Getting Divorced? Don’t Overlook These 4 Updates to Your Estate Plan—Part 2
The process of getting a divorce is an overwhelming experience that causes an impact in almost aspect of your life, right down to your plan for your estate. Yet, with so much to deal with during the divorce process, many people forget to update their plan or put it off until it’s too late.
There can be a number of tragic consequences to not properly updating your plan, some of which you hadn’t even thought of, and you cannot rely on your divorce lawyer to know about and/or bring them up. So if you are considering or in the middle of a divorce, here are some things to keep in mind.
First, update the plans for your estate as soon as you know that the split is inevitable. Don’t wait for the divorce to be final, and here’s why: until your divorce is final, your marriage is legally in full effect. Spelled out, this means that if you die or become incapacitated while your divorce is ongoing and haven’t updated the plans for your estate, your soon-to-be ex-spouse could end up with complete control over your life and assets.
Given that you’re ending the relationship, you probably wouldn’t want your to-be-ex having that much power over you. If that’s the case, you must take action, because while state laws can limit your ability to make certain changes to the plan for your estate once your divorce has been filed. Here are a few of the most important updates you should consider making as soon as you spot divorce on the horizon.
Last week in part one we discussed the first two changes you should make to your plan: updating your beneficiary designations and power of attorney documents. Here in part two, we’ll cover the final updates to consider.
3. Create a new will
You should create a new will as soon as you decide to get divorced, since once divorce papers are filed, you may not be able to change your will and because most married couples name each other as their executor and the beneficiary of their estate. That means it’s important to name a new person to fill these roles in addition to making the new will.
Now, when creating a new will you’ll have to rethink how you want your assets divided upon your death, most likely having to choose new beneficiaries for any assets that you’d previously left to your future ex and their family. Keep in mind that some states have community-property laws that entitle your surviving spouse to a certain percentage of the marital estate upon your death, no matter what your will dictates. That means that if you die before the divorce is final, you probably won’t be able to entirely disinherit your surviving spouse through the new will.
Still, if you are thinking about this at all, you probably wouldn’t want them to get everything. Therefore, you should create your new will as soon as possible once divorce is inevitable to ensure that the people that you want inherit the remaining percentage of your estate.
Now, even if you choose to not make a new will, don’t assume that your old will is automatically revoked once the divorce is final. State laws vary widely regarding how divorce affects a will. In some states, your will is revoked by default upon divorce. In others, unless it’s officially revoked, your entire will remains valid even after the divorce is final.
With such diverse laws, it’s vital to consult with us as soon as you know divorce is coming. We can help you understand our state’s laws and how to best navigate them when creating your new.
4. Amend your existing trust or create a new one
Finally, if you have a revocable living trust set up, you’ll want to review and update it, too. Like wills, the laws governing if, when, and how you can alter a trust during a divorce can vary, so you should consult us as soon as possible if you are considering divorce. In addition to reconsidering what assets your soon-to-be-ex spouse should receive through the trust, you’ll probably want to replace them as successor trustee, if they are so designated.
If you don’t have a trust in place, you should seriously consider creating one, especially if you have minor children. Trusts provide a wide range of powers and benefits unavailable through a will, and they’re particularly well-suited for blended families. Given the likelihood that both you and your spouse will eventually get remarried, and perhaps have more children, trusts are an invaluable way to protect and manage the assets you want your children to inherit.
For example, using a trust, should you die or become incapacitated while your kids are minors, you can name someone of your choosing to serve as successor trustee to manage their money until they reach adulthood, making it impossible for your ex to meddle with their inheritance.
Beyond this key benefit, trusts afford you several other levels of enhanced protection and control not possible with a will. For this reason, you should at least discuss creating a trust with an experienced lawyer like us before ruling out the option entirely.
Post-divorce planning
During the divorce process, your primary planning goal is limiting your soon-to-be ex’s control over your life and assets should you die or become incapacitated before divorce is final. Once your divorce is final and your marital property has been divided up, you should revisit all of your planning documents again and update them based on your new asset profile and living situation. From there, your plan should continuously evolve as your life changes, especially following major life events, such as getting remarried, having additional children, and when close family members pass away.
Get started now
Putting off updating your plan, even for a few days, as you are in the process of a divorce can make it legally impossible to change certain parts of your plan, so act now. Review your plan immediately upon realizing that divorce is unavoidable, and then schedule a follow-up visit once your divorce is finalized. If you’ve yet to create any Will and Trust at all, an upcoming divorce is the perfect time to finally take care of this vital responsibility. Contact us today to learn more.
This article is a service of Levi Alexander, Personal Family Lawyer®. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a Family Wealth Planning Session™, during which you will get more financially organized than you’ve ever been before, and make all the best choices for the people you love. You can begin by calling our office today to schedule a Family Wealth Planning Session and mention this article to find out how to get this $750 session at no charge.
Photo by James Wheeler from Pexels
