How Divorce Complicates Estate Planning
Will divorce affect your estate plan? It may, and in ways you probably never considered. Accordingly, this post discusses one of of the more common—and commonly overlooked—reasons why it is beneficial to consult an estate planning attorney during a divorce: the need for flexibility.
As background, a property or marital settlement agreement is executed in the event of a divorce so that both parties understand their obligations to one another. However, divorce agreements are often finalized without much consideration for their effect upon estate plans. Consulting an attorney can help protect your rights.
Specifically, consider the example of a divorce involving children. The divorce agreement may require both parents to maintain life insurance. This is to guarantee full child support payments in the event of either parent’s death. However, if one parent were to die, the beneficiary designations may be unclear and funds could be allocated improperly. An experienced and knowledgeable attorney who focuses on estate planning can work with you to ensure that your funds are dispersed to the correct beneficiaries, for the correct uses.
In addition, a divorce court is generally not in privity with a third party contract, such as a life insurance policy, which means it lacks the authority to bind the third party. An attorney can work to ensure that the aims of the divorce agreement are effectuated in any outside contracts held by an individual.
Our law firm has extensive experience in helping clients going through a divorce to update their estate plans. Our team can help ensure that you have the flexibility necessary to accommodate any unforeseen life events and that your estate will be protected.
Source: National Law Review, “How Divorce Can Impact Your Estate Plan,” Catherine F. Schott Murray, May 19, 2016