Video: Estate Planning after Divorce

Video

Hi folks, it’s Andy Stautz at Stautz Law. I’m back today talking about estate planning. Today’s topic is estate planning and divorce. Divorce is a big moment in estate planning because it really changes the legal priority of your relationships, right? Your spouse was number one person in the eyes of the law — your ex-spouse or soon to be ex-spouse, you know, you’re changing those relationships. So during a divorce, immediately after a divorce, you need to revise your estate plan to account for those changes.  

So the default rules try to handle it, right? because they know you don’t want your ex-spouse being the same person in your plan, in your property disposition, as they were before.  

But it’s not complete, right? There are some things that happen, like, accidentally that you really need to pay attention to. 

So. Your ex-spouse, upon divorce, your will provisions in favor of your former spouse are cancelled. I.C. 29-5-1-8. Same thing with revocable trusts, canceled. But not with irrevocable trusts! I.C. 30-4-2-15. And not with life insurance designations or retirement account beneficiary designations. But then transfer on death property deeds, yes, the law does automatically cancel those. I.C. 32-17-14.

You know if you had an estate plan where your spouse was everything. It’s going to go to pieces after your divorce because some of them will automatically be cancelled, but some of them won’t be. So you should revise that. And make sure, you know, it’s all undone. Everything, everything you want undone is undone.  

So I’ll try to put those citations you know in the. In the text version of this. But it’s oddball, so you know, you can’t just assume that “Oh, we’re divorced now . . . my ex-spouse doesn’t get any.”  

The other big point to keep in mind is that the law, the default change in the law, only happens on the date of the dissolution decree or annulment. So while your divorce is pending, you know, you probably don’t want your soon to be ex-spouse, you know, to be in the same position. But the law hasn’t caught up to your family situation yet, so especially if your divorce is going to take a while or you’re worried about, you know, things happening in the interim, you know, revise it in advance. OK.  

And lastly, even where the law automatically takes care of straightening things out, it’s still good form to, like, go back, restate your will, restate your trust. And take it out. You know, update it. Take out the references to your former spouse as a beneficiary. Note that the marriage existed, but ended in divorce.  

Is it legally necessary? No, maybe not, but it’s protective of you. It reduces the risk of a conflict later and conflicts are expensive. So you should be revising everything anyway.  

And lastly, you know, you probably want to rethink your entire scheme of disposition after your divorce, because now instead of being married and jointly responsible for any children or jointly responsible for your parents, your relatives, whatever, it becomes kind of “just you,” in a sense. So maybe it’s time to set up a trust for your children, because you can’t assume that your property is going to your now ex-spouse. So, you know, you might need to use documents in a different way… to sort of stand in for what you used to rely on this other person for.  

So if you’re getting a divorce, you should think about your estate plan. You should get one if you don’t have one. You should make the revisions. To make sure it works like you want. So that’s quick overview. Your situation is almost certain to be special and different, so that’s why we have initial planning meetings. You can book online. You can call me, and I’d be happy to talk about what you specifically need 

That’s all for today. Thank you very much and hope to talk to you soon.