Estate Planning and Divorce: 3 Things to Consider
Divorce is a challenging time that can be made even more difficult when it comes to estate planning for long-married couples. In divorce, it is often hard to divide retirement accounts and assets amicably and if you now have children or grandchildren, your existing estate plan might need to be updated or entirely revised.
If you are going through a divorce or are starting a second marriage, working toward the fair division of your assets is very important. Otherwise, you could end up with a shortfall down the road. It’s also important to remember to update your estate plan so that your wishes will be honored when you pass away, regardless of your marital status at that time.
Here are 3 things to consider:
- Create A Trust
If you are divorced or entering a second marriage, creating a trust will be an essential part of your estate plan. For example, a trust can be used to ensure that your second spouse is unable to disinherit your children from your first marriage. Be sure to have property agreements (prenuptial or postnuptial) in place when setting up any trusts or irrevocable trusts.
- Update Your Beneficiaries
Keeping your beneficiary designations up to date is a very important part of estate planning but it can easily be forgotten during the divorce process. Even though you have a will, you still need to have beneficiary designations on your retirement and life insurance accounts. Your will does not cover these assets. Make sure to check all your life insurance policies, retirement accounts and annuities following a divorce, marriage or remarriage.
- Stay Organized
Keeping good records will help ensure all of your assets are accounted for. Going through your estate plan and retirement documents on a regular basis will ensure everything is in order for when you need it the most. Insurance policies and retirement accounts tend to accumulate over the years which makes it easy to overlook an account during a divorce or new marriage. If there is incorrect or outdated information on your will, trusts or beneficiary forms, you are at risk of succumbing to estate planning problems that are easy to avoid if you have planned properly.
Divorce is a challenging situation for everyone involved, but with insight and proper estate planning, you will be ready and able to move forward to the next chapter of your life.
We Can Help
To discuss your specific needs with one of our estate planning attorneys in Pittsburgh, please call us at Fingeret Law (412.281.8222) or contact us online.