Divorce is an opportunity to reconsider an estate plan
Recent case shows impact of divorce on wills and estate planning concerns
As most people realize, divorce is a major step in many people’s lives and often has significant financial implications. However, one area that often gets overlooked in divorce is estate planning. According to the Wall Street Journal, one recent court case is showing just how dangerous it can be to ignore the effects divorce can have on estate planning. Experts say the case is a good example of what the long-term implications of a divorce can be and it should serve as a reminder to other divorcing spouses to go over their wills and related legal documents once their marriages are dissolved.
The case involved a New York woman who had drawn up a will in 1996 naming her then-husband as the primary beneficiary of her home, which had been valued at $200,000. She named her father-in-law as the secondary beneficiary. In 2007, however, the woman and her husband divorced and, unfortunately, three years later she passed away.
While state law barred her ex-husband from claiming inheritance of the home, it did not exclude his extended family from being beneficiaries. As a result, the former father-in-law was declared the beneficiary of the home because no will could be found that would have canceled out the 1996 will. Not surprisingly, the woman’s family is appealing the decision to grant the house to the former father-in-law.
Money and divorce
While most people look at divorce as primarily an emotional and personal issue, the law sees it much differently. As far as courts are concerned, divorce is similar to the splitting up of a business partnership. However, as USA Today reports, asking divorcing spouses to set aside the emotional pain they are likely going through and focus solely on divorce’s financial implications is usually difficult if not outright impossible.
But the financial implications are real and need to be taken seriously. As the above article shows, divorce can have a significant impact on one’s estate plan and should serve as an opportunity for people to redo any outdated wills. Other issues, such as tax implications and pensions, may sound dry, but they should be dealt with carefully as the decisions made during divorce concerning these issues could end up having consequences decades into the future.
Estate planning and divorce
To understand how divorce may impact one’s estate plan and other financial interests, it is best to talk to an attorney who practices both family law and estate law. Such an attorney can identify where divorce may intersect with long-term financial commitments. The breadth of knowledge and experience provided by such an attorney presents a clear advantage over other law firms that focus exclusively on just one area of law.