If you are going through a divorce, it’s already an emotionally and financially overwhelming time. You are laser-focused on dividing your property fairly, agreeing to your children’s custody, and getting through the ordeal with all your senses intact. Chances are, the last thing on your mind is probably your estate planning.
However, during and after a divorce is one of the most critical times to protect your financial life, especially if your divorce has been acrimonious. The last thing you want is for your ex-spouse to have control over your assets should something happen to you during the process or have the ability to make serious financial and healthcare decisions for you when you no longer trust them.
Unfortunately, if you have an existing estate plan with your spouse, this could happen to you. And if you don’t have an estate plan at all and something happens to you before your divorce is final, your soon-to-be ex-spouse will likely inherit everything by default.
Do You Have an Estate Plan?
Your estate plan is a comprehensive set of documents tailored to protect and manage your financial affairs and distribute your assets while you are alive and after your death. It also lets medical providers know your healthcare wishes and addresses how you want your finances managed should something happen to you and you cannot do it yourself.
Depending on your situation, your estate plan may include:
- A will
- A revocable living trust or other types of trusts, depending on your unique financial needs
- Powers of attorney
- A healthcare directive or living will
The primary goal of your estate plan is to ensure that your financial life is protected and your wishes carried out, thereby minimizing legal complications, and potential disputes.
But if you are going through a divorce, your existing estate plan naming your ex-spouse as beneficiary of your estate will still be valid until you update it. This means that if something happens to you during the divorce process, your spouse will receive your assets according to the terms of this estate plan, not your children or loved ones. Even after your divorce, state law does not automatically nullify all of your former spouse’s rights unless you make revisions to specific documents.
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Revisiting Your Estate Plan During or After Your Divorce
If you are navigating a divorce, updating your current estate plan will be critical to ensure that your family is taken care of and your wishes followed should something unforeseen happen.
You will want to
- Revoke your old will and create an updated one to ensure that your ex-spouse does not benefit from your assets. You may also want to designate a guardian of your minor children in the event of your death. By operation of law, in most cases your ex will gain full custody of your children. Because of this possibility, you will want to consider options to prevent your ex from having direct control of the assets you have left to your children.
- Revoke any prior joint living trusts and create a new individual living trust to ensure that it no longer benefits your spouse and is managed by a trustee you have full faith in.
- Review your AMD – Advance Medical Directive (living will) and Durable Power of Attorney to ensure it outlines and clarifies your wishes and that you have appointed trusted individuals to be responsible for making medical and financial decisions on your behalf.
- Review other accounts, such as retirement, life insurance, and payable-on-death accounts, to remove your ex-spouse as a beneficiary and name new ones.
- Review the tax consequences of asset divisions from your divorce to ensure they have not left you with significant tax liabilities.
The Importance of Legal Representation
Divorce is an all-consuming ordeal, yet in the middle of the emotional rollercoaster, you must have the peace of mind to consider all the legal and financial implications. It is especially beneficial when your family law attorney can work directly with an experienced estate planning attorney to ensure everyone is on the same page, all documents are in compliance, and your future is protected. At Melone Hatley, P.C., that is precisely what our team offers.
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Protecting Your Assets is Our Job Number One
Whether you are going through a divorce and want to protect your financial assets during the process or looking to create a professional estate plan in anticipation of your post-divorce future, the estate planning professionals at Melone Hatley, P.C. are here to help. As our family law client, we invite you to take advantage of our discounted fees. You will receive a 20 percent discount on our trust services with one no-cost revision after 18 months.
Call us at (877) 462-0624 or contact us online to schedule a no-cost consultation with one of our client services coordinators.
Schedule a call with one of our client services coordinators today.
