Divorce is an unfortunate reality for over half of all married couples. From a legal standpoint, divorce sets changes in motion that can affect not only your life, but also your legacy. Divorce allows each person the legal right to re-marry and new children and/or step-children may come into the picture. Property division can be one of the most complicated (and contentious) aspects of a divorce proceeding. Real estate, personal property, retirement assets, and other assets must be divided. As part of the divorce process, it is important to reflect subsequent changes in assets in your estate plan and adjust documents accordingly.
In most cases, divorces call for a change in beneficiaries on retirement plans, bank accounts, and insurance policies. As a general rule, your estate plan cannot violate any provision of a property settlement agreement or final divorce decree. For example, you may be required to name your ex-spouse as a life insurance beneficiary, to afford them a portion of your pension, to retain children on a health insurance plan, or to provide for the lifelong care of a special needs child. Divorce laws vary from state to state, and your ex-spouse or children may be entitled to certain benefits depending on their eventual state of residence. Experienced family law counsel can advise you of your rights before, during, and after the divorce process.
If you undergo a change in your marital status, your estate planning documents should be reviewed and updated. If you don’t have estate planning documents, such a life change presents good timing to draft the basic documents: a will, power of attorney, and advance medical directive. An experienced estate planning attorney can guide you through a number of important decisions:
- Who should be named as the executor of your will?
- Who should be named as the beneficiaries of your will/
- Who is to be appointed as your agent for financial and health care decisions should you become incapacitated?
- Who is designated as the trustee of your trust?
Revocable living trusts, children’s or grandchildren’s trusts, life insurance trusts, and even pet trusts are options you may wish to discuss with your attorney. Consider what you must do after a divorce to ensure that your legacy is what you want it to be.