Clients coming to you for estate planning who are recently divorced should be aware of some landmines to insure that their estate plans end up in the hands of intended beneficiaries.
- Update life insurance and retirement plan beneficiary designations.
- If client has minor children, make sure guardians of estate are nominated.
- If a revocable trust has been established with ex-spouse, make sure it is revoked and trust property is re-transferred to parties awarded property in the divorce.
- If there is joint property, should it be severed?
- Update your advance health care directive and power of attorney for property management
- If remarrying is contemplated, is a premarital agreement in order so that you may leave property to children from your previous marriage in amounts that you desire?
- Now that you are single is the tax planning involved in your prior estate plan still appropriate?
Be very careful if your client has not finished the divorce process. There are automatic restraining orders that become effective for all divorcing parties and include prohibitions on revoking or modifying estate plans until the divorce is final. The intent with Automatic Temporary Restraining Orders (“ARTOS”) is to maintain the status quo of assets and ownership interests until the division of assets is complete.
Hope this helps!