Divorce is a time- and energy-draining event. Once it is over, you are exhausted! The last thing you think about is how your estate plan should change to reflect the divorce. However, on that issue, I have good news and bad news.
The Good:
In Florida and many other states, if your divorce is final, your Will, which names your ex-spouse as beneficiary and executor, will be construed as if your ex-spouse died before you. That’s the good news!!
However, there is bad news on a few fronts.
The Bad:
Some of your assets may pass outside of your estate and may still end up with your spouse. For example, your 401K, profit sharing plan, or IRA has a beneficiary name attached to it. It is likely that at one time, you named your ex-spouse as beneficiary. Until that is changed, should you die, your ex-spouse will likely get any assets on which he/she is named “beneficiary.” If you have “payable on death” accounts at the bank or stockbroker, these too may end up in the hands of your ex unless you make a change to the beneficiary designation. Finally, if you have life insurance, again, you have named a beneficiary of that insurance. At one time, it was probably your spouse.
But even if you did remember to change the beneficiaries and if your children are now your beneficiaries, your spouse may end up with control over the monies you have left for them if they are minors and without a trust. Maybe your ex will do the right thing and maybe not. If you will set up a trust, you are now in charge of who will hold, manage and distribute these assets to your kids upon your death.
The Ugly:
I know this sounds silly, but you need to make sure that your divorce is really final. In my first six months of practice, I ran into not one, but two clients who had been separated from their spouses for a long time, but had not actually received a divorce decree. If you are still married, even if your Will names someone else, your spouse (not really an ex) can petition to receive the right to live in your home for life and inherit as much as 1/3 of your personal property – and personal property includes money and stocks!
Make that call!
The best way to make sure your ex doesn’t end up with your estate is to make that call to an estate planning attorney. I know it is the last thing you want to think about after the battle of the divorce, but trust me, all your hard work protecting yourself in the divorce could be undone if you don’t make that call. Chances are that you will be able to quickly cross all of the t’s and dot all of the i’s to make your new estate plan (which does not include your ex) a reality. Don’t wait! Call now!!!
