Estate planning is a crucial — and often underutilized — process that includes many different aspects, the most recognizable of which would be arranging for the distribution of possessions and assets in the event of death.

Creating this plan helps to ensure all pieces of an individual’s estate are disseminated to the proper beneficiaries as quickly and seamlessly as possible while minimizing the probate process.

However, there are certain times throughout life where circumstances will change and adjustments need to be made for how an estate is divided. One of the most common events requiring the revision of beneficiaries is divorce, yet many recent divorcees neglect to update their plans accordingly.

Whether they thought their ex would automatically be removed upon the nullification of their marriage or they simply forgot, failing to update an estate plan after a divorce can have some very unfortunate consequences.

For this reason, it is crucial that financial advisors work closely with estate planning attorneys to better determine the best possible strategies that fit a divorcing client’s unique needs.

Know Your Limitations

While a financial advisor likely understands some aspects of estate planning, it is unreasonable to presume they should have comprehensive knowledge of this complex legal process in addition to their financial education.

It is true that several certifications require a level of estate planning expertise, including CFPs and CLUs, but the majority of financial advisors will not have the proficiency necessary to draft effective plans.

While it may be difficult to admit their own limitations, it is important for financial advisors to let their clients know up front that collaboration with an estate planning attorney would be in their best interests.

Together, they are far more likely to devise a creative — but more importantly administrable — plan for their client to minimize the potential probate and legal hoops that relatives will be put through should the unexpected happen.

However, the advisor’s role will not stop once the plan is created, as it must also be maintained and continually updated after major events in the client’s life, particularly divorce.

After the end of a marriage, countless areas of an estate plan need to be updated to reflect how a client’s assets will be divided now that their ex is unlikely to be the intended recipient of any property or insurance payouts.

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