Tim Alles

Jordan Bush

Chris Shourds

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Previous Newsletters

April 2021 Does My Estate Plan Have An Elephant In The Room? (Part I)


March 2021 How Can I "Trust" My Trustees?


February 2021 What Do Tiger Woods' Tweets, and Your Social Media Content Have to Do with Estate Planning? (Part II)


January 2021 What Do Tiger Woods' Tweets, and Your Social Media Content Have to Do with Estate Planning? (Part I)


December 2020 What Are Estate Taxes And Why Do They Matter?


November 2020 What Life Events Should Trigger an Estate Plan Review?


October 2020 My Child Is A Spendthrift. What Can I Do To Protect Their Inheritance?


September 2020 What Is the Difference Between Estate Planning and Elder Law?


August 2020 Estate Planning After a Divorce - What Does It Mean for Your Estate Plan?


July 2020 What Should You Expect From Your Trustee?


June 2020 Should You Pass Your Assets Through A Trust Or A Will?


May 2020 Important Issues To Consider For Your Estate Plan


April 2020 Important Estate Planning Considerations During a Pandemic Crisis


Estate Planning After a Divorce
What Does It Mean for Your Estate Plan?

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What Estate Planning Documents Should I Review?

Wills

In most states, provisions you made in your will for your spouse are automatically revoked by divorce. This usually includes a spouse’s appointment as executor. It’s also true that these revocations usually do not occur until the divorce is final.

So, it may make sense to change your will after you file for divorce; but before the divorce is final. Then you can update, as necessary, after the divorce.  This may be a good strategy for all the items in this newsletter.

Areas you will want to pay attention to include:

1)      Naming a new executor for your will.

2)      Updating property distribution provisions.

3)      Guardianship for minor children. Keep in mind that where minor children are involved, you may want to change the terms of your will to provide for a trust for minor children.

Trusts

In addition to a will, many people will also have a revocable trust, sometimes called a living trust. This is where most of the estate planning from a disposition point takes place and is a document which should also be updated once divorce is in the picture.

Items to consider for updating include:

1.      Trustees

2.      Terms of distribution.

 

Durable Powers of Attorney and Health Care Powers

A power of attorney grants the person named the right to make important decisions on your behalf. These decisions can be related to healthcare, end of life wishes, and the ability to manage property. 

These documents, which usually give another person power to act for you, should also be reviewed and updated in the event of divorce. The person who you name as your power of attorney has an overriding legal obligation (known as a fiduciary duty) to make decisions that are in your best interests.

Are There Additional Financial Considerations During A Divorce?

Life Insurance

Life insurance typically passes to the beneficiary named in the life insurance policy. Unlike a will, divorce has no impact on the fact that your ex-spouse is named beneficiary. If you die, the proceeds would still be paid to your ex-spouse. In order to change this outcome, you will need to update the beneficiary designation with the insurance company.

Remember, that sometimes court orders in a divorce will limit your ability to make changes of beneficiary or ownership of life insurance policies.

Retirement Funds

Like life insurance, most retirement accounts pass by beneficiary designation.  Therefore, if you want to have a different outcome, you will need to update the beneficiaries named on all your retirement accounts.

Keep in mind that rules may be different in community property states, and different if a court has awarded some or all your retirement accounts to your ex-spouse as part of the divorce.

Other Considerations

It is important to keep in mind that with all these considerations, there may be court orders that over-ride your ability to make changes to your estate planning. Tax provisions, such as marital deductions, may be implicated and need to be reviewed as well.

All aspects of your financial situation will be impacted. That is why is very important to conduct a careful review, with your estate planning counsel, so that you obtain the best advice possible.

 

Important Information: The information contained in this newsletter, and any related web page(s), is for general information purposed, by its nature, and does not contain any legal or tax advice. It is written to be accurate and educational. This newsletter may not be construed as legal or tax advice, or solicitation for legal or tax services of any kind. For this reason, no attorney-client relationship is created, and no one should take any legal, tax or other action, based on the information contained in this newsletter or any related web page(s), until having consulted competent professional advisor(s) and attorney(s). Some links in the newsletter may lead to other places on the worldwide web, that are for informational references only. We do not necessarily sponsor, endorse or otherwise approve of the materials appearing in such sites. Nothing contained in this newsletter and any related web page(s) is intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties under the Internal Revenue Code. No information contained this newsletter and any related web page(s)relating to any federal tax matter may be used by any person to support the promotion or marketing or to recommend any federal tax matter. Taxpayer(s) should seek advice based on the taxpayer's particular circumstances from an independent tax advisor with respect to any federal tax transaction or matter described in this newsletter and any related web page(s).


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