Divorce affects millions of Americans each year, potentially disrupting every aspect of the divorcee’s life. Because a divorce generally leads to not only the formal dissolution of a marriage, as defined by the Colorado Judicial Branch, but also the separation of assets, each individual’s estate plans will likely need to change, too. Estate planning after divorce can be complicated with important new components to weigh. If you have recently divorced or are divorcing, consider contacting an experienced family law attorney at the Colorado Divorce Law Group today by calling (720) 593-6442 to schedule a consultation.
Even the prospect of divorce may prompt spouses to revise their joint Last Will and Testament (will) or change beneficiaries for insurance policies or individual retirement accounts (IRAs) before finalizing the divorce. In fact, if one spouse dies while the divorce is pending or during a time of legal separation, the other spouse will receive the benefits if he or she was previously named the beneficiary. On the other hand, if the divorce is final and one spouse dies before making changes to these policies, the state of Colorado will revoke any benefits the former spouse may have received.
Therefore, if a person intends to file for divorce, he or she may want to initiate an estate planning update as quickly as possible. For estate planning after divorce or during, a skilled attorney from the Colorado Divorce Law Group may be able to help.
Prior to divorce, a person’s estate plan presumably includes his or her spouse. Following the divorce, the former spouse generally becomes less prominent in the estate plan, if included at all. The details of a couple’s divorce agreement—also known as a marital settlement agreement—may dictate how the former spouse is included in the new estate plan.
Divorce agreements often explicitly detail the separation of property and assets. Therefore, a new estate plan should reflect any division of assets included in the legally binding divorce settlement, which may supersede the estate plan where there is conflict. If, for example, a person agreed to pay alimony, this stipulation may be included in his or her new estate plan. If this information is not included, a probate court may need to order that the estate cover the alimony payments.
Just as a divorce constitutes a fresh start, it may be best to start an estate plan from scratch after ending a marriage. A divorce could alter a person’s plans so fundamentally that starting over makes the most sense. As with any estate planning matter, there may be benefits and drawbacks to consider when starting a new estate plan. However, a person may choose to revoke his or her old will and start anew because:
Comprehensive estate plans generally outline who should make medical decisions for the testator if he or she should experience poor health. This is one aspect of an estate plan that is especially important, as the holder of a healthcare power of attorney may need to make life-or-death decisions.
According to the Colorado Department of Public Health and Environment, a medical durable power of attorney (MDPOA) allows an individual to make decisions about a person’s health when that person is unable to make those decisions. When you cannot speak or otherwise communicate, you will want someone you can trust to retain the MDPOA. Following a divorce, it is important to ensure that the person with the MDPOA is a trusted person, and that is usually not the former spouse.
Divorces that involve children are inherently more complex. A divorce agreement can dictate many of the parents’ custody-related concerns, and a new estate plan may mirror that agreement. However, many parents choose to detail custody matters beyond the parameters of their divorce agreement, including who will have custody of the children if the parent dies.
Children may also become a larger part of a person’s estate plan without a spouse. Many parents want to ensure that certain assets pass to their children in their revised estate plans. A knowledgeable attorney may be able to explain how to protect the children from untenable tax burdens, which they may face with IRA disbursements and other types of inheritances.
Because divorce can happen, a person or couple may want to make an estate plan that is as divorce-proof as possible. This could mean prioritizing children or other blood relatives as beneficiaries, executors, or trustees rather than the current romantic partner. Though most people do not plan to get divorced, insulating an estate plan from the unpredictable nature of romantic relationships can help to avoid many potential issues. With this approach, a person may avoid necessary revisions of his or her estate plan in the future.
Estate-related concerns can be infinitely complicated. When working to reorganize an estate following a divorce, ask about the following:
An estate plan is a highly personal array of documents. Your plan should reflect your wishes for the people and organizations you care about. Be sure to form a plan that gives you peace of mind.
When reviewing your current estate plan, record your goals for your estate. Estate planning after divorce presents unique challenges, but an estate planning attorney can help you craft the legal documents that will protect your assets and your loved ones. If you have recently dealt with divorce, you may want to refresh your estate plan, including your will, insurance policies, retirement accounts, and other assets. Consider contacting an experienced estate planning attorney from the Colorado Divorce Law Group today by calling (720) 593-6442 to schedule a consultation.