Divorce is common in the United States. In 2019, there were 2,015,603 marriages, and 746,971 divorces. With so many marriages and divorces, it’s common for people to have second and third marriages, sometimes even more. Multiple marriages and blended families can lead to rather complicated estate planning. If you or your spouse have been married before and have children or inheritable assets from a previous marriage, you need to be certain your estate plan has planned for these issues.
How Does Divorce Impact Your Estate Plan?
Now that you know how important it is to revisit your estate plan post-divorce, you need to know where to start and why. It’s imperative that you begin by addressing the most important issues in your estate plan. While you may have already created an estate plan, if it includes your former spouse, it may no longer be useful.
Think of the complications you would have to address if you left your old plan in place, issues like:
- If you have a trust, do you want your former spouse to be included?
- If your ex is included on any power of attorney documents, is that wise?
- If your spouse is a named beneficiary on any of your accounts, do you want to keep these choices?
No one knows when they will pass away, and it’s important to prepare your estate for the inevitable, especially if you have minor children. If you aren’t yet divorced, but you are legally separated and waiting to finalize your divorce, speak with an attorney to find out what provisions you can make to protect your estate. If you pass away before your divorce is finalized or you’ve made changes, your estranged spouse will stand to inherit half of your community property, assets designated in your will, and any beneficiary designations in your pension, insurances policies, or other accounts.
Revisiting Your Estate Plan Post-Divorce
Some elements of your estate plan may need to be handled as you and your estranged spouse negotiate your settlement agreement. Other issues can be handled once your divorce is finalized. However, it’s important not to let too much time pass, especially if you think you will remarry and start a new family with additional children. In matters of estate planning, the beneficiaries you choose on your insurance benefits, trusts documents, and other elements of your estate plan supersede any heirs you place in your will. It’s important to make certain these documents match as you could create a great deal of confusion in the event you pass away.
Here are a few tips for steps you should take to ensure your estate plan is aligned with your current family situation.
- Ensure Your Beneficiaries Match: Once you are divorced or have completed your settlement agreement. Meet with your attorney and ensure your beneficiaries match those on your retirement accounts, insurance policies, annuities, and pensions.
- Review Your Titled Assets: Some assets like houses and cars do not have beneficiaries, so you will need to check your will and update it and make any changes that you need to post-divorce.
- Child Support and Life Insurance: If you’ve been ordered to pay child support, it’s likely you’ve been mandated to cover the order with a life insurance policy that continues to pay the order upon your death. You will need to include this in your estate plan.
At May, Rammell & Wells, our estate planning attorneys can begin drafting your estate plan and associated documents as soon as you’re ready. We are confident we can help you. Contact us now at (208) 623-8021 to schedule a consultation to discuss your case