Divorce and Estate Planning

    Obtaining a divorce judgment closes one chapter of a person's life, and it also opens another. It is important to be prepared for that new chapter. One of the essential matters I counsel my clients about, early in the divorce process, is the absolute necessity of updating an estate plan to reflect the change from married to single.
    Kari Kennedy, a 32 year old social worker living with her husband and two children in Texas, is the unfortunate victim of  her late father's failure to make the type of beneficiary changes necessary to protect his intent that his daughter Kari receive his retirement benefits upon his death. The case has now wound its way all the way up to the United States Supreme Court , where Kari is arguing that her late father's failure to follow the strict letter of the law in changing beneficiary forms should not prevent his intended estate plan. She is arguing that other evidence (a waiver signed by her now deceased mother) demonstrated that Kari was the intended recipient of her father's retirement benefit. This type of ugly family litigation can be avoided by ensuring that your divorce attorney works with your estate planning attorney to implement your intent in distribution of your estate after your divorce.
    I recommend that divorce clients consult with an estate planning attorney during the divorce process, and treat the planning as part of the transition from married to single, rather than waiting until the divorce is finalized. This is always important, even if there are no children. Without a new or revised estate plan, your estranged spouse - and yes, even your ex-spouse - could end up with all your property and assets. Also, consider whether, during the divorce process, you would want your estranged spouse making medical decisions for you should something unfortunate happen and you are unable to make those decisions for yourself. In other words, some estate planning changes should be implemented during the divorce process, and some after the divorce is finalized. The only way to ensure you are protected is to consult with an estate planning attorney during the divorce process itself, and then to follow-up on implementing a completely new estate plan upon completion of the divorce process. Your estate plan should include medical power of attorney, decisions regarding how to designate life insurance benefits after divorce, whether you should implement a living trust, and even the necessity for guardianship provisions through a will. Of course, it is always important to ensure you have changed beneficiary designations on pensions, 401k and other retirement savings accounts.