5 Questions Answered About Divorce and Estate Planning
In a recent podcast, Kate Reese had the opportunity to speak to a colleague about estate planning and divorce. Andrea Weiss Bryk is an Estate Planning and Administration attorney focused on families, veterans and members of law enforcement. Kate and Andrea reviewed some of the essentials about estate planning, and Andrea raised important reasons that a divorce in Virginia is a life change that should prompt preparation or review of your estate plan.
1. What is important about an Estate Plan?
An estate plan looks at the big picture, allowing you to make decisions about how your assets and your person will be handled when a life change like death or incapacity occurs. At these moments of crisis, you need a trusted person ready to step in and take care of your affairs. Without a plan, and enforceable legal documents, existing state laws of intestacy (meaning “without a will”), will determine how, when and to whom your belongings pass. Beyond the basic question of who will inherit your assets, additional elements of an estate plan allow you to designate key people to make medical decisions, manage your estate and make sure that your wishes are carried out.
2. What Are Essential Documents in an Estate Plan
While it is generally known that an estate plan involves the preparation of a will, several other documents should be included in your estate plan. First, a financial power of attorney permits you to prepare for incapacity or any time of need, ensuring your bills can get paid and your money and household can be managed without having to apply to the court for a conservatorship. Next, you should consider the preparation of medical directives, including a healthcare power of attorney and a living will so that you decide how medical and end of life decisions are made when you are unable to make them yourself. Finally, people who own any type of assets in Virginia, creating a revocable living trust is an important part of your estate plan to manage a timely, smooth, private, appropriate distribution of your assets on your preferred terms.
3. What Happens to Your Existing Estate Plan in a Divorce?
Just like marriages often involve joint ownership of real estate, investment and bank accounts and other assets, many couples take the important step of drawing up estate planning documents that fit their martial situation. This usually includes designating one another as the heir/beneficiary and decision maker. The divorce process does not void these documents, and like the administrative process of separating and allocating joint marital property, the estate plan requires revision to make changes to how and to whom decision-making and belongings pass and to eliminate the former spouse from receiving.
4. When Should a New Estate Plan be Made?
Your family law attorney should prompt you to look for and review your estate plan documents in preparation for your divorce. There may be designations in powers of attorney for finances and health care that you want to change immediately, particularly in the case of an acrimonious divorce. Even if your situation is amicable, you should start to consider who gets and does what with your assets and your person as soon as possible. It may be a good idea to confer with an estate planning attorney to determine whether you can or should make additional changes to your plan before the divorce is finalized, and most certainly thereafter. Another important time to consider and review your estate plan is in the event of a new marriage. If you have children from a prior marriage, the laws of intestacy in Virginia might allocate your assets to them in a way that does not meet your intentions within your new marriage.
5. Who Else Is Impacted by Your Estate Plan?
In the event of a separation or divorce, each party should work with an estate planning attorney to revoke their prior plan and prepare a new plan. But the parties are not the only ones who should review their plan. Often, family members have put together an estate plan taking your spouse into account. For instance, your parents might have named your former spouse as an heir/beneficiary, or a sibling might have designated your spouse as an executor. Needless to say, post-divorce, these family members may not want to have continued ties to your former spouse, and they should amend their plan documents accordingly.
A times of major life changes like divorce, it is important to make sure that you are legally protected. If you don’t have an estate plan or you have one you crafted while married, you need to consider drawing up a new plan and the appropriate documents. At Reese law, we can review this issue with you and make an appropriate referral if warranted. Contact us today for a consultation to discuss your options.
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