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You're divorced, but can your ex still get your money?

After all the heartache, anger and expense of filing for divorce, it is done. Your property was divided, the custody battle is over and monthly payments have been agreed upon. You are pretty confident that your ex-spouse is done getting any more out of your dwindling assets. Have you checked your estate plan?

Many divorcees forget about the beneficiary designations on life insurance policies and retirement accounts that were opened years ago, particularly in those DIY divorces. At the time you specified - and wanted - your spouse would get it all if you passed away prematurely. After you sign and file the divorce settlement, those beneficiaries remain in place unless you change them.

Your divorce decree might say that one spouse is entitled to this but not that, but it does nothing to alter who will receive your 401K, IRA account or the extra insurance you purchased to protect your family. The beneficiary designations will control.

What can you do to avoid an unintended distribution to your ex?

Create a trust for the children

Even if you stipulate in your will that your children are your beneficiaries, if your ex remains their guardian, leaving the kids a lump sum of cash is virtually the same thing as writing a check to your prior spouse.

If you want to ensure money is available for their education and early adult life, you might want to create a trust that specifies how the funds can be spent and when.

Call your insurance companies

Verify who is actually listed as a beneficiary on all your insurance policies, and even as a healthcare proxy. Take a day or two to contact your insurance companies to make the necessary changes.

There may be a secondary beneficiary listed on the policies as well. If you do not stipulate who it is, and the primary passes away with you, your ex could receive those funds inadvertently.

Check with your employer

If you have been a long-time employee, there are myriad places that contact and financial information could be hiding. Contact your human resources specialist to review who could receive cash from your retirement accounts.

It is also a great opportunity to update emergency contact lists. In case of an accident, do you really want your past to pop up for moral support?

Perhaps you will want to wait a little bit longer before making these kinds of decisions. After all, if your ex is a good parent and an honest person, once the raw emotions that emerged during the divorce have a chance to heal, you may decide that they are the right person to inherit your estate.

Your attorney experienced in estate planning is an objective party who may have reasonable and intelligent suggestions on how best to protect your interests. It is worth contacting one and listening to his or her advice.

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