Divorce is often a messy process, altering lives, changing relationships, and shaking up finances. In the wake of such a decision, sometimes it can feel like everything is different. While many people spend time grappling with the emotional and legal changes that ensue during a divorce, many forget to think about what happens long after the divorce. A divorce drastically alters estate plans, which generally means they need significant revising post-divorce. For either party in a divorce, returning to an estate plan and reevaluating their circumstances can help to provide peace of mind later in life.
For more information on estate plans post-divorce, consider speaking with an experienced South Carolina Family Lawyer from King Law Offices by calling (888) 748-KING.
Why Update Estate Plans After Divorce?
Many people don’t understand the implications of divorce on an estate plan. Why bother revisiting something that may not affect one’s life until years down the road? However, the terms of a divorce often leave large holes in an individual’s estate plan. Most married couples list their spouses as benefactors or executors in their wills, which may not be in line with the individual’s wishes post-divorce.
In addition to this, many divorcees also need to consider their children and beneficiaries of their estate. Depending on the terms of the will, an ex-spouse may stand to inherit after a divorce. When children are involved, there are also the terms of guardianship to consider. By revisiting and revising wills, trusts, and other estate plan documents, an individual can prevent unintended beneficiaries and protect the interests of their family.
Implications of a Divorce on Wills and Trusts
The most commonly used estate planning documents are wills and trusts. Wills are primarily legal documents that express to the court an individual’s wishes for their finances, assets, and property to their beneficiaries. This may also include other wishes for an end-of-life situation.
A trust is similar in capacity, but different in nature. A trust, which can be revocable or irrevocable, is primarily a financial entity that holds assets with directions on how they should be distributed upon the death of the grantor. Trusts are effective in avoiding the probate courts, which can be lengthy and costly, but may not be effective in declaring guardianship for minors.
Wills
In the event of a divorce, one may consider updating their will. More often than not, testators list their spouses as beneficiaries, executors, or proxies in the event of their death. However, after a divorce, this may not be within the testator’s wishes.
This will generally require the testator to update their will with new information that better reflects their wishes. In South Carolina, a will is legally required to be in writing, signed by the testator or at the testator’s direction, and signed by two witnesses who can affirm that the testator signed in good faith. Another option available is to amend the existing will with a codicil, which would need to meet the legal requirements of a brand-new will.
Trusts
Similar to wills, a trust may become dated after a divorce and require updating. For a revocable trust, this is generally very simple. Individuals must file a trust amendment form to adjust and change the terms of a trust document. This may require a fee or other legal actions to carry out.
However, this becomes more difficult in the case of an irrevocable trust. These trusts can be changed or annulled, despite the name, however the process is much more difficult. According to S.C. Code § 62-7-411, an irrevocable trust may be terminated or modified with court approval if all beneficiaries and grantors agree to the change, and that change is consistent with the purpose of the trust.
For more detailed steps on how to update estate plan documents post-divorce, consider speaking with an experienced South Carolina estate planning attorney.
Steps For Updating Estate Plans After Divorce
There are several steps involved in revisiting estate plans post-divorce, and many of these steps will vary depending on the circumstances of the divorce.
Revise Wills and Trusts
The first step to be aware of in updating an estate plan post-divorce is to update wills and trusts. As previously mentioned, many wills and trusts will default to a surviving spouse or the original beneficiaries if left unattended. By revising and adjusting these documents post-divorce, the testator can ensure their wishes are held to.
Update Powers of Attorney
Another facet of estate planning that may need revising is powers of attorney. Power of attorney allows an individual to act on behalf of another in the event they are unable to express their wishes. This power of attorney can extend to financial, medical, and legal action, and may need to be updated in light of a divorce.
Reassess Guardianship Designations
If the individual has minor children or children with disabilities, their will may also include provisions for these children. Specifically, many people will appoint legal guardians if they should die before their children are of age. Some may wish to change these designations in the event of a divorce, depending on the specific circumstances surrounding them and their ex-spouse.
Change Beneficiary Designations
Other estate plan documents may include retirement plans, life insurance policies, and other accounts with beneficiary designations. These may not be covered or addressed in the terms of a will or trust and may require separate adjustments for beneficiary designations to ensure the proper distribution of assets.
Dying Intestate Before Divorce is Finalized
During the process of a divorce, some may wonder what happens if one dies intestate before a divorce is finalized. Dying intestate means that one has died without a will. The South Carolina Legislature states that the intestate share of the surviving spouse is the entire estate or one-half if there are surviving children.
Even if a divorce is in progress, the court still recognizes that the couple is legally married, and therefore the spouse is entitled to their share. Despite the wishes of the would-be testator, the laws of the land prevented them from distributing their assets according to their wishes. This is why having an up-to-date estate plan can help provide peace of mind in an end-of-life situation.
Contact a South Carolina Family Attorney Today
Understanding how to update an estate plan post-divorce can help ease the burden of a generally stressful and emotionally challenging process. Some may feel overwhelmed by dealing with wills, trusts, and legal documents in the wake of such a significant life change. However, while estate planning can be easily overlooked or forgotten, it is an essential part of moving forward and leaving a legacy. For more information on the process of updating estate plans post-divorce, consider speaking with a skilled family law attorney from King Law Offices by calling (888) 748-KING.