How Divorce Will Impact Your Estate Planning

If you were married before, chances are you made your estate planning with your then spouse, naming him or her, as the primary beneficiary, the executor of your will, as well as an agent in your power of attorney for medical and financial decisions. If since then you have divorced your spouse, but never updated your estate planning documents, you are running the risk that a person that you no longer wish to, could be cable of making decisions on your behalf, or would handle your assets after your death.

Estate planning documents need to be updated after every significant event, such as getting married or divorce, death or having a child. Only then does the maker of the documents ensures that his or her wishes are truly reflected in the existing documents.

Even though Ohio is a state that precludes an ex-spouse from inheriting under a will, treating them as if they predeceased the creator, it might still make the distribution of assets a costly and long litigation process, if the spouse wants to argue what are marital assets and what are not. A much better plan is to ensure that your estate plan is current and clear as to your wishes.

In short, martial assets include any property that either spouse acquires during the marriage, with limited exceptions. One of those exceptions in Ohio include inherited property and assets. However, any inherited assets that get comingled with marital assets become marital, therefore, can create issues down the road in case of a divorce.

After you divorce, you will probably name your children as beneficiaries. However, another issue to consider is if there is a risk that when you pass away any of your children may still be minors. Then, another adult will need to be appointed to take control over the assets. When it comes to guardianship and appointing a guardian of the estate of a minor child, the other parent is most likely going to be appointed. If, however, you wish to have another adult appointed as either one, you may state so in your will. For more information on guardianship of a minor, see my article “Guardianship of a Child vs. Guardian of the Estate”. You can also create a trust that will divide the children’s distributions in accordance with your wishes. Would you like them to get all their inheritance as soon as they turn 18? Or do you want them to get only a small portion at 18 and the remaining amount at a later time? All of that can be addressed in a trust.

When you are coming to see an attorney to make changes to your estate planning documents, it is important to bring with you your settlement and separation agreement. This will help the attorney make sure that the new estate plan is consistent with the terms of the separation agreement.

If you want to ensure that your estate plan is updated after any significant life event, and reflects your wishes, please call/text 216-586-4246 to schedule an appointment.

 

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