A divorce can be a long, tumultuous process. There are many different areas that must be discussed when filing for a divorce. This includes:
- the shared home
- the mortgage
- the children
- the vehicles
- and more
Lurking in the shadows of the divorce are the important, yet sometimes forgettable, documents, including Wills, trusts, and powers of attorney. Many couples may have completed an estate plan during the marriage. It is important to understand how these documents must be updated and when to update them throughout the divorce process.
A Will is a legal document that coordinates the distribution of your wishes for your assets after death. If a couple completed their Wills during the marriage and named their spouse as a beneficiary, the Will should be updated after the divorce. New York State has passed legislation under which an ex-spouse cannot inherit under a Will which was not changed post-divorce. However, if a person passes away prior to the divorce being finalized and the Will being updated, then the court will distribute the assets according to the Will, as the two individuals are still recognized as a married couple.
A trust is a fiduciary relationship in which one party (known as a trustor) gives another party (the trustee) the right to hold title to property or assets for the benefit of a third party (the beneficiary). Trusts can be either revocable or irrevocable and can be created either during the trustor’s lifetime or in their Will.
A revocable trust is one that can be updated and changed over time. As an example, if a couple named each other as beneficiaries in their revocable trusts and later divorced, each could then, as the creator of the trust, change the beneficiaries.
An irrevocable trust, as the name implies, is one that cannot be changed once it is created.
Power of Attorney
In many marriages, a power of attorney is signed in case one of the individuals becomes incapacitated and is unable to make medical and/or financial decisions on their own. A power of attorney simply gives a spouse (or family member or friend, depending on who is selected) the right to act as an agent for the other spouse. If an ex-spouse is designated as a power of attorney, it is important to consider revoking the document and making a new one.
A divorce is a complex financial and legal process. During the process, it is important to consider all of the legal and financial ramifications, including those involving advance directives, Wills and trusts. The lawyers at Wingate, Kearney & Cullen, LLP can represent you in a divorce or separation and can help you update these essential life documents that control your estate. For more information or to schedule a consultation, call (718) 852-5900 or, for divorce matters, (646) 620-6416, or fill out our contact form.