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  • Writer's pictureJoshua B. Beisker

Estate Planning For Divorce

During the lifetimes of most married couples, especially when a child is involved, mutual estate planning is done so as to ensure that if one spouse passes away, the deceased spouse’s assets pass to the surviving spouse.  Generally speaking, this is a sound planning strategy; unfortunately, if a marriage ends in divorce, each person will effectively have to update and/or revise their respective estate planning strategies.

Updating Planning Documents

A divorce has the potential to cause a Last Will and Testament to be invalid, though in most cases, only the portions of the Will dealing with an ex-spouse will be extinguished after a divorce. 

That said, it would not be prudent for an individual to rely on that alone in lieu of updating or revising his/her Will.  For example, if a divorced couple had a child during their marriage, typically, an individual’s assets that would have passed to the ex-spouse under the Will would instead pass to the child.  However, if a married couple divorces but did not have a child, if no changes are made to an individual’s Will as to how assets originally set to pass to an ex-spouse should now be distributed, then it is likely that the Court will be required to make the  determination during the probate process. Ultimately, this could result in an individual’s assets being distributed in such a way that is not in accordance with how that individual would have otherwise intended.

It is also important that individuals do not forget to update the beneficiary designation forms for items such as life insurance policies and retirement accounts following a divorce settlement.  This often-missed step can be a costly mistake, which can lead to significant hardships on a subsequent marriage or beneficiaries in general.

Maintain Control of Assets

A divorce will often times invalidate an ex-spouse’s claim to an individual’s property, meaning that there is little chance that an ex-spouse might obtain valuable assets like a home if their ex-spouse passes away.  However, without proper planning, there is still the chance that an ex-spouse can maintain a significant amount of control over such assets.

For example, if a minor child is under age 21, all assets inherited by the minor child are generally to be held by a custodian or a guardian; however, if an individual fails to appoint one under the Will, then the ex-spouse may be the one who ends up controlling such assets until the minor is old enough to do so on his/her own.  Hence, the ex-spouse may still be able to exercise a significant amount of control over an individual’s estate.  

There are many strategies to ensure that the assets passing to the child will not be under the control of the ex-spouse.  The most basic would be to appoint a specific custodian or guardian under the Will (who is not the ex-spouse) to control the assets for the benefit of the child.  Another would be to revise a Will to include Trust language for the assets that would pass to the minor child in order to keep the assets protected from creditors and all other potential consequences that often accompany a divorce.

If a couple had estate planning in place during the marriage and subsequently divorces, it is imperative that each individual review and update their planning documents accordingly so as to ensure that such individuals’ assets will ultimately pass to the intended beneficiaries.

As always, if you have any questions, please feel free to contact us here or call us at 585.258.2800.

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