Estate Planning During Divorce
Ah, the “D” word (not Dallas). If this blog applies to you, let’s start by saying that you will get through this tough time! Divorce is hard. Emotions are high and finances are strained while trying to make tough decisions. During the process of a divorce, updating your estate plan is understandably not the first thing on your mind. However, a divorce can significantly impact your will, accounts with beneficiary designations, and power of attorney documents. At Hardie Alcozer, our estate planning attorneys are here to help walk you through important things to consider as you navigate updating your estate planning documents during a divorce.
How are my documents affected?
Did you know that if you were to pass away in the middle of a divorce, your soon-to-be ex-spouse could still be a beneficiary under your will? Your Last Will and Testament will treat your spouse (rather ex-spouse) as if they predeceased you and the next executor will step into that role only after the divorce is finalized. The same applies to any items that would have been considered an asset for your spouse to receive. The best remedy is to create new documents as soon as possible instead of waiting for a decree to be entered with the court. For the important role of executor, you will want someone who will carry out your last wishes, pay any debts you may have, and divide the remainder of assets between the beneficiaries you choose.
Your Medical Power of Attorney and Statutory Durable Power of Attorney are treated similarly in Texas. Your spouse is still your agent until the decree is entered with the court to finalize the divorce. After the decree is signed by the judge, the powers of attorney that our office prepares have language included to say that the divorced agent listed is no longer able to act in that capacity. To avoid your soon-to-be ex-spouse from making decisions for you should you be incapacitated prior to the divorce being finalized, it is best to have new documents prepared.
What about life insurance?
If you do not remember to update the beneficiary on your life insurance, your ex-spouse could still be considered a beneficiary after divorce. It depends on the company that you have the life insurance through. It also depends on whether the court requires your ex-spouse to remain as a beneficiary as part of the division of personal property. Sometimes this is required if there is child support involved to ensure payment. If you and/or your spouse do not have life insurance, it may be a good idea to speak to your divorce attorney about including this language in your divorce decree.
What do I do if I have young kids?
If you are on good terms with your ex-spouse and that person is the other parent to your children, there is no written rule to prevent that person from being the trustee on any trusts created for your children’s benefit. If there is reason that your ex-spouse should not be listed as the trustee, then we recommend you update your documents as soon as possible to prevent a possibility of them being appointed.
What if I do not have any estate planning documents?
Let our estate planning lawyers fix that! If you do not have a will and/or incapacity documents, we would love the opportunity to discuss this with you and help you not only create these documents but give you peace of mind that your assets and your children (if you have children) are taken care of should something happen to you. Call us today!