The importance of revisiting estate plans following a divorce

On Behalf of | Jul 12, 2019 | Trusts |

About half the marriages in Georgia and around the country end in divorce, which means that blended families are extremely common. Divorced spouses who remarry should revisit their estate plans regularly because failing to do so can have dire consequences. Disputes between heirs are often contentious, but they may be particularly bitter when children from multiple marriages are involved.

Failing to update an estate plan after a divorce can result in an ex-husband or wife inheriting assets that a testator may have preferred go to the person to whom he or she was married when he or she died. In addition to revising estate planning documents, individuals who divorce may wish to update the beneficiaries on insurance policies and retirement accounts. The passwords that provide access to digital assets should also be changed.

Incorporating trusts in an estate plan is a prudent step to take when testators have blended families. Trusts offer tax benefits and allow estates to avoid the probate process, but they can also establish rules for how assets are distributed to ensure that children from different marriages are taken care of. An AB trust could be set up that leaves assets to a new spouse and then passes them to children when that spouse dies. This could prevent children from an earlier marriage being excluded. Testators may also place their assets into several trusts that each have specific rules for distribution.

Attorneys with estate planning experience could explain the benefits of structuring an estate plan around trusts and steps that may be taken to prevent disputes between heirs. Lawyers could also help individuals choose trustees who may be relied upon to see that their wishes are carried out. Trusts can be particularly useful when heirs have had prior trouble managing money or are struggling to overcome problems with drugs or alcohol.

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