Estate planning is a topic that may end up on the back burner when one is going through a divorce. But life can change in an instant, for good or for bad. We do not know when we will die or if we will become incapacitated before we die. Loved ones can be put in a difficult situation if they have no idea of what to do if someone has just died or become incapacitated. This situation can be avoided to some extent by having an estate plan.
Every situation is unique. It is possible that an estate plan may not have to be complicated. Consulting with an estate planning attorney can involve sensitive but necessary discussions and it should also provide information to help one make informed decisions. In addition, divorce decrees and marital agreements may contain legal obligations that may impact one’s estate plan.
Here’s What You Should Know About Estate Planning
Here are some examples of items to consider discussing with an estate planning attorney.
1. Last Will and Testament
Among other things, this document allows you to appoint an Executor and alternate Executors to handle your estate when you die. It allows you to name a guardian for minor children (although this provision may not apply if the other parent is still alive). It also allows you to name beneficiaries to receive assets that pass through your estate. A Last Will and Testament can also include testamentary trusts and other provisions.
2. Funeral and Burial Instructions
Providing loved ones with instructions for your funeral and burial arrangements that include a way for the costs to be paid can help your loved ones have peace of mind during a very difficult time. This can provide loved ones the assurance that they are carrying out your true wishes. This can also help avoid potential disagreements loved ones may have with each other if there are differing views of what your funeral and burial arrangements should be.
3. Power of Attorney
This document allows you to appoint someone as your “Agent” or “Attorney-In-Fact” to conduct business on your behalf as specified in the document. The document may provide the person appointed with a general broad range of power or a limited range of power. This document may take effect immediately or upon your incapacitation (with “incapacitation” typically defined in the document).
4. Living Will/Health Care Proxy
This document allows you to express what actions should be taken for your health if you are no longer able to communicate. It may also allow you to appoint a “Health Care Agent” to communicate on your behalf with regard to your desires for medical treatment if you are no longer able to express your wishes.
5. Life Insurance Policies
Life insurance policies allow one or more beneficiaries to receive life insurance proceeds in the event of one’s death. Divorce terms may include a life insurance obligation, such as naming a specific individual (i.e. former spouse) as the beneficiary for a certain amount of the proceeds.
6. Assets With Beneficiary Designations
Assets such as retirement accounts may allow one or more beneficiaries to be designated to receive the asset when the owner dies, but it is important to note that divorce terms may include legal obligations pertaining to these assets.
These are just some examples of items to consider discussing with an estate planning attorney.