Estate Planning and How It is Used in Divorces
Divorce is the outcome of a failed marriage. The dissolving of a marital partnership should also involve both divorcing spouses estate plan during the divorce and post-divorce. In most cases, a divorcing spouse is not legally removed from receiving financial benefits under their other divorcing spouse’s Last Will and Testament or Trust while the divorce is pending. This can result in your spouse receiving part or all of your probate assets if you die during the divorce which we have unfortunately witnessed before. The Law Offices of Matthew Z. Martell can assist you with preparing new estate planning documents before or during your divorce which enforcing your current wishes.
Estate Planning Before A Divorce
First, a spouse should never just assume the contents of their probate estate will go automatically to their spouse once they are deceased. If your wishes are not expressed correctly, then it creates an opening for another family member to contest the validity of your will and/or trust.
Secondly, a divorce forces both spouses to eventually decide where their respective assets will go when they are dead. If you wait until the divorce is filed, then you are limited in what can be changed in your overall estate plan. For example, in the 12th Judicial Circuit (Sarasota, Manatee, and Desoto Counties), you cannot change your beneficiaries on your life insurance, bank accounts, stock brokerage accounts, etc. after the divorce is filed. You can still revoke your prior estate planning documents in order to create a new will, trust, Durable Power of Attorney, Designation of Health Care Surrogate, HIPAA Release, Declaration of Pre-Need Guardian, and Living Will. However, that may change in the future. So, the best practice is to also complete a new estate plan before the divorce is filed. That way, you can designate exactly who gets your half of their marital estate if you die during divorce.
Estate Planning After the Divorce has Been Filed
Married couples normally plan for their future. Often, one party will be named as the sole beneficiary of the other spouse’s estate. But if divorce is occurring, a divorcing person may ask: does divorce invalidate my will?
Generally, former spouses do not gain control of a former spouse’s estate unless the certain assets are still jointly titled after the divorce, are payable and/or transfer directly upon death, and are classified as being outside of your probate estate. If you are concerned about things such as your life insurance, IRAs, and 401Ks, then you should have your former spouse’s name legally removed immediately after the divorce is finalized.
In regard to your Will, after the Final Judgment of Divorce has been entered, then a Will which lists your former spouse as a beneficiary of your estate and the Personal Representative of your estate would be invalidated as to these designations. However, as discussed above, if the divorce is still pending and not completed, then your soon-to-be ex-spouse would still receive anything and everything you left her or him pursuant to your Will and/or Trust. That is why it very is important to update your complete estate plan during your divorce if you were not able to do so prior to the divorce being filed.
In Sarasota, Manatee, and Desoto Counties, you cannot change your beneficiaries on your life insurance, bank accounts, stock brokerage accounts, etc. after the divorce is filed. However, you can still revoke your prior estate planning documents in order to create a new will, trust, Durable Power of Attorney, Designation of Health Care Surrogate, HIPAA Release, Declaration of Pre-Need Guardian, and Living Will. It is highly advisable to do so because you don’t want a person who is divorcing you controlling your finances, important health decisions, and legal matters if you are sick, legally incapacitated, or dying. Additionally, most people want to disinherit the person they are divorcing.
A will is a legal document that upholds a person’s wishes in regard to the distribution of their assets. First, be advised that your final wishes may not be honored if the original will is not filed with the Clerk of Courts in county of your legal residence immediately after your death. As a result, family members might be forced to spend additional time and money settling your legal affairs upon your death if the will is lost or destroyed. Therefore, it is important that you choose a Personal Representative that you can trust to follow your dying wishes, give that person a copy of your Will, let that person know the location of your original Will, and arrange for that person to have immediate access to your original Will upon your death. However, it is advisable to have more than just a Last Will and Testament primary in order to attempt to avoid probate.
A Will that is created shortly before your divorce or during your divorce can be used to disinherit the spouse who is divorcing you, or who you are divorcing. It can also be used to fund your trust after death. This is the primary way new Wills are used in divorces.
A trusted divorce lawyer near you in Sarasota, Bradenton, and Venice, Florida who also does estate planning like Attorney Matthew Martell will advise clients to create a revocable trust because it helps them to avoid probate and also allows them some more flexibility and control of their assets after death. The client Grantor and the client Trustee has complete control of their possessions of their Trust during their lifetime. The client Trustee is normally the sole primary beneficiary of this Trust if it is created shortly before or during the divorce. The client Trustee can add or subtract assets from this Trust during their lifetime since trust assets can be transferred at any time during the client’s life. The client Trustee can also add or change contingent (secondary) beneficiaries of this Trust during his or her lifetime. The assets contained in the trust become irrevocable upon the client Trustee’s death. The beneficiary designations of this Trust also become irrevocable upon the client Trustee and primary beneficiary’s death.
A Trust that is created shortly before your divorce or during your divorce can be used to disinherit the spouse who is divorcing you, or who you are divorcing. It can also be used to fund your trust with assets acquired in your name only post-date of filing the divorce which are clearly your separate and non-marital assets. This is the primary way new Trust are used in divorces.
Assets With Beneficiary Designation
An individual can use beneficiary designation to transfer assets directly to another person without delay immediately after his or her death. All such transfers are final, regardless of the terms of that person’s Will or Trust since these transfers are considered to occur outside of the probate estate. Often, these designations are used for retirement accounts, life insurance policies, and sometimes bank accounts. The client should review these beneficiary designations periodically.
Before a divorce, it is normally a good idea to change any Payable on Death (P.O.D.) beneficiary designations from the spouse who you are planning on divorcing, or who is planning to divorce you, to someone else like your children in equal shares or your parents in equal shares. You can also get rid of your term life insurance. After the divorce has been filed, you are legally prohibited from changing any such beneficiary designations or letting your life insurance lapse. But after the Final Judgment of Dissolution of Marriage has been entered, and your divorce has been finalized, you can then proceed to change your P.O.D. beneficiary designations unless you are legally prohibited from doing so– such as with term life insurance ordered to be keep to secure child support or alimony.
Postnuptial Agreements in Florida
A Florida postnuptial agreement is a legal, binding document between married spouses. It will detail how the married couple will divide the joint and/or separate non-marital assets should they decide to separate or divorce. Any current financial arrangement in the marriage can continue, or it could be modified. But both parties must clearly agree to the post-separation and post-divorce financial arrangement after full financial disclosure in writing of both parties assets and liabilities. Also, the postnuptial agreement needs to be executed freely, voluntarily, and not under coercion or duress.
Postnuptial agreements are very rare. Chances are that your spouse will not sign one if you are having marital problems and are contemplating a divorce. Also, if the divorce has been filed, then it is too late to utilize a post-nuptial agreement.
How A Sarasota, Bradenton, Lakewood Ranch, and Venice, Florida Divorce Attorney Can Help
A highly experienced divorce attorney near you can be helpful with helping you with your estate planning during the divorce process. Specifically, Sarasota, Bradenton, Lakewood Ranch, and Venice, Florida divorce attorney Matthew Martell can also assist you with creating new wills, trusts, powers of attorney, health care designations, pre-need guardian declarations, and living wills. Attorney Martell can handle your estate planning before your divorce or during your divorce to ensure that of your final wishes are carried out.
If you are looking for a family law attorney in you in Sarasota, Bradenton, or Venice, FL, who handles divorces but also knows how to do estate planning shortly before, during, or immediately after a divorce, then contact the Law Offices of Matthew Z. Martell. We can discuss ways to take care of your current legal situation involving both divorce and estate planning. If you are serious about immediately hiring an attorney, then call us at (941) 556-7020 to schedule a Phone Consultation today.