Ending a marriage is never an easy process, even if the divorce is amicable. It is not uncommon for people in New York and elsewhere to be so overwhelmed by property division, child custody and other issues that they push updating their wills and trusts to the back burner or forget about it altogether. There are essential estate planning matters to attend to at this challenging time.
Some of the most significant changes include beneficiaries designated on life insurance plans as well as beneficiaries on the person’s IRA. With retirement plans, the spouse’s consent might be required before the plans can be changed. If the ex-spouse is still named as the power of attorney, executor of the will or a trustee of the trust, it could cause problems if the testator should become incapacitated or die. Then there are transfer on death accounts that will automatically be paid out to the designated beneficiary upon the holder’s death, and if that happens before it was changed, the ex-spouse might receive the funds.
Death can occur at any time, and in such an event, money can be left to someone who is no longer the spouse of the deceased person. Such circumstances could lead to bitter fights among ex-spouses, family members and children. If the necessary changes are not made during or soon after the divorce, costly legal fees can drain the estate.
The ideal situation is to include a New York financial adviser and estate planning attorney in the legal support team that handles the divorce. It is only natural to want a break from it all as soon as the divorce is final, and for that reason, it might be sensible to deal with wills and trusts and other estate planning matters sooner rather than later. Having the necessary changes in place can also provide peace of mind.