From Our “Ask a Question” Mailbag: “My husband and I are getting divorced. I have been putting this off, but do you have any Estate Planning tips during a divorce?”
Peter Klenk, Estate Planning Lawyer.
Estate Planning Tips During a Divorce?
Once the divorce process begins, most of us are on an emotional rollercoaster. Uprooted living situations, children’s schedules disrupted, insecurity and the unknown make it challenging to address anything but the immediate issues.
Once the immediate dust settles, though, there a list of Estate Planning items that you need to address. This article is a short introduction, but feel free also to contact us for a phone call. Sometimes it is easier to brainstorm about these issues with a professional.
A Quick Estate Planning Divorce Checklist
Follow this link for more details about Divorce and Estate Planning, but for now, here is a quick and dirty checklist:
- Review your 401k, IRA, life insurance, and other assets with beneficiary designations. Is your spouse still listed as your beneficiary? If so, update the destination. If you want these assets to pass to your children, then let’s talk about setting up a protective trust. Without careful planning, if your children are young, your spouse could end up controlling these assets.
Update Your Living Will and Medical Power of Attorney.
- This document gives someone the right to speak for you on medical decisions if you are unable. If you want your spouse to continue having this power, you must reaffirm this wish in a new document. Otherwise, family members might dispute your spouse having the ability. But, if you want someone new to make medical decisions on your behalf, a new Living Will and Medical Power of Attorney is vital.
Update your Financial Durable Power of Attorney.
- A Durable Power of Attorney names your Agent with the power to make all financial decisions. A powerful document, banks will ask no questions if your Agent empties your accounts. Obviously, when giving Estate Planning Tips during a divorce, a reconsideration over who serves as Agent is essential. Arguably, if you don’t change the document, your spouse could manage the divorce terms should you have a car accident and become incapacitated. Further, the person you name would have to negotiate with your spouse over child care expenses, the sale of the family house, and the division of accounts. You must take care to name the correct person.
Updating Your Will.
- Your Will dictates who receives your probate assets. The Will also appoints your executor and the trustee for assets you leave for children. Without careful planning, your estate could experience long delays and avoidable costs. Let’s brainstorm options. There are likely several ways to address your situation. These could include setting up protective trusts for your children. These trusts can name your parents or siblings as trustees. The trustee manages the funds until your children are old enough to take on the responsibility themselves. These trusts, known as Dynasty Trusts, can provide your children with protection from their divorce or creditors.
For more detailed information about Dynasty Trusts, see my page “Dynasty Trusts, All You Need To Know.”
In Conclusion: Estate Planning Tips During a Divorce.
I hope you found helpful this short article about Estate Planning Tips During a Divorce. I have also included some links for more detailed information. If you are curious about updating your Will, Power of Attorney, or Living Will, contact us and let our Estate Planning Lawyers help walk you through what can be a confusing process. In fact, feel free to contact our office for a free consultation.
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