Most of us assume marriage is a lifelong commitment. Unfortunately, about 50% of the marriages that are entered into these days end in divorce. Divorce can be a messy process for everyone, especially if there are children involved. Divorce can have a significant and lasting effect on a person’s future and the future of their estate. The impact of divorce on your estate plan is often something that is overlooked during the divorce proceedings. While more immediate matters may consume energy and attention during a divorce, it is important to make certain considerations and legal updates if you are contemplating divorce or have divorced.
The Impact Of Divorce On Your Estate Plan
As previously stated, divorce is not an uncommon occurrence. Divorce is the termination of a marriage contract between two individuals. Namely, divorce gives the two individuals the legal ability to marry other people, divides the couple’s assets, and outlines the details of the care and custody of any minor children. Following a divorce, there are numerous results that will come about, some contemplated and some less obvious.
Upon entry of a divorce decree, Utah law typically revokes nomination of your former spouse or his/her family members to act as your trustee, executor, or agent. However, if you pass away after a divorce, your former spouse will most likely become the primary guardian of your minor children. However, in rare circumstances your former spouse may not be suitable to become a primary custodian. In those cases, it is important that you have worked with your attorney to make sure that someone suitable is appointed to be your children’s guardian. If you have an estate plan that nominates a guardian in the event both you and your spouse die, after a divorce it is critical to review that plan to ensure that guardian is still your preferred nominee.
Under Utah law, in most circumstances a divorce revokes any disposition of property to your former spouse from your will or trust. However, it is important to keep in mind that if you leave your assets to your minor children outright your former spouse will likely have control over those assets. Every situation is different, and perhaps you would not want your former spouse to have control over the assets that are for your children. That is why it is important to make legal arrangements for your assets after a divorce, particularly if your children or beneficiaries are minors.
Review Your Will and Trust
It is important to note that if you do not make the appropriate changes to your estate and will, there could be several potential consequences. There are several important questions that you will need to ask yourself regarding your will and trust. You should ask yourself who is designated as the trustee of your trust, who is the executor of your will, and who is the agent under your property and health care powers of attorney. In many states, if your spouse was listed as any of these designations and you got a divorce, they would no longer qualify to be beneficiary. If you did not name a successor to your spouse, it may be that no one is designated to act as your trustee, executor, or agent. These laws differ by state. hence, it is important to check your designations, and change and update them as necessary.
Review Beneficiary Designations
In addition to reviewing your will and trust, soon after your divorce update your beneficiary designations for assets such as life insurance policies, stocks, and bonds. Utah law provides that a divorce can revoke these designations, but you should notify policy administrators and advisors of your changed marital status. You may have to leave your ex-spouse as a beneficiary for some of these assets if the divorce decree requires. You will need to look at your divorce decree and consult with your attorney to make this determination.
Do You Need A Estate Planning Attorney?
If you have recently divorced or are currently going through a difficult divorce process, it is important to consider your assets and estate. It is vital to hire an estate planning attorney in order to protect your future, your assets, and your heirs. Reach out to us at Stevenson Smith Hood Knudson to get in touch with an experienced attorney. We look forward to helping you assess your estate plan.