Divorce and Your Estate Plan

by John T. Prahl, Esq.

As an attorney concentrating in estate planning and probate, I am sometimes contacted by people who are recently divorced, who wish to plan or amend a prior plan, for their estate. I am rarely, if ever contacted by persons contemplating or in the midst of a divorce about these issues. This is unfortunate, because just like planning for marriage involves a person’s whole life so should planning for a divorce. A person’s estate plan or their need for an estate plan is affected by divorce. Affluent couples in particular may have extensive estate plans which require complicated unwinding. Specifics about such persons are beyond the scope of this article. This article will concentrate on issues which all persons contemplating, in the midst of, or recently divorced, should consider whether they are affluent or not.

People who get divorced either have a formal estate plan or they do not. Since only a minority of all persons have formal estate plans, those without formal estate plans are the larger group. Married couples often own all or nearly all of their assets jointly. This has the benefit of making the death of one spouse a relatively simple, legal proposition. The surviving spouse takes jointly held assets, by operation of law, entirely in his or her name and may usually upon providing proof of death, deal with such properties alone. Divorce of necessity, divides the properties and each spouse will usually own properties exclusively in their own names after the divorce is final. If a newly single person dies, his or her assets will have to go through the judicial process of probate before assets can be sold or accessed. This can lead to weeks or even months without access to bank accounts or other assets. Estates of those without wills are governed by Florida intestacy statutes, which can sometimes produce undesirable results. Intestacy statutes for example, will pass the estate of a divorced person to his or her children. If they are minors, formal guardianship for the children may be required, since Florida Statutes do not permit minors to receive more than very modest sums, without a guardianship. The guardianship will remain in place until each child turns eighteen. An estate plan could change this result.

Estate plans typically contain other documents, naming persons to make medical decisions, or handle someone’s affairs when one is not able to. Even a spouse may not be able to make such decisions or handle such affairs absent a formal document, but a more distant relative will absolutely not be able to manage another adult’s affairs. Thus while a married couple may be able to deal with certain situations without a formal estate plan, a single person, particularly one with minor children cannot. Divorce takes someone who may have had a moderate need for an estate plan, and turns them into someone who has a high need for an estate plan.

The other group of people contemplating or obtaining a divorce, are those who already have estate plans. In my estate planning practice, it is almost universal that married couples name each other as health care surrogate, holder of a durable power of attorney, and personal representative of their estate. Florida Statutes attempt to address the problem. Spouses named in existing estate plans as holder of a durable power of attorney or health care surrogate are automatically excluded upon the filing of petition for divorce while those named as beneficiary or personal representative of a will or beneficiary or successor trustee of a revocable trust are excluded upon entry of a final judgment of dissolution of marriage. These provisions are helpful but do not cover any time frame when the marriage is in trouble, but before filing for divorce. Wills and revocable trusts remain in effect during the entire divorce process. Florida Statutes prohibit disinheriting a spouse, but they do not require a soon to be ex-spouse to be placed in control of your estate as personal representative named in a will or as successor trustee of a revocable trust. The soon to be ex-spouse need not control property of the children either. Often estate plans give surviving spouses much more than Florida Statutes require. Amendments to these documents while divorce is being contemplated and during divorce proceedings eliminate the risks that the soon to be ex-spouse will be in charge if something happens during this sometimes lengthy process.

Once the divorce is final, Florida Statutes remove the ex-spouse as a beneficiary or as one having control under the estate planning documents. Divorce does not however remove the ex-mother-in-law or ex-brother-in-law that may be named as guardian of the children or successor personal representative or trustee. To remove these people from positions of authority, affirmative action is required. Just as with people who have no plan, the terms of the estate plan take on new importance for a single individual, particularly one with minor or special needs children. Estate planning is not commonly a focus, nor is it really the responsibility of a divorce attorney. It is up to the person contemplating, in the middle of, or newly divorced to consider the effect of divorce on his or her own estate. No one knows the details of your life better than you do.

Article published by ProbateLawyerMiamiFlorida.com - committed to delivering the very best of my expertise when dealing with the probate & estate planning affairs, and real estate & business transactions for each of my clients. If you are currently seeking a professional, competent South Florida lawyer in Miami, Coral Gables, Pinecrest or Palmetto Bay, contact me now for a no obligation first consultation.