Creating a Post-Divorce Estate Plan in Wisconsin
Creating a post-divorce estate plan may not be the first thing on your mind as you rebuild your life, but it’s an essential step in protecting your future and ensuring your wishes are honored. Divorce changes your family structure, finances, and long-term goals, making it crucial to reevaluate the estate plans you created during your marriage.
Below, we’ll cover the key components of post-divorce estate planning, including steps tailored to Wisconsin state laws and insights from local Milwaukee divorce attorneys.
Jump to article sections:
- Why Estate Planning Is Crucial After Divorce
- Revising Your Will: What to Consider
- Updating Beneficiary Designations on Financial Accounts
- Power of Attorney and Healthcare Directives: Making Changes
- Protecting Your Children’s Inheritance
- Tax Implications of Post-Divorce Estate Planning
- Common Mistakes to Avoid in Post-Divorce Estate Planning
- Take Control of Your Future Today
1. Why Estate Planning Is Crucial After Divorce
Estate planning after divorce is more than crossing out an ex-spouse’s name; it’s about reflecting your new circumstances and protecting your interests. Without updates, your ex-spouse could remain a default beneficiary or decision-maker in the event of your death or incapacity.
Some key reasons to update your estate plan include changes in assets, guardianship arrangements for children, and the opportunity to appoint someone new to critical roles like executor or healthcare agent. An updated estate plan ensures your wishes align with your new reality, helping you regain control and peace of mind.
Especially for individuals navigating a high net worth divorce, estate planning during divorce is crucial.
2. Revising Your Will: What to Consider
Divorce often requires a complete overhaul of your will. Start by removing your ex-spouse from any inheritance or executor roles. If the will was created during your marriage, it likely names them as the primary beneficiary and as the individual responsible for managing your estate’s distribution.
Consider naming a close family member, trusted friend, or financial advisor as your executor. Likewise, update the provisions for minor children, appointing new guardians if you and your ex-spouse no longer agree on arrangements. Taking these steps ensures that your legacy reflects your current priorities.
3. Updating Beneficiary Designations on Financial Accounts
Even after finalizing a divorce, your ex-spouse may remain the designated beneficiary on accounts like life insurance policies, retirement plans, and bank investments. This is surprisingly common but can lead to unintended consequences if left unchanged.
Work with your financial institutions to update beneficiary designations to align with your current wishes. You may choose children, siblings, or other loved ones as your new beneficiaries. Keep in mind that Wisconsin laws often require spousal consent before changing certain accounts, so finalizing these updates post-divorce helps avoid complications.
4. Power of Attorney and Healthcare Directives: Making Changes
Another essential post-divorce step involves updating your power of attorney and healthcare directives. These legal documents authorize someone to make decisions on your behalf if you’re unable to do so. If your ex-spouse is still listed, they could legally step into this role, even after divorce.
Revoke any documents that grant your ex-spouse these powers and create new ones naming a trusted individual, such as a family member or close friend. By making these changes, you’re ensuring your medical and financial decisions are handled by someone with your best interests at heart.
5. Protecting Your Children’s Inheritance
If you have children, protecting their inheritance should be a priority in your post-divorce estate plan. Without proper planning, your ex-spouse might have control over the funds you leave behind for your kids.
Creating a trust can help address these concerns. For example, a revocable living trust allows you to designate terms for how and when your children receive their inheritance. You can also appoint a trustee to manage the funds responsibly until your children come of age or meet specific milestones. This ensures that your assets are used for their benefit, free from undue influence.
6. Tax Implications of Post-Divorce Estate Planning
Divorce inevitably affects your financial situation, and estate planning is no exception. Wisconsin follows equitable distribution laws, meaning assets are divided fairly rather than equally. After divorce, you may find yourself managing a reduced estate, which can impact your tax liabilities.
Estate taxes, gift taxes, and income taxes are all areas to consider when updating your plan. Ensure that your strategies maximize tax efficiency. Consulting with a divorce attorney familiar with local tax laws can help you minimize financial risks.
7. Common Mistakes to Avoid in Post-Divorce Estate Planning
While updating your estate plan, beware of common mistakes that could complicate matters later. Here are a few pitfalls to watch out for:
- Neglecting to update all documents: It’s easy to overlook smaller items like financial accounts or digital assets, but these are just as important as your will.
- Failing to notify relevant parties: After making updates, communicate with your beneficiaries, trustees, and executors so everyone is aligned with your decisions.
- DIY estate planning without legal advice: While online tools can be helpful, they often miss nuanced details specific to local laws.
By avoiding these missteps and working with a skilled attorney, you can create an estate plan that reflects your priorities and protects your loved ones.
8. Take Control of Your Future Today
Post-divorce estate planning may seem like a daunting process, but it’s a vital step toward rebuilding your life. By revising documents, protecting your children’s inheritance, and seeking guidance from a qualified Milwaukee divorce attorney, you pave the way for a secure and confident future.
At Ohiku Law in Milwaukee, we understand the emotional and financial toll that a divorce can bring. That’s why we’re committed to helping our clients navigate through the estate planning process with ease and clarity. With our team of experienced attorneys by your side, you can take control of your future and secure the well-being of those who matter most to you. Call us today for your free consultation!
By Attorney Odalo Ohiku, Owner of Ohiku Law Office
Attorney Odalo Ohiku is a dedicated and experienced lawyer who focuses on divorce law, family law, and custody and placement for high-net-worth individuals in the Greater Milwaukee area. A trained mediator and arbitrator, Attorney Ohiku has the skill set, experience, and perspective to help clients safeguard their interests while minimizing the stress, anxiety, and conflict that can come with divorce. Attorney Ohiku’s credentials are exemplary: he has been honored as a “Top 40 under 40” by both The American Society of Legal Advocates and The National Trial Lawyers, served as Chair of the Wisconsin State Bar Board of Governors, and earned the President Award from the Wisconsin State Bar. He is passionate about his work in safeguarding families, ensuring that they can maintain the lives they have worked hard to build.
