When you get a divorce, it affects many aspects of your life. One that not everyone may immediately consider is your estate plan. Your divorce will impact your personal relationships and your finances, and these are both essential aspects of an estate plan. An estate planning attorney in Lincoln can help you review your estate plan after life changes, like divorce, to ensure that it meets your current life goals.
A divorce is frequently one of the most difficult legal, emotional, and financial experiences in a person’s life. It can be hard to consider adding things to do after this difficult process, but it is incredibly important to ensure that the work you put into your estate plan continues to benefit you and your loved ones.
What to Review in Your Estate Plan After Divorce
Each individual has their own goals in estate planning. For most, these goals revolve around asset protection, personal end-of-life care, and securing protections for their loved ones. These benefits can be less effective or completely void if you do not take the time to review an estate plan after significant life changes. If there is any confusion or discrepancies when implementing your estate plan, it can increase familial disputes and even result in the invalidation of your estate plan.
After a divorce, there are several specific aspects you should review to ensure that they are still valid or uphold your wishes for your estate and personal care. These aspects include:
Powers of Attorney
Durable and medical powers of attorney give a family member or trusted professional the legal powers to make financial or healthcare decisions for you when you cannot. For a majority of people, their spouse is named as this individual. Depending on the circumstances of your divorce, you may want to change this designation during or after proceedings.
Changes to Assets
Your estate plan inventories and distributes your assets and debts in a will or in trusts, ensuring that your beneficiaries receive the financial benefits from those assets. A divorce greatly affects the assets you have in your possession.
The biggest change results from property division, and you may also be paying spousal support or child support. Property division typically results in each spouse losing half of the marital assets. You may have lost enough assets in the division of property that your current estate plan is completely invalid. Your estate plan needs to be updated with the new properties of your estate and to reflect your new financial circumstances.
Beneficiaries
In Nebraska, an ex-spouse is automatically removed from being able to inherit under succession laws. However, in most cases, this removal does not apply to the beneficiary designations on your accounts and in your estate plan. You will have to manually remove your ex-spouse as a beneficiary or contingent beneficiary.
Review the estate plan as well as bank accounts, investment accounts, retirement accounts, real estate properties, and other assets. Your estate plan may also name other individuals and beneficiaries, such as your ex-spouse’s family members. After your divorce, ensure that you have the correct individuals benefiting from your estate.
Decisions for Children
Your estate plan can name a guardian for your minor children, which you may want to change after a divorce. Additionally, if you have minor children, consider their inheritance rights in your estate plan. If you do not set up a trust for minor children, your ex-spouse would likely control the assets you leave to your children until they reach majority.
Executor and Trustee Designations
An executor or trustee is responsible for the distribution of your estate after your death. If you named your spouse, you may want to remove them following a divorce.
It’s important to be aware that not everything can be updated after a divorce. For example, if your ex-spouse is named as the beneficiary in an irrevocable trust, this can be very hard to change.
FAQs
Q: How Can Divorce Affect Estate Planning?
A: A divorce can affect several parts of your estate plan, including:
- You may no longer have access to assets that are listed in the estate plan.
- You want to remove your ex-spouse or your ex-spouse’s family members as beneficiaries, powers of attorney, executors, trustees, guardians for your children, or other important roles in your estate plan.
- You may want to make clear the inheritance rights of your children.
After a divorce, it is important to review your estate plan to determine if anything has changed.
Q: Is My Spouse Entitled to My Inheritance in Nebraska?
A: This depends on whether the inheritance was provided to you or to you and your spouse. If it was an inheritance left solely to you, then it is considered separate property, even if you received it during the marriage. As long as you can prove that you inherited the assets, they are considered yours. If the assets are commingled in marital accounts, it can be more difficult to show which assets are yours, as you may need clear documentation and professional asset tracing.
Q: How Are Assets Split in a Divorce in Nebraska?
A: Nebraska is an equitable distribution state, so the court will divide assets based on what is considered equitable, not equal. The court will look at factors such as how long the couple was married, whether they have children, and the value of the separate assets that each spouse has.
If spouses have a marital agreement, they can avoid the court’s equitable distribution and follow the provisions of their agreement. Spouses can also negotiate their property division outside of court. As long as the split is not unconscionable, the court will likely approve it.
Q: Can My Ex-Wife Claim My Inheritance After the Divorce?
A: Once a divorce is finalized, property division cannot be modified. If your inheritance is considered separate property due to being given only to you, then it will not be up for division during the divorce case. It may be factored into equitable property division, however, because the value of your own separate assets is considered when the court divides marital property. Whether you received your inheritance before or after the divorce, it is considered your property, and your spouse cannot claim it.
Ensuring Your Family’s Financial Interests
An experienced estate planning attorney is essential to help you ensure that your estate plan is enforceable. Contact Stange Law Firm today if you want to create or update your estate plan.
