Estate Planning after Divorce
Divorce will involve serious and important questions related to minor children, division of assets, and financial support. Often, after the divorce is finalized, crucial estate planning considerations may be overlooked.
The last thing you’ll want to do after a divorce is more legal work. Nevertheless, it is crucial to properly update, correct, and understand your estate planning after divorce. Here are a few issues to consider:
- Your Estate Planning Attorney: It is typical for a married couple to use the same attorney for their estate planning. Once you are divorced, your financial and personal interests with your former spouse are no longer aligned, and you may share information with your estate planning attorney that you wish to remain confidential from your former spouse. For this reason, you should use a different attorney for estate planning after your divorce.
- Effect of divorce on estate planning documents: Dissolution of marriage affects some of your estate planning, but not others. For example, any gifts to your ex-spouse through your Will may be void, but death benefits through insurance, retirement accounts, or jointly-held assets may not be. Alternatively, you may still intend for your former spouse to receive certain assets upon your death. This may not be possible without proper documentation that makes your intention clear. Consult with an attorney, and make sure it is clear that you are making a transfer to a former spouse.
- Fiduciary positions: You should carefully review the other people named in your estate planning documents. For example, you may have named your now-former spouse as your Agent in your Power of Attorney or as Guardian for your minor children in your Will. These designations will probably be void after your divorce. However, if you named your former brother-in-law or former friends or advisors, these designations will still be valid. You need to consult with an attorney to determine the effect of your divorce on these documents.
- Ongoing financial obligations: Often a divorce includes ongoing financial obligations to the former spouse. If you are engaging in estate planning after a divorce, it is crucial to provide your estate planning attorney with all of the final divorce documents, including any property agreements. If your new estate plan violates the terms of the divorce, you may be leaving your beneficiaries little more than a lawsuit.
In nearly every case, we recommend a new, separate estate plan after divorce. In our post-dissolution consultations, we carefully consider your new legal status, new tax status, and your new estate planning goals in this phase of your life.