Most marriages don’t start off with the end goal of divorce in mind. Unfortunately, nearly 1/2 of all marriages end in divorce. Divorce is a prevalent aspect of the American lifestyle and it can create major problems for your estate plan. Fortunately, fixing those problems is fairly easy with the help of an estate planning attorney.
Three important things to consider during and after a divorce:
Many married couples designate their spouse as the primary beneficiary and trustee or executor of their Wills and/or Trusts. After a divorce, it is important you revisit these documents. Some states may automatically disqualify an ex-spouse as a beneficiary. However, there remains risk that the ex-spouse may contest the will or other non-probate transfers. Such contest would potentially cost your estate a significant amount of legal fees.
Additionally, if you did not have an estate plan in place before your divorce, you may want to consider creating a will or trust now. These tools can help shield your assets from going to your ex-spouse if you have minor children with your ex.
Powers of Attorney.
This legal tool gives someone the authority to act on your behalf if you cannot. As with executor and trustee designations, many married couples name their spouse as the primary agent on these documents.
Updating these documents will avoid the issue of your ex-spouse stepping into your shoes and handling your financial affairs or medical decisions after a divorce.
You can transfer life insurance, 401(k), IRAs, bank accounts, car titles, and real property outside of the probate process in Missouri. You may have heard of this legal mechanism as beneficiary designations or transfer/pay on death designations (TOD/POD). (see more about beneficiary designations here)
Missouri law automatically revokes this designation on the date of dissolution or annulment. (see, Chapter 461.051 RSMo). While this law will work to eliminate your ex-spouse as a beneficiary, the next beneficiary in line may not always be clear if the documents are not updated. This could mean those assets end up in probate. Or worse, if you have minor children, it could mean your ex becomes the custodian of those accounts.
Note, some clients may want to keep their now ex-spouse as a primary beneficiary (i.e. for life insurance where the court has ordered the spouse maintains life insurance for the benefit of the minor children). In these cases, you should re-accomplish the beneficiary designation forms AFTER the divorce is finalized. Always consult your attorney if you’re not sure what to do.
Managing the emotional and financial stress of a divorce can be overwhelming. Creating clarity in your estate plan, safeguarding your family from legal issues down the road, and obtaining peace of mind that your affairs are in order shouldn’t be. Request a consult with Welch Law when you’re ready to start.