It is said, and there is evidence to back it up, that 50% of all marriages in the United States will end in divorce or separation. Those are not great odds. It gets worse for those who have another go at it; 60% of second marriages end in divorce. Ready for the terrible news? Seventy-three percent of all third marriages end in divorce! So, if you have recently gone through a divorce or are contemplating it, it’s clear you’re in good company. It can be distressing, depressing, and traumatic, and you probably don’t want to hear this, but this is the time to think about your estate plan. If you don’t want to deal with it; I understand. However, I strongly advise my clients to schedule an appointment to see me so we can update their will, trust, living will, power of attorney, and other relevant documents if they find themselves in this situation. Don’t risk the consequences of not updating your estate plan; take the step now to protect your hard-earned assets and loved ones. The following are some estate planning tips for those who have recently gone through a divorce or are contemplating one.
Tips #1 & #2
Estate planning tips when you divorce and have minor children
My estate planning tip #1 is that when you divorce, it may be wise to nominate a third party as guardian or trustee of the child’s estate. Why? Unless a guardian or trustee is named, the former spouse, as the surviving parent, will become the guardian of the child’s estate and any inherited assets.
My estate planning tip #2: when you have divorced, and there are minor children – re-evaluate the appropriateness of the alternate guardian and trustee nominated in the existing will. For instance, if that is a relative of your former spouse, they may not ensure that the child has ample time with your family members should you die unexpectedly.
Tip #3
Estate planning tip when you divorce and you have jointly held assets with your spouse.
As a newly divorced individual, you should obtain new deeds, titles, or registration for assets no longer jointly held. Examples include real estate, stocks and bonds, vehicles, joint bank, and brokerage accounts. This includes those designated Transfer on Death [TOD] or Payable on Death [POD]). This will make sure your former spouse is not the surviving beneficiary of these assets.
Tip #4
Estate planning tip when you divorce and your former spouse is the named primary beneficiary.
Typically, a former spouse is named the primary beneficiary for life insurance policies, annuities, revocable trusts, and other similar arrangements. These designations should be updated if the Decree of Divorce or Dissolution permits such changes.
In summary, when you divorce, you should view it as an excellent time to review your estate plan and make necessary updates. Ohio, like most states, has laws that address some estate planning issues following a divorce. For example, Ohio law provides that if a person who executes a will reaches a settlement of property rights following a divorce, annulment, or separation, “any disposition or appointment of property made by the will to the former spouse…shall be revoked.” This largely eliminates the possibility that the former spouse will inadvertently receive benefits under the will. Still, it’s wise to take the opportunity to review your estate plan and make all the necessary updates following your divorce or dissolution.
A divorce or dissolution can be stressful, time-consuming, and complicated. You want to move on. I understand, but if you don’t take the time after your divorce to make the necessary updates to your estate plan, you might regret that decision later. Or your heirs will. Feel free to call me at 513-399-7526 or visit my website, www.davidlefton.com to schedule a consultation.