Revising your estate plan may not be high on your to-do list during a divorce, but it should be, as the divorce can radically alter your estate plan.
September 29, 2012 /24-7PressRelease/ -- For many years on TV, the Brady Bunch represented the idealized vision of the blended family. One topic that never arose, at least in the television episodes, was the issue of estate planning.
If you are involved in a divorce, you need to discuss your situation with both your divorce attorney and an estate planning attorney to ensure decisions made for your divorce do not compromise your estate plan and your estate plan takes into consideration your new family circumstance.
Many Things to Think About
Because of the variability of financial and family situations, there is no single plan that will work for everyone. You need to know that if you remarry after a divorce and you have not made specific arrangements for you children from your first marriage, they may not receive the assets you want them to have.
Because some states' intestate succession laws transfer a significant portion of your assets to your current spouse, if you die before your new spouse, potentially your children from your first marriage would receive far less than you might have intended them to have.
Typically, a divorce revokes any will then in existence, so it is important to create a new estate plan at that time. If you then remarry, you should revise that plan yet again.
Grandma's Ring, Grandpa's Shotgun and the Vacation Home
While you need to account for all of your significant assets, bank accounts, stock or brokerage accounts, real estate, vehicles, you should also carefully inventory all of your sentimental family possessions.
Items like rings, china, paintings and any other personal property should be considered. You need to identify and specifically determine who will receive the property.
While Grandma may have promised your daughter a ring, if there is no legal instrument that ensures she will receive it, your new spouse could receive it and dispose of it for whatever cash value it would bring, if you die first.
The same holds true for a family vacation property. While you and your children may have fond memories of summers and holidays spent on vacation there, to a new spouse, it may simply be a very valuable piece of property with a high market value. To be certain that your goals are achieved, consult with an attorney and follow through with the necessary documents.
Consider a Trust or a Pre-Marital Agreement
A trust or a pre-marital agreement can be used to protect important property and keep it in the family. For some families, the most effective means of protecting assets are within a trust. Trusts are very powerful and flexible legal instruments that can be tailored to virtually any situation. You can use an individual, a trust company or a corporate trustee, like a bank, to ensure the proper and long-term administration of the trust.
If you create a trust, you should also consult the tax implications of the structure of the trust, as you may need to balance family law, estate planning and tax law in the process of creating the most beneficial structure for your specific situation.
Article provided by Jennings and Jennings
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