Estate Planning During Divorce
The July 2024 passing of beloved Gen X actress Shannen Doherty offers a powerful reminder of how critical estate planning becomes during divorce. Known for her iconic roles in “Beverly Hills, 90210,” “Heathers,” and “Charmed,” Doherty faced her illness with grace and determination—and took crucial legal steps to protect her estate in her final days.
Her story highlights an often-overlooked truth: timing and planning during divorce can make the difference between your wishes being honored or completely undone.
The Power of Timing
According to reports, just one day before her death, Doherty filed for an uncontested divorce from her husband, Kurt Iswarienko, who signed the agreement the following day. This final act proved pivotal.
By completing the divorce, Doherty ensured that her assets—including her estimated $6 million Malibu home and future residuals from her acting career—would be distributed according to her wishes rather than community property laws.
Had her divorce not been finalized, the outcome could have been dramatically different. In states like California, where community property laws apply, a spouse may retain rights to half of marital assets until the divorce is legally complete. If Doherty had passed away mid-proceeding, her estate could have been tied up in years of legal disputes, potentially diverting assets away from her intended beneficiaries.
Common Estate Planning Mistakes During Divorce
Divorce is one of life’s most emotionally and financially demanding experiences—and it’s also a time when estate planning often gets overlooked. Here are four key mistakes people make that can lead to unintended and lasting consequences.
1. Waiting Too Long to Update Beneficiary Designations
Many people assume that once a divorce is filed, their ex-spouse is automatically removed as a beneficiary from insurance policies, retirement accounts, or other assets. Unfortunately, that’s not always true.
Some states automatically revoke spousal beneficiary designations upon divorce, but others do not.
Federal law often supersedes state law—particularly for employer-sponsored retirement accounts like 401(k)s.
The result? Your ex-spouse could still inherit your retirement or life insurance benefits if you fail to update those designations. Always review and revise beneficiaries as soon as your divorce is filed—and confirm that the change complies with any court orders or settlement terms.
2. Forgetting About Digital Assets
From online banking and cryptocurrency to photo archives and frequent flyer miles, your digital footprint has real financial and sentimental value.
Divorce is an ideal time to:
Inventory all digital accounts and assets.
Change passwords and recovery contacts.
Document access instructions for trusted individuals.
Without updating these details, your loved ones could lose access to valuable accounts—or sensitive information could fall into the wrong hands.
3. Neglecting Incapacity Planning
Many couples name each other as agents for health care or financial power of attorney. After a divorce, those appointments should be revisited immediately.
If your ex-spouse is still legally authorized to make medical or financial decisions for you and something happens, they could retain decision-making power you no longer want them to have.
Updating your Advance Health Care Directives and Power of Attorney ensures that only trusted individuals can act on your behalf if you become incapacitated.
4. Making Emotionally Driven Decisions
Understandably, divorce can trigger anger, grief, and stress, but emotional decision-making can lead to estate plans that cause unnecessary conflict later.
An experienced estate planning attorney can help you approach these decisions objectively—balancing your immediate emotions with your long-term goals for financial stability and family harmony.
How to Protect Your Assets During Divorce
Whether you’re in the midst of a divorce or have recently finalized one, taking proactive steps now can prevent costly and painful complications later.
Step 1: Create an Asset Inventory
List everything you own—real estate, investments, insurance, digital accounts, and personal property. Separate assets into what’s jointly owned and what’s individually owned. This provides clarity for both the divorce and your future estate plan.
Step 2: Review and Update Beneficiaries
Systematically check every financial account, insurance policy, and retirement plan. Beneficiary designations typically override what’s in your will or trust, so ensuring they’re up-to-date is essential.
Step 3: Update Your Estate Planning Documents
Review your will, trust, and powers of attorney. Remove your ex-spouse where appropriate and add new agents or trustees. Update guardianship nominations if you have minor children, and verify that your documents align with your current wishes and state law.
Lessons from Shannen Doherty’s Story
Shannen Doherty’s foresight—finalizing her divorce just before her passing—demonstrates the profound importance of timely action. Her decision ensured that her estate would be distributed according to her intentions, sparing her loved ones from lengthy legal battles.
Her legacy serves as a reminder: estate planning isn’t just for the wealthy—it’s for anyone who wants to protect their family, their assets, and their peace of mind.
Take the Next Step
Divorce represents a turning point—and your estate plan should evolve with you. Whether you’re beginning the divorce process or have recently finalized it, now is the time to ensure your estate documents reflect your new reality.
Schedule a confidential consultation today to review your estate plan, protect your assets, and ensure your wishes are carried out—no matter what life brings.
