For couples facing a divorce, it’s clear that estate-planning documents with bequests to a soon-to-be former spouse will need to be updated. However, the interplay between family and estate law is much deeper.
For couples with children, the existing estate documents may have left all property, including life insurance designations, to the other parent. The assumption may have been that the other parent would provide for the children. After a divorce, however, a parent may want to expressly designate certain dispositions. Divorcing parents may also want to designate a guardian for minor children, rather than leaving custody to the other spouse in the event of their death or incapacity.
Our law firm might recommend setting up a trust to provide for the children. The distributions could be up to the discretion of a designated trustee, pursuant to the guidelines of the trust document. A trust will also ensure that remarriage won’t affect the intended transfers to children from a first marriage.
Even individuals without children can benefit from revising their estate plans during a divorce. For starters, an individual’s finances may be reduced from a dual-income household to a single income, without the corresponding economy of shared costs. Contributions to retirement accounts may need to be adjusted until an individual’s finances and expenses have stabilized after the divorce.
As this discussion suggests, there is much more to a divorce than decisions about property division or child custody and support. As an individual prepares for a new chapter in his or her life, many corollary issues might arise. A law firm that focuses on both family and estate law can help to ease that transition.
Source: Forbes, “Easing The Financial Impact Of Divorce In Retirement,” Juliette Fairley, Jan. 22, 2016
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