Wednesday, August 15, 2018

How Does Divorce Affect Your Estate Plan?

When you go through a divorce, it affects virtually every aspect of your life—from your daily life to your long-term plans for the future. It also changes your legal obligations when it comes to your estate plan as well. In fact, you need to take steps to revise your estate plan, so it actually reflects your changed living situation. A Texas estate planning lawyer can be a great resource to help you decide what you need to change in your estate plan after a divorce.

Divorce Revokes Your Will as to Your Former Spouse

Under Texas law, the portions of your will that designate your former spouse for anything will be invalidated. In many situations, unless you have a secondary or “back up” executor, that will mean that you have not named anyone as an executor. In those situations, the court will have to designate an executor, and you have no say in who that person may be.

Because your spouse is essentially removed from your will, you also may have significant gaps in your document. It may be unclear who property should go to if your former spouse no longer gets that property. It always a good idea to completely revoke your will and create a new one after a divorce so you can address any of these concerns.

Naming a Guardian for Minor Children

Guardian provisions for younger children may not be affected by your divorce, however. In most situations, if you pass, care of your minor children will automatically go to the other parent (assuming that is your former spouse).

However, if there is some reason that you do not want this to happen, such as where the other parent’s rights have been terminated, you need to change your named guardian in your will. Keep in mind that, generally, this provision will only be effective if their other parent is unavailable or unfit to care for the kids.

Beneficiary Designations

Although Texas law automatically “changes” your will, it does not do the same thing for other beneficiary designations that might be a part of your estate plan. Consider the following estate planning tools that you may be using:

  • Life insurance designations. These will not automatically change. You need to alter this designation if you do not want your former spouse to get your life insurance money upon your death.

  • Pay-on-death accounts. These accounts are altered so that they do not go to your former spouse after your divorce. However, if you do not want them to be included with the rest of your property in your estate and instead want the account to go to a different person, you will need to change the beneficiary.

  • Retirement accounts. These will generally not change under Texas law. In fact, for many accounts, federal law prohibits state laws from changing your beneficiary for any reason. You will need to change the recipient so that it does not go to your former spouse if that is not what you want.

It is a good idea to speak with a Texas estate planning lawyer after your divorce so you can discuss all of the estate planning tools available to you and make necessary changes. Contact our office today for a consultation.

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