When you go through a divorce, it's essential to update your estate plan, including your will, trusts and powers of attorney. Otherwise, you could leave assets to an ex-spouse or in-laws to whom you no longer speak. Just as importantly (if not more so), you could end up with a less-than-friendly ex-spouse as your trustee and/or your power of attorney for financial, health care and end-of-life decisions.
Get Your Own Estate Planning Attorney
Many family law attorneys also handle estate planning. If yours does, that can make thing more convenient. If not, your lawyer can likely recommend an estate planning attorney to handle the necessary changes or draft a new plan for you.
It's best not to use the same estate planning attorney as you had during your marriage. As with divorce attorneys, you want someone who is representing and protecting only your interests. If your spouse handled the bulk of the decisions in your family estate plan, it's especially important that you thoroughly review and understand all of your estate planning documents with your attorney and make sure that they reflect your wishes and new situation.
It's understandable that once a divorce is settled, many people would prefer not to see a lawyer again for a long time. However, we never know what the future holds. A delay in making important updates could leave your family fighting your ex in court after you're gone or unable to speak for yourself.
Handling Current and New Trusts
There are a variety of trusts that you and your spouse may have set up together. Many are set up to bequeath money to their children when they get older. Sometimes couples will set up a family trust, such as a charitable remainder trust, to help defer capital gains taxes and maximize tax deductions for contributions. These should be handled as part of the divorce settlement.
Some types of trusts are created as a result of a divorce. For example, a support trust may be set up for handling spousal and/or child support rather than an order of monthly payments.
Obviously, the more assets you have and the more estate planning documents you already have in place, the more complicated this process can be. However, it's essential to get sound financial and legal advice to help ensure that your new estate plan doesn't violate any of the terms of your divorce and that your children's and your financial well-being is protected.
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