Divorce is never easy. It is a very emotional time filled with many decisions that need to be made. During the emotional and financial turmoil of a divorce, your estate plan may be the last thing on your mind. However, it is something that needs to be addressed. Taking action regarding your estate amidst your divorce can ensure better financial protection for yourself and those you leave behind.
It is important to note that your spouse has certain rights while the divorce is ongoing. However, you want to maintain as much control over your assets as possible, while still adhering to the legal obligations owed to your spouse. Below are some things to consider:
Revise your Power of Attorney:
Have you ever signed a document that allows your spouse to have access to your financial records or handle money matters for you? If so, you may want to designate someone else to handle your financial matters in an emergency. In some harmonious divorce situations, an individual might be comfortable leaving their ex in control of things. However, if that is not something you are agreeable with, a new designee should be appointed.
Update your Advance Health Care Directive:
Chances are you designated your spouse to be your healthcare proxy. Should you become incapacitated while amidst a divorce, you may not want your spouse making medical decisions on your behalf. It’s important to update who will make health care decisions for you going forward.
What to do with your Living Trust
During the divorce proceeding, the assets will be split and determined who is getting what. These assets will need to come out of the current joint Living Trust and put into your individual names. At this point the Trust is empty. Upon the final divorce decree, you may need to create a new Living Trust to put your assets into and how your estate will be handled upon your passing.
Your minor children
You most likely will not be able to prevent your current spouse from being the guardian of your children should you pass away. However, you can name an alternate guardian should both you and the other parent be unavailable.
Another large issue to consider are Living Trust provisions for young children. Do you want your spouse managing and having access to money that is left for your children? If your spouse is their guardian, they will have the right to access and control their money. If you’d rather your ex does not manage the funds you leave behind for your children, you can set up a trust and designate an administrator.
If you find yourself in this situation, give us a call, we can help you through the process.