Estate planning and Divorce

Divorce is unfortunately a popular topic when fifty (50) percent of all new marriages end up in a divorce. The next question is how do you design your estate plan in a manner that protect you or your loved ones from a divorcing spouse.

Estate Planning and Divorce
Divorcing spouses should amend their estate planning their estate planning documents. This is important because your assets will otherwise, go directly to your ex-spouse. Most ex-spouses (deceased that is) would not like this. In most cases, guardians should be chosen in case you or your spouse are deceased. A key question is who should manage any inheritance that your minor children or young adult would receive. Typically, some divorcing spouses are hesitant to allow their ex-spouse to assume control over their children's inheritance. Some adults are good with money and some adults are poor at financial management. Unfortunately, many people falsely assume that an inheritance will go to their children as planned. In most cases, a multi-year pay out of an inheritance will unlikely make it to its' beneficiary. A way to prevent this is to set up a trust and have a trusted friend or family member assume management over the trust funds. A trust is simply a written agreement created under law that outlines how the trust should be managed. For example, we instruct the trustee to select a reputable financial company upon a death of a person and create an annuity. Most annuities are flexible and payouts of principal or income can be arranged as often as you desire or in a restrictive manner (25 years old, 35 years old, 45 years old).

Estate Planning and Divorce

The second concern for divorcing spouses or parents of divorcing spouses is inheritance. An inheritance such as a gift through a will is subject to alimony and a divorcing spouses. A will cannot have a spendthrift provision. A spendthrift provision is a provision, which protects a divorcing spouse's inheritance from claims advanced by their ex-spouses. In contrasts, a living trusts or otherwise known as a "revocable living trust" cannot be touched by a divorcing spouse. A living trust has a unique feature called a spendthrift provision. This spendthrift provision states clearly that an inheritance is not subject to alimony or divorcing spouse's claims. Spendthrift provisions are routinely upheld.

In conclusion, any divorcing spouse should amend and update their estate plan. Sean Robertson is an tax attorney that concentrates in estate planning, estate and gift tax planning, asset protection, and probate law. Sean Robertson can be reached at (312) 498-6080 or (630) 364-2318 or RobertsonLawGroup@gmail.com.

Sean Robertson graduated from University of Illinois at Urbana-Champaign in 1997 and DePaul University College of Law in 2003. Sean Robertson has over six (6) years of legal experience representing husband and wives and divorcing spouses in their unique estate planning options.