Estate Planning Issues for Divorcing Spouses

There are many considerations when you and your spouse divorce. Divorce will divide your marital property and debts, determine custody schedules for your children, and much more. You should also always revisit your estate plan upon a divorce. While contacting an estate planning lawyer may be the last thing on your mind in this already stressful and emotional time, the following are some reasons why it may be important to do so.

Changing Beneficiaries

When property is divided between spouses, titles to homes, vehicles, and other property will most likely need to be changed. You should make sure to change all designated agents and beneficiaries, as well, since you likely designated your spouse at the time. Make sure you update beneficiaries for life insurance policies, retirement funds, and other relevant financial accounts.

Updating or Creating Your Will

Often, individuals leave most if not all of their property to their spouse if they pass away. Following a divorce, chances are you no longer want your spouse to be your primary beneficiary and you should make this update as soon as you know you are divorcing. New York law does revoke any bequests to your spouse once the divorce is final, though not before the court issues the order to dissolve the marriage. Divorces can take a long time, especially those involving substantial assets and property. If something happened to you while the divorce case was still pending, your soon-to-be-ex-spouse would still receive their share under your will. Similarly, if you pass away during the divorce process and do not have a will, your spouse will likely receive everything or a substantial part of your estate under New York intestate laws. Therefore, it is a wise time to create a will when you know a divorce is on the horizon.

Power of Attorney Designation

If you designated your spouse as a power of attorney, this designation is revoked automatically upon a divorce. It is important to decide on a new power of attorney and make the new designation as soon as possible.

Consider Establishing a Trust

If you have not established a trust, it may be a good idea post-divorce, especially if you have minor children. Since you likely want your property to go to your children, a trust allows you to have control over how and when your children will receive distributions to prevent them from receiving a windfall when they are young. You can also use a trust to provide for the care of your children should you become incapacitated. These are only some of the many benefits of establishing a trust and our attorneys can help you decide whether a trust is an appropriate option for you.

Contact a New York Estate Planning Law Firm

A divorce can be a trying time. Allow the estate planning attorneys at Goldfarb Abrandt & Salzman LLP to determine which estate plan updates are necessary under New York law. If you would like to discuss your specific situation, call us at (212) 387-8400 or contact us online for more information today.