Marriage is intended to last until death; however, the reality is that about 50 percent of all first marriages end in divorce. The divorce process and life after divorce can be difficult. The financial repercussions alone can be devastating and may affect everyone involved for years. Although no one wants to consider the possibility of divorce before they are even married, doing so is wise from a financial perspective. If you recently went through a divorce, you also need to consider how that divorce impacts your estate plan. Toward that end, the Coral Gables estate planning attorneys at Stivers Law explain what you need to know about divorce and your estate plan.
Why You Should Consider the Possibility Divorce Prior to Marriage
The negative stigma that was once associated with prenuptial agreements has all but disappeared. In fact, they are now common. A prenuptial agreement is a contract enter into between two parties in contemplation of marriage and that takes effect when the couple are legally married. A prenuptial agreement can cover things such as property division upon divorce, financial responsibilities during marriage, spousal support, and the distribution of estate assets if one spouse dies. A postnuptial agreement effectively accomplishes the same thing as a prenuptial agreement; however, it is entered into after marriage.
Divorce and Your Estate Plan
It can be easy to overlook the impact a divorce on other aspects of your life given the emotional nature of the process. If you are going through a divorce, it is important to know that your estate plan should be reviewed and likely revised during and/or after your divorce. Aspects of your estate plan to consider include:
- The division of assets. Be sure that you are clear on what assets are subject to division in the divorce and what assets are considered separate property. Even inherited property that starts out as separate property in most states can become marital property if it was co-mingled during the marriage. With retirement and pension accounts, the portion of the account that was accumulated during the marriage is usually subject to division in a divorce. To be sure that the assets you end up with are protected in the future be sure to consult with your estate planning attorney.
- Documents that need to be reviewed. Changing bequests in your Will or provisions in a trust will almost certainly need to be accomplished. You may also need to amend your Will to appoint a different Executor or amend a trust to appoint a replacement Trustee. If your spouse is your agent in an advanced directive or power of attorney, you will also likely want to revise or revoke these documents.
- Changes to beneficiary designations. Your spouse is probably listed as the beneficiary of your retirement accounts, life insurance, and financial accounts. When you divorce, you should review these accounts and make any desired changes to the listed beneficiaries. Keep in mind, however, that state and/or federal law may prohibit you from removing your spouse as the beneficiary of certain accounts while a divorce is pending so always check with an experienced attorney before making changes. You may also be required, as part of the divorce settlement, to maintain a life insurance policy for your minor children naming your spouse as the beneficiary.
Contact Coral Gables Estate Planning Attorneys
For more information, please join us for an upcoming FREE webinar. If you have additional questions or concerns about divorce and your estate plan, contact the experienced Coral Gables estate planning attorneys at Stivers Law by calling (305) 456-3255 to schedule an appointment.
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