D.I.V.O.R.C.E And Estate Planning after Divorce

Challenges with estate planning after divorce can be hard to navigate.

I came across an article posted last September. It stated that a survey conducted by the Institute of Family Studies found that 34% of married people reported the pandemic had stressed their relationship. https://www.fox43.com/article/news/local/post-pandemic-divorces/521-8cfca196-3aec-4e47-b831-02662fa8f17d

Thus, it’s no surprise that divorce lawyers are busier than ever. However, getting a divorce is getting to be challenging during the pandemic. More courthouses have been closing, causing even uncontested divorces to drag on too long. That can spell disaster for some couples.

If you are going through or considering a divorce, like so many couples of every age are today thanks to the pandemic, one thing you’ll want to attend to sooner rather than later is updating your estate plan – if you have one.

If you don’t have an estate plan, here’s something to consider. You remain legally married until a judge signs the final divorce decree. If you pass away before the divorce is final, your spouse may still have rights to your estate.

Even if you already have an estate plan, review it during a divorce. If it still names your soon-to-be ex, it may not reflect your current wishes. Updating your plan ensures your assets go where you intend.

Estate Planning After Divorce: Actions You Can Take While A Divorce Is Pending

Before a judge signs your final divorce decree, update key legal documents. Start with your advance healthcare directive. If you don’t, your spouse may still make critical medical decisions for you.

You should also update your durable power of attorney. This prevents your spouse from controlling financial decisions if you become incapacitated. Choose someone you trust, such as an adult child, sibling, parent, CPA, or financial advisor.

Next, review your will. You can create a new one, update beneficiaries, or revoke it altogether before the divorce is final. If you die without a will during this time, your spouse may still inherit your assets.

Even after the divorce, don’t forget to remove your ex-spouse from your will. Failing to do so can create confusion, delay asset distribution, and lead to costly legal disputes.

Estate Planning Actions To Avoid During A Divorce

During a divorce, certain estate planning actions are restricted. You cannot take these steps without your spouse’s consent or a court order.

You must not move or hide money or property to limit your spouse’s share. Courts prohibit any attempt to shift assets before the divorce is final. Transferring or concealing assets can lead to serious legal penalties. This includes creating or funding new trusts, whether revocable or irrevocable.

You also cannot change non-probate transfers to redirect assets away from your spouse. This applies to accounts like IRAs, life insurance, benefit plans, and existing trusts.

If child support or spousal support is involved, additional limits apply. You cannot cash out, borrow against, cancel, or transfer funds from insurance policies. This includes life, health, disability, and auto coverage.

Take Whatever Actions You Can Now

You simply never know what may happen between now and when your divorce becomes final. So take whatever actions you can to modify your will and your estate plan. If you have questions please give us a call.

   

Looking to find an experienced estate lawyer in the Georgia area who is skilled in asset protection and estate plan preparation? Shannon Pawley is an attorney in Georgia with expertise in estate planning and asset protection. Shannon can provide assistance with creating an estate plan to include making a will and how to establish a trust properly. If you have questions about asset protection or questions about making an estate plan, reach out to Shannon and she will be glad to help answer all the estate planning questions you might have!