Divorce is a major life transition, and **estate planning during divorce** is often overlooked. However, without proper planning, your assets may not go where you intended, and your loved ones could face unnecessary legal complications. The recent passing of beloved actress Shannen Doherty highlights why updating your estate plan during divorce is critical.
Known for her roles in Beverly Hills, 90210, Heathers, and Charmed, Doherty’s courageous battle with cancer was well-documented. But just one day before her passing in July 2024, she finalized her divorce—a decision that secured her estate from legal disputes. Her story offers powerful lessons on the importance of **estate planning during divorce** and how to protect your legacy.
Timing Matters: Why Finalizing a Divorce is Critical
Doherty’s decision to finalize her divorce just before her death ensured her assets, including a $6 million Malibu home and acting residuals, were distributed according to her wishes. Had the divorce not been finalized, her estranged husband could have legally claimed a significant portion of her estate under community property laws.
In some states, if a person dies while going through a divorce, the legal process halts, potentially leaving the ex-spouse with unintended financial benefits. **This case underscores the importance of finalizing a divorce before a major health event or incapacity.** If you are going through a divorce, updating your estate plan should be a top priority.
Common Estate Planning Mistakes to Avoid During Divorce
Many people assume their assets will automatically transfer to the right people after divorce, but that’s not always the case. Here are common mistakes that can lead to unintended consequences:
1. Failing to Update Beneficiary Designations
Many financial accounts, including life insurance policies, retirement accounts, and investment portfolios, pass directly to named beneficiaries. If you forget to remove your ex-spouse, they could still inherit these assets. Some state laws automatically revoke ex-spouse designations upon divorce, but others do not.
2. Overlooking Digital Assets
From cryptocurrency to social media accounts, digital assets are a crucial part of modern estate planning. Make sure to update account ownership, access permissions, and passwords to prevent disputes.
3. Neglecting Incapacity Planning
If you previously named your spouse as your healthcare proxy or power of attorney, they could retain control over medical and financial decisions if you become incapacitated. Be sure to update these designations during divorce.
4. Making Emotionally Driven Decisions
Divorce is stressful, and many people make estate planning changes based on anger rather than long-term strategy. Consult an estate planning attorney to ensure your decisions protect your legacy and your children’s financial future.
3 Steps to Protect Your Assets During Divorce
Step 1: Create an Asset Inventory
Document all your assets, including property, bank accounts, investments, and digital holdings. Identify which are joint assets and which belong solely to you.
Step 2: Update Beneficiary Designations
Review all financial accounts and insurance policies. Ensure they reflect your current wishes and comply with state laws regarding beneficiary designations after divorce.
Step 3: Create a Life & Legacy Plan
A comprehensive **Life & Legacy Plan** ensures your assets go to the right people and that you receive care from trusted individuals in the event of incapacity. Estate planning during divorce is about more than just protecting your money—it’s about securing your legacy.
How We Help You Navigate Estate Planning During Divorce
As a Personal Family Lawyer® Firm , we guide you through life’s transitions with expert estate planning services. We don’t just draft documents—we ensure your plan evolves with your needs and protects your family from legal headaches.
Through our Life & Legacy Planning® process, we help you:
- Update your estate plan to reflect your new circumstances
- Ensure your assets are properly titled and designated
- Protect your children’s inheritance and future
- Provide legal protection against unintended claims
Don’t leave your estate vulnerable during this critical time. Take the first step toward securing your future—click below to schedule a complimentary 15-minute consultation:
