Estate Planning During a Divorce: 4 Key Considerations
Wondering how your divorce will affect your estate planning efforts? If you have a plan in place or have been meaning to get started with your plan, how will your assets be affected when splitting up your marital funds and property?
Divorce is a complex and emotionally charged process that involves dividing assets and property. This can make estate planning during a divorce especially challenging. When a marriage is coming to an end, both parties may have different goals and needs.
Let’s explore four key considerations when planning your estate amid a divorce and how estate planning attorneys can help. Get started on your estate plan by contacting Safe Harbor Estate Law in Saint Paul today.
4 Things You Need to Consider When Estate Planning During a Divorce
1. Update Your Beneficiaries
One of the most important things to do during a divorce is to update your beneficiary designations. You will need to make changes if you have named your former spouse as a beneficiary on your retirement accounts, life insurance policies, or other assets.
It is important to ensure that your assets are distributed according to your wishes rather than defaulting to your ex-spouse. However, you should talk to an estate planning attorney before considering something like putting your beneficiary designations on all accounts.
2. Consider a Trust
Divorces can often be contentious, and your ex-spouse may contest your estate plan. To avoid this, you may want to consider setting up a trust.
Unlike a will, a trust allows you to control how your assets are distributed after your death without the need for probate. This can help ensure that your assets are distributed according to your wishes and that your ex-spouse does not interfere.
It can be difficult to determine if you need a will or need a trust. A Minnesota estate planning attorney can help.
3. Review Your Will and Power of Attorney
Reviewing your Last Will and Testament and your power of attorney during a divorce is crucial. If you have named your ex-spouse as the executor of your will or your power of attorney, you must make changes.
You may also want to consider updating your will to reflect your new circumstances, such as naming new guardians for your children or changing the distribution of your assets.
4. Understand Tax Implications
Divorce can have significant tax implications, especially regarding estate planning. It is important to understand how your assets will be taxed and to work with a financial advisor or tax professional to minimize the tax burden on your estate.
Headed for Divorce and Concerned About Your Estate Plan? Minnesota Estate Planning Attorneys Can Help!
Estate planning during a divorce can be complex, but it is essential to ensure that your assets are distributed according to your wishes. By taking the steps outlined in this article, you can protect your assets and provide for your loved ones when you pass away.
Don’t wait to update your estate plan. Contact us today at Safe Harbor Estate Law to ensure your plan reflects your wishes.
FAQ: Estate Planning During a Divorce
What happens if I don’t update my beneficiaries?
If you don’t update your beneficiaries, your assets may be distributed to your ex-spouse or their heirs rather than the people you intended.
Can I create a new estate plan during a divorce, or must I wait until it is finalized?
You can create a new estate plan during a divorce, but it is important to remember that any changes you make to your estate plan may be subject to revision if your divorce settlement is modified.
How does a prenuptial or postnuptial agreement affect my estate plan during a divorce?
A prenuptial or postnuptial agreement can affect your estate plan during a divorce by specifying how assets are divided. It is important to review your prenuptial or postnuptial agreement and revise your estate plan accordingly.
What happens to my estate plan if I remarry after a divorce?
If you remarry after a divorce, it is important to revise your estate plan to reflect your new circumstances and wishes. This may involve updating beneficiaries, creating new trusts, and revising your will and power of attorney.
How can I ensure that my children are provided for after a divorce?
To ensure that your children are provided for after a divorce, you can create a trust or designate a guardian to care for them. It is important to work with an experienced estate planning attorney to create an estate plan that meets your specific needs and goals.