Few things are more emotionally trying than going through a divorce. Once you arrive at a settlement agreement, you feel some relief that you can move on with your separate lives. But you may not realize that your hard-earned money can end up back with your former spouse if you fail to implement an estate plan that prevents that from happening.
Even if any exes are excluded from your will, they can end up with control of your assets. Here's how it can happen:
If you don't want your money to end up in the hands of your former spouse, it's critical to either create or revise your estate plan as soon as possible after filing for divorce. Put your mind at ease through financial planning and by making sure your assets and children are protected if something happens to you.
Your marital dissolution and property settlement with your ex should do away with any duty to support your ex, unless the settlement says differently. You should formalize your estate plan to ensure that your assets are distributed as you want.
And one more thing: Draw up a prenup for your child who's about to get married. Why?
If you've given gifts to your child, those assets effectively lose their protection as gifts. The outcome may be based on how your attorney presents the facts, when the divorce took place or even whether the judge is having a good day or not.
But, by naming a trustee other than a married child, you protect the trust from a potential ex. You can give the trustee the ability to distribute income only to the beneficiary and not to distribute anything if the couple is not living with one another. Your trust and/or your child's prenup can be drafted to maximize protection of family assets.
Of course, these are just the basics of a very complex issue. The point is to not make any assumptions, and to consult professionals whenever there is a major life change in your family.
Newsletter articles are posted every 2 weeks.
If you would like to have our e-newsletter delivered directly to your inbox, please sign up. Your information is confidential; you can unsubscribe at any time. Subscribe.