Photo of Professionals at Rebecca W. Geyer & Associates P.C.

Caring For Generations

Your Own or Your Children’s, Divorce Can Do a Number on an Estate Plan

by | Oct 12, 2022 | divorce, estate and tax planning, Estate Planning

 

“If I die before the divorce is final, does my spouse still get all my property?” That’s a question American College of Trust and Estate Counsel Fellows Richard Gans and Diana Zeydel say they hear a lot. The divorce proceedings themselves would stop, and the estate planning lawyer and the divorce lawyer would need to compare notes, the authors remark.

Divorce, we caution at Geyer Law, is a signal that special – and immediate – attention needs to be paid to making changes to each spouse’s estate planning documents. As just one example, power of attorney and health care documents need to be changed so that an estranged ex-spouse won’t be the one making financial or medical decisions on your behalf if you’re unable to do so.

Estate planning documents that need to be updated when a divorce is imminent include:

  • will
  • trust
  • power of attorney
  • healthcare documents
  • beneficiary designations
  • joint bank and brokerage accounts

In addition, what many people don’t realize is that it is not only marital assets that are divided in a divorce, but also marital debt. That means that both spouses’ credit scores can be affected. In Indiana, another thing that is likely to be divided between divorcing spouses is property inherited by one of the spouses, although the court may look at all the factors involved.

Most parents do not want to see their estate assets go to a child’s ex-spouse, Boston attorney Neal Winston wryly observes. “Therefore, it is important that when parents are doing asset protection planning for themselves by transferring property to their children during their own lifetimes, they take this into consideration and not leave their gifted assets under the direct individual ownership of a child if there is any chance of divorce.” As Indiana estate planning attorneys, we often arrange for children’s share of assets to be held in an irrevocable trust as a safeguard against this very contingency.

Whether it’s your own or your children’s – divorce has the potential to “do a number” on your estate plan!

 

 

 

 

 

 

 

 

 

“If I die before the divorce is final, does my spouse still get all my property?” That’s a question American College of Trust and Estate Counsel Fellows Richard Gans and Diana Zeydel say they hear a lot. The divorce proceedings themselves would stop, and the estate planning lawyer and the divorce lawyer would need to compare notes, the authors remark.
https://www.actec.org/estate-planning/divorce-and-estate-planning/

Divorce, we caution at Geyer Law, is a signal that special – and immediate – attention needs to be paid to making changes to each spouse’s estate planning documents. As just one example, power of attorney and health care documents need to be changed so that an estranged orex-spouse won’t be the one making financial or medical decisions on your behalf if you’re unable to do so.

Estate planning documents that need to be updated when a divorce is imminent include:

will
trust
power of attorney
healthcare documents
beneficiary designations
joint bank and brokerage accounts

In addition, what many people don’t realize is that it is not only marital assets that are divided in a divorce, but also marital debt. That means that both spouses’ credit scores can be affected. In Indiana, another thing that is likely to be divided between divorcing spouses is property inherited by one of the spouses, although the court may look at all the factors involved.
https://www.rgeyerlaw.com/blog/2021/02/divorce-dictates-diligence-in-updating-estate-plans/

Most parents do not want to see their estate assets go to a child’s ex-spouse, Boston attorney Neal Winston wryly observes. “Therefore, it is important that when parents are doing asset protection planning for themselves by transferring property to their children during their own lifetimes, they take this into consideration and not leave their gifted assets under the direct individual ownership of a child if there is any chance of divorce.” As Indiana estate planning attorneys, we often arrange for children’s share of assets to be held in an irrevocable trust as a safeguard against this very contingency.

Whether it’s your own or your children’s – divorce has the potential to “do a number” on your estate plan!