One of the questions that I always ask clients as they prepare for a divorce is whether or not he or she has a Will in place. Many will tell me no, and that their reason for never having had one drafted is that they do not own enough property to justify going through with the process. However, a divorce is the perfect time to begin thinking about getting a will in place once your divorce is finalized.
Questions that may arise during your divorce
This past year I had a client who was going through a divorce until her spouse suddenly passed away without much warning. Obviously she and her entire family was shocked and saddened by this having occurred. Once the initial shock wore off there were some relevant questions that were asked regarding their estate and its affect on our client.
For instance, since the deceased spouse did not have a will in place the laws of intestacy apply according to the State of Texas. Our client had questions about what rights she had as a surviving spouse. To answer those questions she needed to look at the Probate Code in order to make those determinations.
For the most part, until a judgement is issued in the divorce you will have the ability to inherit property from your deceased spouse if there was a will in place. The probate laws in the State of Texas would come into play in situations where there is no will.
Tips for preparing and administering a new will as a result of a divorce
If you have a will already in place at the beginning of your divorce be sure to notify your attorney. In this way he or she can review the will with you and point out portions that may need to be amended upon the conclusion of your divorce. Depending on the court/county that you are in you may be barred from making those amendments during the course of your divorce.
If there are no prohibitions in your standing or temporary orders against changing beneficiaries on life insurance policies and Wills, your attorney may speak to you about removing your soon to be ex spouse as a person who can inherit property or assets from you. Some family law attorneys can draft a new will for you while others will recommend that you go to the attorney who drafted the first version in order to update it for you.
Your updated may remove your current spouse and insert your children as recipients of the majority of your property should you pass away. This may ultimately be your goal but keep in mind that if your children are under the age of 18 you may not want them to gain access to a large sum of money or valuable real estate. A solution would be to create a trust for them that will hold the property until they reach whatever age you choose in order to receive the property. Many people will choose an age beyond even college, such as 25, in order to allow your children a chance to complete their degrees and settle into “adult” life.
An issue that my wife and I actually just tackled in drafting wills is what will happen to your children should you and your spouse pass away unexpectedly before your children reach adulthood. Choosing guardians for your children is an extremely important decision, obviously, and one you should give some thought to. Once you have selected a person or couple of persons, you should speak to them about your intentions. Assuming that they voice a willingness to accept this designation you should ensure that provisions are included to care for your children in those circumstances.
Estate planning after the divorce
Jumping ahead to the time period immediately after your divorce has concluded, your new Will should absolutely be completed by this stage that covers the issues regarding property and children that we discussed in the prior section of this blog post. Now that your divorce has concluded you know exactly what portion of your community estate that you are walking away with so you can allocate those pieces of property if you so choose in your updated Will.
Life insurance policies, retirement accounts and the like should all be updated to reflect new beneficiaries. In conjunction with your divorce make sure that your attorney has drafted, filed and submitted a completed Qualified Domestic Relations Order (QDRO) to the plan administrator for your ex-spouse’s retirement plan in order so that you can receive any benefits under that plan that you are entitled to as a result of your divorce.
What to do about life insurance?
As a result of your divorce, you may be obligated to take out a term life insurance policy on yourself, naming your ex-spouse as a beneficiary. This is done in order to make sure that your ex-spouse has a way of re-creating the income that he or she should have received in the way of child support and/or spousal maintenance. Depending on the length of the term that you insure for you may be able to reduce the level of coverage throughout the years as your child support obligation decreases. The shorter the term, the more your rates tend to be, however.
The sort of coverage that is appropriate for your circumstances is not something necessarily that your attorney can answer. While most family law attorneys have some degree of experience in helping clients plan for life insurance needs post divorce your best bet is to speak to an insurance broker who can shop around multiple providers in order to secure you the best rate.
Consider as an example a 50 year old person who has a very young child. It would be unwise for this person to purchase a ten year term life insurance policy because the obligation to pay support stretches beyond ten years. Writing into your divorce decree a provision that you will purchase a new policy at the expiration of the ten year term would not be enforceable as there is no guarantee that you will be approved for another term policy at the conclusion of ten years.
Concluding thoughts on estate planning and divorce
While estate planning may be the furthest thing from your mind at the outset of your divorce it is still a very important subject that you will need to focus on sooner rather than later. Consider that everything you will be fighting for in your divorce: your children, your home, business and property are all relevant portions of any estate plan. It is best to cover your bases during and immediately after your divorce rather than to wait to do so until later. The last thing you want is to push off doing so only to find that something happens in the meantime that has left you unprepared.
If you can prepare ahead of meeting with attorneys for your divorce you can advise your representative about what your post-divorce goals are as far as financial and estate planning. Your family law attorney can help you to achieve the immediate goals that you have set for yourself and lead you in the right direction towards those that can assist you in estate planning matters. Ultimately you can chart your estate planning destiny with much more certainty than you can your divorce. The decision that you have to make is what you want to do, how you want to do it and who should help you achieve those goals.
Questions about divorce and estate planning? Contact the Law Office of Bryan Fagan
The attorneys with the Law Office of Bryan Fagan, PLLC want to thank you for taking the time to read these blog posts on the subject of estate planning and divorce. If you have any questions on these subjects or any other in family law please do not hesitate to contact our office today. We offer free of charge consultations with one of our licensed family law attorneys. Learning more about your circumstances and how they can impact a family law case is only a phone call away.