If you are going through a divorce, it can feel like your world has been upended. With all the unrest due to the pandemic and a general lack of career stability for many, divorce can feel like more than you can handle. However, if you calm your racing heart and think through the legal steps you need to take, you can plan for a smoother road ahead. 

The separation period of your divorce is the best time to make plans for the future so that any changes can go into effect immediately at the time of your divorce finalization. There are key issues you need to think about regarding planning for your future and that of any children.

Last Will & Testament

If you already have an estate plan or a will drawn up, now is the time to start thinking about how you will revise it. According to NC law, when the divorce is final, your last will and testament automatically revokes provisions that made your former spouse an executor, trustee, conservator, or guardian. 

This means that whether you have drawn up a will for yourself or not, many of these plans will be null and void as soon as your divorce is final. In the situations where you named your spouse as a conservator, trustee, executor, or guardian, NC will treat these situations as intestate; as if you don’t have a will. 

Questions To Think About

It is vitally important to make a new will during the separation period so that it will go into effect after the divorce is final. Carefully rethink these issues with your attorney.

• Name a new Trustee for any trusts you own
• Consider naming a new Executor for your will?
• Who should be the Beneficiaries of any trusts or other accounts?
• Who should manage your financial affairs should you pass away?
• Name a guardian of any children in case you and your spouse both pass away, Also think of naming an alternate to the position in case your spouse becomes ill or unfit to parent.

Retirement Accounts & Trusts

In NC, during the separation period, you cannot change the names or beneficiaries of many types of accounts. You may wish to keep your retirement for yourself and your children, but if you have already named your spouse as a beneficiary, this cannot change until after the divorce is final (or before you declare your separation). The types of decisions that must wait until the divorce is final include:

• Changing the beneficiaries of life insurance policies, pension plans, employee benefit plans, IRAs, or other types of retirement accounts
• Changing a Revocable Living Trust’s beneficiaries or the Trustee
• Eliminating the spouse’s right of survivorship for property should you die

Powers Of Attorney: Who Do You Trust?

In NC, a last will and testament automatically changes to exclude the ex-spouse. However, Healthcare Power of Attorney or Durable Power of Attorney documents are not automatically changed upon divorce. These documents are both essential legal documents that name someone to care for your physical health or your financial health if something should happen to you such as incapacitation or incompetence. You should change the names on these documents immediately. Do not wait for the divorce to happen.

HealthCare Power Of Attorney: Protect Yourself

Now is the time to write a Healthcare Power of Attorney or revise your existing document. Often, we put out spouse as the person who would make healthcare decisions for us if we ended up incapacitated or incompetent by an accident or a medical event. You most likely no longer want your spouse to play this type of role in your life. Think about who you trust with your life and your healthcare decisions and see your attorney to make plans for if the unthinkable should happen.

Durable Power Of Attorney: Protect Your Finances

Now is also the time to write a Durable Power of Attorney or revise your existing document. If you have named your spouse, they will be in charge of all financial decisions related to you and your estate should something happen to you. If you are divorcing someone, you don’t want them in charge of your finances should you lose your ability to make decisions for yourself. 

Most importantly, you definitely don’t want them accessing your financial assets right now while you are competent. The Durable Power of Attorney gives them the ability to get into your accounts right now. If you are in a difficult divorce situation with terrible conflict, get to your attorney and change your Durable Power of Attorney immediately. Choose instead someone that you trust who understands your financial situation and your desires should something happen to you.

Plan Early

Working with an estate planning attorney gives you an edge to stay ahead of what an upset spouse may do to cripple your future or take control of your finances. Good planning makes it possible to set yourself up for a divorce in which your losses are mitigated by your forethought to see a lawyer and work out these issues early on.

Consult Your Attorney

Because divorce is so complicated, it is best to consult with your Estate Planning Attorney to redraw or write a will, change your power of attorney documents, and plan for what you will change with regard to beneficiaries for retirement accounts, property, and trusts. Some legal duties can be accomplished immediately and will give you the peace of mind of knowing that your spouse is no longer able to access your financials or make medical decisions for you should something unexpected happen.