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Divorce and estate planning

On Behalf of | Mar 15, 2016 | Divorce

Divorce has become a common event in Virginia and across the United States. Divorce can be overwhelming considering that couples must figure out a way to divide all their property and debts and figure out shared parenting arrangements among other relevant decisions. Many people forget to include their estate plan in their divorce, but it is a necessary consideration in the divorce process.

One of the first things a divorcing spouse should do is to revise their old will. He or she might want to destroy any existing physical copies of the will and create a new one. It is important to include a plan for what will happen regarding guardianship for any children in case one or both parents pass away. Divorce decrees are supposed to cover this topic, but there have been cases where the wishes of one parent were not honored after their death.

The next step a person going through a divorce should take is to update any beneficiaries by going through life insurance policies, bank accounts and any other financial accounts that pass outside a will. Usually this involves requesting and sending in a form for each financial institution. The divorcing spouse should then request confirmation of any changes in writing.

Trusts may also be used to shield assets from creditors and set aside funds for children. Life insurance can also be set up in a charitable trust, which can help reduce estate taxes.

Finally, someone going through a divorce should not to assume that a divorce decree covers everything. A divorce decree typically provides for division of property and child custody arrangements. It is still important to go through estate planning documents like a will and life insurance policies and update them to make sure they do not leave everything to an ex-spouse. An attorney may be able to help someone going through a divorce update the necessary documents to avoid such a situation.