A separation or divorce changes your life drastically. You'll want to make sure you keep your finances in order, by making some changes on important documents.

1. Changing the beneficiary
You should change the designated beneficiaries on your

• life insurance
• IRAs
• retirement plans from civilian or private companies

The designated beneficiary is the person or persons who will receive the death benefits at the death of the owner. If you do not take care of this, those benefits will pass to whomever you have listed on the beneficiary form, even if you have updated your will. Most retirement accounts are handled a little bit differently. If you are married at your death, your spouse will receive the death benefit from your qualified retirement benefits, regardless of whom you have listed on the beneficiary form. You should consult with a divorce attorney to determine how qualified retirement benefits are distributed under your state's law after divorce. Under federal law, you cannot remove your spouse as a beneficiary of your retirement benefits if you are separated but not yet divorced without your spouse's consent. You divorce attorney can advise you on how to handle this in a marital property settlement agreement.

2. Update your estate plan, including your will
Who will you want to receive your assets upon your death? Your estate plan handles that and much more. If you are separated and do not have a will, your spouse will receive some of your estate because every state has an intestacy statute that describes how property owned by a deceased person is to be distributed when the individual dies without a will. Therefore, it is very important that you prepare a will to be sure your assets are distributed to the individuals you wish to receive them.

If you are currently separated, it is important to update your will, because if you are not legally divorced, your separated spouse may claim a statutory elective share of your estate, usually one-third or one-half. You may want to formally disinherit your spouse. This statutory share is available whether you have a will or not. A spouse remains a spouse and retains elective share rights until the decree of divorce is final, unless the elective share rights are waived in a marital settlement agreement. You should consult a divorce attorney to determine how your state's laws handle distribution of assets to your separated spouse after your death.

After a divorce decree has been issued your ex-spouse will not benefit under intestacy or elective share statutes. However, you should update your current will to remove your ex-spouse as a beneficiary and probably as Executor as well.

3. Providing for your children
If you have minor children, you and your child's other parent should agree who will be guardian of your children if something happens to both of you. If you have not appointed a guardian for your children and something happens to you and your children's other parent or both of you become incapacitated, a court steps in and appoints a guardian to care for your children. This may not be the person you would have selected. Although the courts formally appoint the children's guardian, courts normally place great weight on a parents' selection of guardian. A guardian is normally nominated in a will. Therefore, you should, at a minimum, prepare a will that names a guardian for your minor children—someone whom you trust to raise your children. It is a good idea to coordinate the selection of a guardian for your children with the children's other parent.

4. Review your power of attorney
In addition, you should retrieve any durable power of attorney that names your spouse as your agent. This is important because a durable power of attorney allows you to name an individual as your agent to make any financial decisions on your behalf that you ordinarily could make yourself. The person you authorize would be able to sign checks on your behalf, sell your property, invest your assets, or even file your tax returns—all for your benefit. It is likely that you would not want your separated spouse to have this power over your financial affairs.

5. Update living wills and medical directives
It is also a good idea to make plans in case you become incapacitated (e.g., unable to voice your desires on your medical treatment). You would want to avoid conflicts within your family as to who should make decisions on your behalf and answer questions about what decisions you would have wanted made.

By having a living will and an advance medical directive you are able to make your wishes clear. A living will is a document that provides that your life not be extended by extraordinary measures if you are suffering from a terminal condition.

You may download state specific forms at: http://www.caringinfo.org.