Splitting Assets, Securing Futures: Navigating Estate Planning Through Divorce

Nearly 50% of marriages in the United States will end in separation or divorce. Divorce has a major impact on life, but how does it affect your estate plan?

A basic rule to abide by for estate planning is to review your documents with an attorney after any major life change.  This would include death, marriage/divorce, purchase or sale of real property, or a substantial shift of assets. A divorce or a subsequent marriage are definitely considered major life changes. These events signal a need for you to evaluate or reevaluate your estate plan and beneficiary designations. 

Planning Before Marriage

Going through a separation and divorce can be an extremely difficult and emotional process.  What is important to keep in mind is that the process is finite – it will eventually come to an end.  If you were thoughtful on the front end of the marriage and entered into a prenuptial (or postnuptial) agreement, that agreement will serve to help you navigate the process.  A well drafted prenuptial (or postnuptial) agreement should address issues involving separate versus marital property designation, asset distribution, alimony, custody of minor children, and a variety of other issues.  At McIntyre Elder Law, we can work in conjunction with your domestic attorney to make sure your estate plan is the best fit for your situation.

Individuals should always maintain separate financial accounts before, during, and after a marriage.  Many women in particular find themselves completely cut off from financial resources during a divorce and/or separation – especially when the woman has taken a break from her career to care for minor children.  This is yet another reason why getting advice from a family law attorney before entering into a marriage contract is a good idea.

Nobody wants to think about having to end a marriage. However, half of all marriages ultimately end in divorce, so it is very practical to make a plan at the beginning of a marriage (when the parties get along) of what will happen in the unfortunate event that the marriage ends. 

Updating Your Estate Plan After Divorce

Once your divorce decree is final, it is wise to consider the following actions to update your estate plan, or to create a new one:

1. Update your Last Will and Testament 
2. Revoke & update your General Durable and Healthcare Powers of Attorney
3. Name new beneficiaries and Powers of Attorney
4. Consider a Trust 
5. Revisit guardianship for minor children
6. Review your prenuptial (or postnuptial) agreement
7. Understand your Life Insurance policy
8. Check account holder status on all bank, credit, and brokerage accounts

Special Considerations

Even if you remove your spouse from your estate planning documents, you may not disinherit your spouse or soon to be ex-spouse unless you receive your spouse’s formal consent on a separation agreement or until you’re formally divorced. Until either of those things happen, you have a legal obligation to take care of your spouse’s necessary health needs and support, and to leave your spouse a state law defined portion of your assets, even if everything you own is in your name, you didn’t leave them anything in your estate plan, and you didn’t name them as a beneficiary on any of your accounts.  This is yet another reason to make sure your estate planning documents are up to date and that you educate yourself on the estate planning rules of the state where you reside.

Re-Planning

Another thing to keep in mind when selecting your estate planning attorney is that you and your spouse may need to hire separate attorneys from separate law firms to accomplish your individual goals.  Especially in the case of a second, or subsequent marriage, where one or both parties may come into the marriage with substantial assets and children in tow, there may be a conflict of interest having the same attorney or even the same law firm prepare your estate plan.  If your goals are different, or if you want to specifically protect your separate property and children from a previous marriage or relationship, having an independent attorney for your estate plan is a wise choice.  

Let’s Talk About Your Estate Plan

In conclusion, estate planning is a crucial aspect of managing one’s assets and ensuring their distribution according to one’s wishes, especially during major life changes such as divorce. Amidst the emotional turmoil of divorce, it’s essential to remember that the process is finite and that careful planning can alleviate many uncertainties. Seeking advice from both family law and estate planning attorneys can provide comprehensive protection for individuals and their assets. Updating estate planning documents, considering trusts, revisiting guardianship arrangements, and understanding legal obligations towards former spouses are all vital steps in securing one’s future. By proactively reviewing and updating estate plans, individuals can ensure their intentions are accurately reflected and their loved ones are provided for, regardless of life’s unexpected turns.

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Take the First Step Today

Don’t wait until it’s too late. It is never too early to get your affairs in order. McIntyre Elder Law is offering FREE consultations to discuss your estate planning and elder law needs.

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