DISTRICT OF COLUMBIA

700 12th Street, NW, Suite 700
Washington, DC 20005
(202) 351-6825

Estate Planning After Divorce
Jayde Law PLLC • Aug 17, 2022

So, you’re officially divorced. In starting this new chapter of life, you should update your estate planning documents as soon as possible. You may no longer be legally married, but, depending on where you reside, divorce may not automatically remove your prior spouse from your will, trust, or beneficiary designations. Here are some items to consider updating:

Medical Directives

When you engage in estate planning, it is standard to complete forms such as a health care proxy or living will. Often, spouses will choose each other as their agents for making health care decisions if they become incapacitated. After a divorce, your ex may be the last person you want handling these matters. Change your documents to appoint someone you trust.

Power of Attorney

Another document you may have previously executed is a power of attorney. This can give another person a great deal of control over your assets and personal and financial affairs. If your current power of attorney names your prior spouse as your agent, you can revoke it and sign a new one choosing a different person to act as your agent.

Will and/or Trust

Many couples designate their partner as the executor or personal representative of their estate under their will. Your ex-spouse may also be listed as a beneficiary of your estate. If you do not want your former spouse to have a say over how your assets are handled or to receive any inheritance, it is important to review and amend your will now to remove them. The same goes for any trust you may have created where your ex is the trustee or a beneficiary.

Guardianship of Your Minor Children

If you have concerns about your prior spouse’s ability to be a guardian to your minor children, there may be steps you can take to mitigate any instability a divorce may have brought to the situation.

One option is to set up a trust for your children that will protect assets from being irresponsibly depleted. Life insurance amounts or other assets placed in a trust will be managed by a person whom you can name as trustee. This will prevent the other parent, who could otherwise be in control of minor children’s finances, from accessing certain funds.

Be Aware of What Insurance You Are Required to Maintain

Many divorce settlements set forth that one spouse maintains life insurance and specifies who shall be a beneficiary of the policy. You should ensure your current life insurance policies not only comply with your divorce agreement, but also are not in danger of lapsing.

The same goes for medical insurance. If you are required to maintain medical insurance in a certain manner, review your plan to ensure the correct parties are covered and that it is in good standing.

Failure to comply with your divorce agreement can cause you to wind up back in court.

Beneficiary Designations

If you are not required to maintain your ex-spouse as a beneficiary on your life insurance or retirement accounts, now is the time to update your designations. You should contact your insurance company or retirement administrator to make these changes. Upon your passing, the funds will go to whomever is listed as a beneficiary, regardless of a divorce proceeding.

Consult a New Estate Planner

The best thing you can do after your divorce is work with an estate planner to review your current documents and update them appropriately. Ideally, this person should have no connection to your prior spouse. Keep a copy of your divorce decree and settlement agreement handy. An estate planner will need to review it to evaluate what you need going forward.

To understand the consequences of a divorce on your estate plan and/or if you are recently divorced and looking to update your estate plan, contact Jayde Law PLLC for a consultation.

Estate Planning: An Overview

15 Feb, 2023
Estate planning entails preparing your affairs for the future, including death and other life events. While older adults might give more thought to estate planning, it is an essential tool at any age. WHY IT’S IMPORTANT With estate planning, individuals and families can protect their interests during incapacity or after death. You can provide for a spouse, children, and dependent family members when you pass away. You can arrange your care and financial affairs should you suffer a severe accident or illness that renders you incapacitated. If you are a parent, you can appoint a guardian to care for and manage the inheritance of your minor children. If you own a business, you can prepare to transfer it to family members, colleagues, or other trusted individuals. You can make arrangements for your long-term care when you can no longer live on your own. You can also make funeral preparations, determine what happens to your body when you pass, and prepay for your funeral, all of which can help lessen the burden on your family members. WHAT IS AN ESTATE? Legacy planning entails passing on your estate. Your estate is everything you own, including: Savings and checking accounts Retirement accounts Investments Life insurance Annuities Houses and other real estate Cars Personal possessions, such as jewelry, furniture, and sentimental items When you die, your estate encompasses all your property upon death. If you sold or gave away property before death, it is no longer part of your estate, and you cannot transfer it upon death. Items you own with another person are also part of your estate. Depending on the type of asset, it might automatically pass to the other owner. For instance, if you own a home with your spouse as tenants by the entirety, it will pass to your spouse upon your death. WHAT IS AN ESTATE PLAN? An estate plan consists of legal documents and arrangements that determine the distribution of your assets when you die or outline your care if you become incapacitated. While a will can be a central component of an estate plan, a solid plan encompasses more than a will. It can also include legal tools that allow assets to pass outside of a will and probate (the process by which a court oversees the distribution of assets in a will). ESTATE PLANNING TOOLS In addition to your will, your estate plan could include the following: Purchasing jointly owned property or adding a joint owner to your property Designating a beneficiary on a pay-on-death bank account, retirement account, or annuity Buying life insurance to benefit your family should you pass away Creating a trust for a child Obtaining long-term care insurance to cover future nursing home or assisted living fees Executing power of attorney documents, naming health care and financial agents Making a living will, providing instructions for care should you become incapacitated Preparing a transfer on death instrument to pass ownership of your property to a beneficiary upon death WHAT IS AN ESTATE PLANNER? As professionals helping people make future arrangements, estate planners are attorneys who focus on end-of-life preparations. Estate planning attorneys assist people with drafting legal documents and understanding laws and taxes that could affect them and the loved ones they will leave behind. When creating estate plans, individuals may need to consult attorneys as well as other experts, including financial planners, accountants, life insurance advisors, bankers, and real estate brokers. WHAT DOES THE FINAL DISTRIBUTION OF ASSETS INVOLVE? The final distribution of assets is a conclusory step in the probate process before the court closes probate. When an estate goes through probate, the personal representative or executor must satisfy all debts, and the court must resolve all disputes before allowing the beneficiaries to receive the assets. At the end of the probate process, ownership of the assets of the estate is transferred to the beneficiaries. DO I NEED A LAWYER FOR ESTATE PLANNING? Although the law does not require that individuals secure legal representation to make estate plans, many find the support and guidance of estate planning attorneys invaluable. An estate planning attorney can help you identify the legal tools and strategies that suit your needs, as well as draft the necessary documents, such as wills, trusts, and powers of attorney. In addition to addressing tax concerns and drafting documents, these attorneys can help you avoid probate. Probate, the process by which the court oversees the distribution of assets in a will, can be expensive and time-consuming for surviving family members. It also opens the door for disgruntled people to challenge the validity of the testamentary document, further complicating asset distribution. An estate planning attorney could help you organize your assets to transfer outside of probate to make the transfers simpler, easier, and less vulnerable to challenges. When you are ready to create an estate plan, contact Jayde Law PLLC.

Three Things to Know About Being an Executor

01 Feb, 2023
An executor (or personal representative) is a person or entity you choose to carry out your last wishes outlined in your will. Your executor should be someone you trust is responsible enough to manage your estate after you pass away. Choosing an executor is a big decision when it comes to estate planning. So, what should you know about an executor? What should you consider before naming an executor? Here are answers to three common questions about executors. Can an Executor Decide Who Gets What? No. In most circumstances, an executor cannot decide who gets what property. Executors are responsible for carrying out the decedent’s wishes as outlined in the will. However, if the decedent did not distribute all their assets in their will, in some circumstances, the executor may be able to decide how to distribute the unassigned property. Can an Executor of a Will Be a Beneficiary? Yes. An executor can also be a beneficiary of the will. It is common for people to have their surviving spouse or children act as the executor of their estate. This choice can be cost-effective if you have a small or simple estate. Another benefit of having a family member act as the executor of your estate is they are familiar with your wishes. They know you, and they understand how you want your assets divided. If you forget to state where property goes in your will, an executor that knows you well is more likely to give those assets to the correct beneficiaries. How Long Does the Executor Have to Pay the Beneficiaries? The short answer is: It depends. The executor should work diligently to get each beneficiary paid as soon as possible. While the executor is responsible for ensuring beneficiaries receive the money or property they were left in the will, the probate process may delay beneficiaries from receiving a payout. Depending on the size of the estate and the debts and taxes the estate owes, it may take anywhere from six months to more than one year for a beneficiary to receive an inheritance. The probate process varies depending on the state, but the typical process goes like this: Submit the Will for Probate — Part of the executor’s responsibility to the estate is to file the will with the probate court. Filing the will begins the probate process. Once completed, the beneficiaries are one step closer to receiving their inheritance. The time executors have to file a will with the probate court varies by state. File an Inventory — An inventory of estate assets is required. As part of an inventory, the executor determines the total value of all estate property, money, and other assets. A completed inventory can then be used by the executor to determine whether federal or state taxes apply, or whether assets will be used to settle debts. Pay Taxes and Debts — Before the executor can distribute any assets to beneficiaries, estate debts and taxes must be paid. The executor is responsible for ensuring these payments are made. Creating a complete estate plan can be overwhelming. With the help of an experienced estate planning attorney, you can ease some of the anxieties you may be facing in thinking about estate planning. If you are ready to start the estate planning process give Jayde Law PLLC a call..
Share by: