Estate Planning and Divorce: What You Need to Know

It’s important to plan for the future, whether you want to save for your eventual retirement, you’re protecting personal assets against business debts, or you want to make sure your loved ones are cared for in the event of your untimely demise. Estate planning with wills, trusts, investments, and so on is just one way to reach your future goals.

If you start or continue the estate planning process when you’re married, it’s only natural to include your spouse and children (even step-children) in your plans. However, divorce can change your feelings concerning how you want to allocate your estate. Perhaps you still want to include an ex-spouse and step children to a lesser extent, or you want to cut them out completely.

How does divorce in Michigan affect your ability to alter your estate plans? Here’s what you need to know.

Last Will and Testament
Divorce can change your priorities, especially when it comes to how you want to arrange your estate plan. One of the first things you may want to do once you start divorce proceedings is get your affairs in order, just in case.

This is easy enough to do where your will is concerned. A qualified legal professional can help you to amend your existing will, or even draft a new one if you so desire, so that you can designate new beneficiaries and assign a suitable power of attorney. There will be some expense associated with making such changes, but the peace of mind it brings you may be well worth the expense.

You should also be able to change the names of beneficiaries easily enough for existing accounts like bank accounts, retirement accounts, investment accounts, and life insurance policies by simply speaking with an appropriate representative.

Trusts
Your ability to amend existing trusts could depend largely on the type of trust structure you’ve already set up. Irrevocable trusts, for example, are designed to be difficult to amend. This is not to say it’s impossible, and in instances where the purpose of the trust is outdated (as with divorce, potentially), you can petition a court to have the terms and/or beneficiaries changed. The services of a qualified attorney will almost certainly be required in such cases.

Divorce Settlement
In Michigan, the results of divorce can have an impact on your ability to effectively control your estate plans. For instance, it is assumed that ex-spouses no longer intend to honor benefits listed in a last will and testament, so gifts to spouses through wills are automatically revoked following divorce. Of course, it’s wise to update your will anyway, so that there is no basis for contestation.

In addition, however, your divorce settlement may require that you cede certain assets to your ex-spouse as part of the division of property, and this could include all or part of retirement accounts or annuities, just for example. In this case, any legal provisions you make to the contrary through a will or trust would be superseded by the divorce settlement.

The process of divorce can be complicated, especially when it involves amending established estate plans. To ensure that your wishes are fulfilled, call the experts at The Gucciardo Law Firm today at 248-723-5190 for a consultation.