A divorce, whether acrimonious or amicable, is an emotionally and, oftentimes, financially devastating life event.
A Separation Agreement or final Decree of Divorce stipulates division of assets, child custody, visitation and support and alimony payments. However, there are other things you need to do to prevent your ex-spouse creating further financial difficulties or receiving assets if you die.
If you have minor children, a Last Will and Testament or a Living Trust is essential. These legal documents permit you to appoint a Guardian to raise your children and a Trustee to distribute your estate. If you do not have a valid Will or Living Trust, your ex-spouse (or someone else you do not want) may receive custody of your children and acquire your assets.
A Health Care Power of Attorney may be another critical document. A Health Care Power of Attorney allows a person of your choosing to make decisions on your behalf should you become incapacitated and unable to form your own decisions.
Numerous other details, which may seem trivial, must be looked after; otherwise, the consequences may not be quite so minor. If you and your ex-spouse have joint bank or investment accounts, these must be put into your name only or he or she can withdraw money or automatically receive the proceeds should you die.
Life insurance policies, pension plans, 401k plans or any type of asset that has trustee and/or beneficiary designations need to be reviewed and your ex-spouse’s name replaced, if necessary. If you want your children to be beneficiaries, you can appoint a trustee to manage the assets until they reach the age of majority.
Be aware a Last Will and Testament is not legally binding on beneficiary designations and accounts with joint names. This means, you must change the beneficiary clauses and accounts to ensure your ex-spouse has no entitlement to these assets.
An ex-spouse can run up expenses on credit cards and utility accounts held in joint names and you are equally responsible for his or her debts. Cancel or delete his or her name from these accounts immediately to protect yourself.
If you need legal advice about estate planning after a divorce, please contact us. One of our knowledgeable estate planning attorneys will assist you.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.