Q&A: Planning Your Estate During Divorce
I am planning on filing for a divorce. Is there anything concerning my estate that I should change prior to filing?
Yes. When you’re planning your estate during divorce there are certain items that, despite changing your will or trust, the beneficiary will remain the same. For example, your life insurance policy and 401k beneficiaries will remain as they are on the policy.
Once you file a divorce, you cannot amend any beneficiaries on these types of accounts without the other party’s permission. Thus, if you are anticipating filing for a divorce, you should change those beneficiaries prior to the filing.
If you don’t, and something were to happen to you during the pending divorce, your spouse could get everything in the accounts, which you probably want to avoid.
I do not have a will or a trust, should I get one if I am planning to file for divorce?
Absolutely. You can do this prior to filing or at any time during the dissolution process.
You want to ensure that your assets are being left for those you choose, not to your spouse. Your spouse will still be entitled to their half of the community portion, but you do not want to leave everything to that person.
Create a new will or trust to ensure that either your children or other family/friends are receiving the other 50% of your property, as you choose.
I already have a will or a trust. Do I need a new one?
This depends. You may be able to create what is called a codicil. This will allow you to amend portions of your estate plan, opposed to creating an entirely new one.
However, if there are substantial changes that need to be made, it is advised that you create a new one so that there are no issues with probate when and if something were to happen to you.
Does it matter if I have a will or trust drafted?
This is a matter of preference. The benefit of having a trust drafted is that you do not need to go through probate court. A will always has to go through probate court, and depending on how many debts you have and assets that need to be divided, the process could take several months. However, a trust is going to cost you more to have drafted by an attorney.
Additionally, a trust requires you to put anything you own into the trust. For example, your car should be titled in the trust’s name. This process may be complicated and lengthy. If you do not have many assets or debts, a will is probably the simpler way to go during the pending divorce.
Are there any other documents that I should have drafted during the divorce?
It would be a good idea to get a durable power of attorney and a healthcare power of attorney drafted or amended during the pending divorce. A durable power attorney designates who will be in charge of your finances if you were to become incapacitated.
A healthcare power of attorney designates your medical wishes and/or who will make medical decisions for you if you are unable to do so yourself. Most of the time if you have one of these, already, you will likely have your spouse listed as the person to make the decisions. If you are divorcing that person, chances are you want someone else to make the decisions. Get those documents updated as soon as possible.
Can I draft these documents myself?
There are many online forms you can use to draft these documents. However, it would be a good idea to consult with an attorney, especially if you have significant assets and/or debts.