New York Estate Planning & Elder Law Blog
Adequate estate planning is a critical part of the divorce process, but it is frequently overlooked because people are worried about navigating many other aspects of the divorce process.
Careful attention should be paid to the complex issues that arise when handling estate plans where a divorce action is either pending or has been finalized. You should continuously review and update your estate plan after separation and before filing a divorce complaint as well after filing a final decree of divorce.
To make sure that you engage in sufficient estate planning after a divorce, this article reviews some key strategies that you should make sure to review so you have the best chance possible of protecting your wishes after divorce and separation.
# 1 – Appreciate How Life Insurance Works
If you and your spouse both have life insurance, make sure that you understand both its payment terms as well as what the coverage guarantees. Whichever spouse owns the insurance policy is tasked with paying premiums and making sure the policy remains effective. Many divorce settlements address how life insurance will be handled among a divorcing couple.
# 2 – Consider Creating a Trust
A revocable living trust often addresses both the instructions as well as the requirements for paying both alimony and child support. The creator of the trust is required to fund the trust. The benefit of establishing a revocable trust means that assets can pass to beneficiaries at the time of the trust creator’s death without having to pass through probate. Besides avoiding the costs and timeliness associated with probate, revocable trusts also offer tax advantages for divorcing couples.
# 3 – Update Your Health Care Proxy
A healthcare proxy lets you name the person who will make health care for if you experience an emergency and are left unable to communicate. Unless you want your former spouse to make the decisions, you will need to appoint someone else who you can trust and who will keep a clear head through this difficult situation.
# 4 – Reconsider Guardianship
Even after a divorce, you might still decide to appoint your former spouse as the guardian in your will. If you do not appoint your former spouse to such a position, he or she will still likely serve as the guardian of your minor children if you pass away unless a court or judge decides that this person is unfit.
# 5 – Utilize an Estate Planner Throughout the Divorce Process
An estate planner can review your divorce settlement and assess whether any gaps exist. For example, a divorce settlement might leave you exposed to federal and state taxes. Other plans might fail to consider how divorce will disrupt your retirement account. Divorce lawyers have a different focus and commonly overlook critical estate planning issues.
Contact a Skilled Estate Planning Lawyer
With the proper planning, estate plans can be written so they satisfy each of your unique estate planning goals. It can be challenging to decide what estate plan works best for you, though. If you need the assistance of an experienced estate planning lawyer, contact Ettinger Law Firm today for assistance.