You have planned your life carefully. With your spouse, you have drawn up a will and established trusts to organize your estate after your deaths. You have made decisions about the guardianship of your children, should anything happen to you both before they turn 18. Together, you have put insurance policies in place for health, life, and disability. Most likely, you are also each named as beneficiaries on the other’s retirement plan.
However, there is one thing you did not plan for: divorce.
What happens to your estate plan now? Here are 4 key strategies to ensure your wishes are protected during and after the process of separation and divorce.
The estate planning documents you will need to be familiar with include your will, medical power of attorney, statutory durable power of attorney, insurance policies, and any trusts you and your spouse may have established together, such as a special needs trust to set aside funds to care for a family member with disabilities. Most of these documents will need to be updated or replaced, as you and your soon-to-be ex may have different ideas about beneficiaries and instructions once one of you passes away.
If you and your spouse have life insurance, be clear on how it is paid for and what it guarantees. Whoever owns the policy is responsible for paying premiums and keeping the policy in force. They also have the authority to change beneficiaries. It is important to make sure you and your family are provided for in the event of your ex-spouse’s premature passing. Life insurance is an important component of any divorce settlement, to guarantee the continued flow of alimony, child support, or both, as determined by the divorce settlement. Having a trust as owner of the insurance policy is a great way to avoid gaps and pitfalls in insurance planning that might otherwise arise during or after a divorce. Continue reading to learn more about using a trust for these reasons.
A revocable living trust will spell out instructions and requirements for paying alimony and child support. The trust’s creator – the grantor – is required to fund the trust, which will make payments according to the trust’s provisions. At Your Legacy Legal Care, we take away the stress and worry of funding your trust properly by having an in-house Funding Coordinator to assist you. The added benefit of a trust means that funds can go to beneficiaries upon the grantor’s death – without being tied up in the probate process.
This is perhaps the most important part of your plan during a divorce. An estate planning attorney, such as one of our experienced attorneys at Your Legacy Legal Care, can review the divorce settlement and look for any gaps that may be present. Some questions our attorneys will consider can include:
Divorce attorneys may have a different set of concerns and may overlook these key considerations.
Lastly, be sure to hire your own estate planning attorney rather than continuing to use the attorney who drew up the joint plan for both you and your spouse. Under most state laws, when couples are jointly represented, everything you tell the attorney, even privately, is not confidential from your spouse.
For assistance with ensuring your wishes are protected during a divorce, speak with one of our experienced estate planning attorneys by calling our office at (281) 218-0880 or schedule online here.
Kimberly Hegwood is the Managing Attorney of Your Legacy Legal Care, a Houston estate planning law firm. With more than 25 years of experience practicing law in Texas, she represents clients in a wide range of legal matters, including elder law, asset protection, estate planning, Medicaid crisis planning, probate, guardianship, and other estate planning practice areas.
Kimberly received her Juris Doctor from the South Texas College of Law and is a member of the State Bar of Texas.
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