The new tax laws set to come into effect on January 1, 2019, caused a lot of people, including Houston residents, to finalize their divorces before the new year set in. under the new law, the payor can no longer deduct alimony and the receiver is no longer obligated to pay tax on it. Anyone whose divorce has been finalized recently should consider this the right time to update their estate plan. This also applies to anyone who has not reviewed their estate plan after separating from a spouse.
One of the first steps one should take after finalizing a divorce is update one’s healthcare proxy. This document allows someone else to make important healthcare decisions for you and usually people appoint their spouses as their proxy. However, one rarely wants their ex-spouse making such crucial decisions, which is why updating it is essential. Similarly, updating one’s power of attorney to a trusted individual is important as well.
One’s will and trust documents should also be updated so that heirs and beneficiaries are up-to-date. Again, not many people want their ex-spouse to inherit their assets. Life insurance policies are also important documents to look over, as many people overlook the fact that they have named their spouses as their beneficiaries or have not gone through the proper procedure to appoint a new spouse. Similarly, beneficiary designations should also be looked at when it comes to retirement accounts and it should be ensured that they are consistent with the divorce agreement.
When one has just gone through a divorce, the last thing they might want to do is go through more paperwork. However, in order to ensure one controls the way their assets are distributed after their death, it’s important to review one’s estate plan regularly. An experienced attorney may be able to prove useful in these circumstances.