The divorce process can be long and expensive. However, the work does not end once the divorce decree is signed. Visiting another lawyer’s office may be the last thing you want to do, but we can help simplify the process for you.
In order to ensure that your assets and estate planning wishes are carried out in light of this major life change, there are three things you must do as soon as possible.
- Change Beneficiary Designations on Life Insurance;
- Change Beneficiary Designation on Retirement Plans;
- Create or Revise your Estate Plan.
If you and your former spouse had a joint trust, you will need to have your own individual trust created to hold the assets that are now in your name only. In this new plan, you will need to think about who to name as the trustee and beneficiary. If you have minor children, you may also need to consider who is going to be the individual to manage those assets on behalf of your children. In many cases, you probably don’t want your ex-spouse in these roles. If you do not have any estate planning documents in place, now is the perfect time to get everything in order.
How a Trust Can Protect Your Children’s Inheritance after a Divorce
A trust protects your children’s inheritance in a few distinct ways:
- Since you select the Trustee, you can choose someone other than your ex-spouse to manage the assets. In fact, you can even state that the ex-spouse can never be a Trustee, if you wish.
- Since you select the Beneficiaries, you can determine how the trust assets can be used for them. You may have long-term goals for your beneficiaries, such as college, purchasing of a first home, or starting a business. When you share your intent, your Trustee can invest the assets appropriately and ensure your legacy is used the way you want, rather than the assets being potentially wasted or used in a thoughtless way.
- A fully funded trust avoids probate, so your children do not have to deal with the cost, publicity, and delay that is all-too-common in probate cases. Although “plain” beneficiary designations, like the one that Beth used, also avoid probate, they may still open the door for a guardianship or conservatorship court case, especially when your children are minors. A fully funded trust avoids these guardianship and conservatorship cases. This means more money for your intended beneficiaries and less for the lawyers and courts.
Your estate plan is more than just a trust however. It can include documents such as a Financial Power of Attorney and Healthcare Directive and Power of Attorney. Whether you have them already or need to have ones executed, this is a crucial time to review them. Chances are you no longer want your ex-spouse to have the authority to sign documents on your behalf or make medical decisions for you. To avoid confusion by third parties as to who should be acting on your behalf, make sure to call us so we can update these essential documents.
Divorce can be a long process. We can help you cross the finish line. As you take those next steps into your new life, call us, so we can make sure that you cross the finish line with documents that are able to carry you and your wishes forward.