It is a common scenario couples find themselves in – you and your spouse create an estate plan leaving everything to each other and then to your minor children. A few years pass and you wind up getting a divorce. You begin to wonder if your estate plan is still valid post-divorce. The answer is yes, your plan remains valid. However, you need to take proactive steps to update your estate plan to ensure your assets are protected for the benefit of your children.
How Divorce Effects a Last Will and Testament
In Missouri, when a divorce is finalized, any provisions in your Will pertaining to your ex-spouse are effectively nullified and your ex-spouse is treated as if they predeceased you. This means that alternate beneficiaries will inherit the assets designated for your ex-spouse. Sounds simple, right? Well, if your children are minors, all of your assets will actually end up in probate if you pass away. Probate takes a significant amount of time and requires expending significant funds to complete. You can avoid this situation by creating or updating a testamentary trust or a living trust.
Durable Power of Attorney for Health and Finances
Someone with a detailed estate plan typically has at least two separate power-of-attorney documents. One for health decisions and at least one for financial affairs. If your ex-spouse remains designated as your attorney-in-fact and you suddenly become incapacitated, your ex-spouse could remain empowered to make health and financial decisions on your behalf. This is why you need to immediately take action to update these documents.
Life Insurance and Payable-On-Death Accounts
Life insurance and payable-on-death accounts (POD) also need to be updated to stipulate that your ex-spouse is no longer the beneficiary. Many people forget to do this and the ex-spouse ends up with a windfall, which could create turmoil and dismay with your children and other beneficiaries. You could utilize a trust where the proceeds of your life insurance would go directly into the trust upon your death for the benefit of your named beneficiaries.
Update or Establish a Revocable Trust
If you have a revocable living trust, update the document to ensure there are not any situations where your ex-spouse could become a trustee or a beneficiary. In Missouri, if you and your spouse have a joint trust (often in the form of a Qualified Spousal Trust), you will need to create a new separate trust and update beneficiary designations. If you have an irrevocable trust, you generally cannot alter it. That means your ex-spouse will remain as a beneficiary, if so stipulated in the irrevocable trust. There are certain steps you could take to try and modify the irrevocable trust, but the appropriate modification method depends on a multitude of factors, including trust agreement terms, length of irrevocability, identity of current and remainder beneficiaries, and governing state law.
Update or Include Guardian Provisions for Minor Children
If you have minor children, be sure to name a guardian, or guardians, in your Will. Your children’s other parent will, of course, become their sole guardian if they survive you, but at least you will have designated a trusted individual to provide for the children’s care if your ex-spouse pre-deceases you or passes away after you.
How To Protect Your Estate Plan Post-Divorce
If your marital status has recently changed, contact St. Charles trust and estate planning law firm, Polaris Law Group. Polaris Law Group takes pride in offering an effective, full-service experience to our clients. If you want to ensure that you and your family is properly cared for, contact Polaris Law Group’s experienced trust and estate attorneys, Scott Stork and Raymond Chandler today. Scott and Raymond are seasoned estate planning attorneys and are members of the National Network of Estate Planning Attorneys, the National Academy of Elder Law Attorneys, and Elder Counsel. Schedule a meeting by phone or by filling out a quick contact form today.