Have you recently got divorced? Are you getting divorced? If you answered yes to any of these questions then this is the blog post for you.
Many times our clients think that everything is final once the court finalizes the divorce. That is a misnomer. A few things need to occur to ensure your ex-spouse does not collect on your estate.
Although your ex-spouse’s rights as your agent has severed and his/her rights as a beneficiary under the trust have severed once the court finalizes the divorce; his/her rights under other beneficiary designations have not severed. Many times our clients listed the spouse, who is now an ex-spouse, as the primary beneficiary and the married revocable living trust as the secondary beneficiary of his/her life insurance policies, annuities or IRAs. Thus, the ex-spouse will still have a claim against these policies upon your death if not changed. Additionally, any financial accounts, like a checking account, that has a payable on death (POD) or transfer on death (TOD) designation will still go to the beneficiary listed. Some states allow a car title to have a TOD designation. Therefore, if you have a POD or TOD designation on any financial accounts or your car title with your ex-spouse listed as the beneficiary, he/she is still entitled to that account or the vehicle upon your death.
Many times divorcees think they can rely solely on the divorce decree to show their ownership in property. This is inaccurate. The divorce decree does not transfer property out of your joint trust. You must transfer assets out of the joint trust to prevent complication with future transfers and to prevent issues upon death. The best thing to do is to retitle the assets to show new ownership, preferably into a new single trust.
So, what do you need to do to ensure your ex does not collect on your estate? The answer is simple; create new estate planning documents, to include a new separate trust, and retitle your assets upon the finalization of the divorce.
Set up a meeting today with MH to have your estate plan reviewed to ensure all your documents reflect your correct agents, beneficiaries and to title your assets properly.
Contributed by an MH Phoenix Estate Planning Attorney.
What the Attorneys of Morris Hall Can Do For You:
The attorneys at Morris Hall have 100’s of years of combined experience ensuring that families’ assets are protected from probate, unnecessary taxes, creditors, ex-spouses and Medicaid spend-down. The attorneys also help those in Arizona and New Mexico to apply for and receive Medicaid assistance and Veterans Benefits. Our Arizona offices are located in Phoenix, Mesa, Scottsdale, Cave Creek, Tucson, Prescott, Flagstaff and Arrowhead. Our New Mexico offices are located in Albuquerque, Las Cruces and Santa Fe. Contact us today at 888.222.1328 to schedule an appointment!
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice, please contact an attorney in your community who can assess the specifics of your situation.