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Kevin O'Flaherty

In this article, we will explain common estate planning considerations after a divorce.  We will discuss why estate planning after a divorce is particularly important, how to update your estate plan after a divorce, and estate planning after you remarry.

Why is Estate Planning After a Divorce Important?

Estate planning is almost always beneficial, but it is especially important after a divorce.  For more on the general benefits of estate planning, check out our article, What Can I Accomplish With an Estate Plan?

If you are single with children and you do not have a will or a trust, Illinois intestacy laws provide that your descendants will inherit your estate in equal shares when you pass.  

So what’s the problem?  If you have minor children, your estate assets will not go directly to them.  Rather, a guardian of the child’s estate will be appointed by the court.  This person will be responsible for managing the child’s assets until he or she reaches adulthood, at which point the assets will be distributed to the child.  For more, check out What Happens When Minors Inherit Property in Illinois?

This scenario is problematic for divorced individuals, because if your ex-spouse is the parent of the child in question he or she will likely be named guardian of the child’s estate.  This means that your ex will have control of your assets after you pass, which is not often the outcome divorced individuals desire.

The easy way to avoid this situation is to work with an attorney to prepare a revocable living trust or update your existing trust.  A revocable living trust is a legal entity that can own property separate and apart from your estate.  When you create a revocable living trust, you will name a trustee to be responsible for managing the assets of the trust, according to the trust’s terms, for the benefit of the beneficiary.  

During your lifetime, you will be both the trustee and beneficiary of the trust, meaning that your only obligation is to manage the assets owned by the trust for your own benefit.  So, during your lifetime you don’t even notice that the assets are owned by the trust and not in your individual name.

However, the trust will name several successor trustees.  When you pass, the first successor trustee that you have prioritized on the list who is willing and able to assume the responsibility will be responsible for managing the assets for the benefit of whoever you name as beneficiaries after your death.

The upshot is that, if you have a trust, you can make sure that someone that you trust to look out for the best interests of your children will be responsible for managing your estate’s assets on your children’s behalf until they reach adulthood, or whatever age you select to give your children access to the assets.  During that time the trustee has the power to distribute as much or as little to the guardian of the children as is necessary for their well being.  This is usually a preferable alternative than your ex gaining control of your assets after you pass.  

How to Update Your Estate Plan After a Divorce

If you have an existing estate plan, there are several documents you will want to update as soon as possible once your divorce is initiated.  

If you have either a will or a trust, your ex should be removed as the executor or trustee and replaced with someone else that you trust.  Depending on how the document is worded, you may also need to change how your assets are to be distributed after your death to ensure that your ex does not inherit.  

If you have minor children and you have a will but not a trust, it may make sense to get a trust to ensure that the assets that are intended for your children are not placed in the care of your ex, as discussed above.  

If you have healthcare and/or financial powers of attorney, or a living will these should be revoked and replaced with documents that do not give your ex decision making powers over your medical care, financial decisions, and end of life decisions respectively.  

Even if you do not have an estate plan, you probably have your ex listed as the primary beneficiary of your life insurance policy and your retirement accounts.  You should update these accounts as well as any other accounts that are payable on death to your ex.  

Estate Planning After You Remarry

If you start a new serious relationship after your divorce, whether you remarry or otherwise, there will often be certain assets that you would like to ensure get passed to your own children, as opposed to your new spouse and subsequently his or her descendants.  

A good estate plan can ensure that each of your individual and joint assets are divided fairly between the surviving spouse and the deceased spouse’s children.  For some assets like real estate, a trust can provide that the surviving spouse has the right to live in the property for the remainder of his or her life, but upon the surviving spouse’s death the property will be divided equally among both spouses’ children.

In the context of mixed families from prior marriage, you can get very creative with your estate planning to make sure that both spouses and the children from both sides of the family are all treated fairly regardless of who passes away first.

Disclaimer: The information provided on this blog is intended for general informational purposes only and should not be construed as legal advice on any subject matter. This information is not intended to create, and receipt or viewing does not constitute an attorney-client relationship. Each individual's legal needs are unique, and these materials may not be applicable to your legal situation. Always seek the advice of a competent attorney with any questions you may have regarding a legal issue. Do not disregard professional legal advice or delay in seeking it because of something you have read on this blog.


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