Divorce is a tough process for everyone involved. Even in situations where both spouses want it and know it to be a good outcome, there are so many complicated, lengthy aspects to the process that can place more stress on the couple as well as their families.
If you have already planned your estate in marriage, a divorce will obviously require some work to reconfigure in light of your separation. Regardless, assets—and the ownership thereof—get more complicated after divorce, even if you didn’t set up an estate plan while still married.
After a divorce, your court-approved property settlement agreement outlines who gets what and how to divide assets. Once this is determined, you then have to work with our team and financial institutions to ensure those assets are aligned first with your divorce decree and then in respect to your estate plan. These updates will likely change what you have planned or wanted to plan for your children or other heirs. Furthermore, joint accounts such as bank accounts, some life insurance policies or lines of credit require communicating to the owning companies what the divorce dictates about ownership or separation of these accounts. After all entities are on the same page, we can update your estate plan consistent with these changes.
Asset ownership after a divorce is important to clarify for your estate plan. Whether you’re building your estate plan from scratch after a separation or amending one that was developed in marriage, aligning your assets with your plan in light of the divorce decree is essential. Not only does it ensure that your estate plan is still effective in painlessly transferring assets to the heirs you’ve identified, it also prevents the lengthy and costly legal disputes that will occur if the estate plan and divorce decree are in conflict.
If you’ve already gone through some degree of estate planning, this will likely also require an update to various powers of attorney, assignment of a health care proxy, and your will and trust’s beneficiaries. What once might have been spread between both families in a marriage needs to be reassigned so that you have people identified to dictate end-of-life care on your behalf, execute your will and trust in accordance with your wishes, and handle sensitive matters like retirement accounts, debts, and personal documents or online accounts.
Making sure your assets are aligned first with a divorce dictate and then further aligning that with your estate plan is paramount in any divorce. But there can be special considerations when a divorce occurs later in life, such as ensuring you also have enough money for retirement. Make sure you are leaving enough for yourself after you no longer work, from having the funds to live comfortably in retirement to ensuring that you have the means in place for health care and assisted living while also making sure you can receive government benefits for late-in-life care and housing.
If you’ve established a trust as part of a comprehensive estate plan, don’t stress about how a divorce can complicate it. Though it will take some adjustments and realignment, our team at Family Estate Planning Law Group is experienced with reconfiguring any estate plan to fit with emergent or sudden needs. You can always work with us, throughout your life and changes in life, to make sure your assets are protected and that the plan you have in mind for taking care of your loved ones after you’re gone is still rock solid.