child custody, parenting time, child support, alimony, domestic violence, and prenuptial agreements. Brian knows the stress and emotional toll that his family law clients experience before, during, and after the divorce process. As a result, he treats every client with the empathy, responsiveness, and respect that they deserve.
Michael Ierino is an attorney at the firm’s Cherry Hill office, where he focuses on estate planning, construction law, litigation, municipal law, and land use. In his estate planning practice, Michael helps clients protect their assets and provide for their families through tailored wills, powers of attorney, and advanced healthcare directives. He also brings extensive experience in estate litigation, ensuring fairness in contested wills and estate administration matters. With a strong background in both transactional and litigation work, Michael offers a comprehensive approach to his clients’ legal needs. He is admitted to practice in Pennsylvania and New Jersey.
Latest News | The Role of School Boards in New Jersey: Legal Responsibilities and Best Practices
Our Office Locations
Our offices are strategically located throughout New Jersey, Pennsylvania and New York.
Cherry Hill
1010 Kings Highway South, Building 1, 2nd Floor
Cherry Hill, NJ 08034
- Office 856.853.5530
- Fax 856.354.8318
Cherry Hill
New Providence
430 Mountain Avenue, Suite 103
New Providence, NJ 07974
- Office 201.843.5858
- Fax 201.843.5877
New Providence
Easton
91 Larry Holmes Drive, Suite 200
Easton, PA 18042
- Office 610.691.7900
- Fax 610.691.0841