Hollywood screenwriters are clearly masochists. A Hollywood disaster flick will send hordes of zombies into a burning hi-rise orphanage during an earthquake. Estate planning during your Virginia divorce, though? Not even a Hollywood script writer would dare such a thing.

Protecting Yourself on Multiple Fronts

If you feel like your divorce is more than you can handle, you may be robbing your future self of valuable resources. Avoiding estate planning during your divorce could set you on a road to financial ruin. Sure, you and your attorney have your hands full with the separation, property settlement agreement, and divorce filings. You must fight your battles on multiple fronts, however. You cannot overlook estate planning and the necessary changes your divorce will trigger.

Before trying to make massive changes to your estate planning, review your past and your paperwork:

  • Is a prenuptial or postnuptial agreement already in place?
  • Do you know where all your insurance policies are?
  • Are you aware of all the location and contents of your estate documents, including paperwork related to trusts, investments, heirs, end-of-life decisions, and your Last Will and Testament?
  • Do you know who are the beneficiaries of your insurance policies, retirement accounts, IRAs, trusts, and pensions?

Also consider your desired future. If you and your spouse are divorcing amicably, you may want to provide for your ex in your Last Will and Testament, a trust account, or other instrument. You are divorcing, not destroying, each other.

If you have life insurance policies on your children, make certain you determine which of you will continue paying the premiums for them to remain in force.

Green Means Go

By all means, actively work to revise several key parts of your estate plan during a divorce. Always check with your family law attorney and, if necessary, your accountant, but consider these moves:

  • Change your Advance Health Care Directive so that your departing spouse is no longer in charge of pulling your proverbial plug (unless, of course, you are amicably divorcing and feel confident your ex-spouse will make the right critical care decisions for you)
  • Change your Durable Power of Attorney so that, again, your departing spouse is not in control of your finances, should you become incapacitated; select another family member, your accountant, a financial advisor, or trusted close friend
  • Prepare a new Last Will and Testament so that the beneficiaries to your estate are updated to reflect your upcoming divorce; make certain to remove your departing spouse (again, if that is truly what you wish) in favor of your heirs such as your own children, stepchildren, or nuclear family members
  • Establish a new, revocable living trust (with your departing spouse’s approval) out of which you will pay spousal and child support, if necessary; you pay the trust, and the trust pays your ex, which allows the trust funds to go to your beneficiaries unencumbered by probate

Yellow Means Caution

While you and your family law attorney can take many steps to protect your financial future and your estate, you need to tread carefully in three areas:

  1. Retirement Accounts — Have an estate planner examine the retirement accounts for wording on changing beneficiaries; any plans to change beneficiaries must be conveyed to your departing spouse
  2. Insurance Policies — Same as with retirement accounts, you cannot unilaterally change named beneficiaries without informing your ex
  3. Trusts — Do not revoke or alter a trust before the divorce is final, and only revoke or alter it with the advice of an estate planner or attorney familiar with estate law

You can also execute a disclaimer to explain your wishes that certain property be excluded from your estate and not subject to estate tax.

Look at revising any guardianship established under an irrevocable trust. Often, the spouse is named in the trust as your children’s guardian (giving your ex control over their finances until each turns 18). After a divorce, you may not want your ex to continue controlling your children’s finances.

Red Means Stop

For all the careful planning you should take, you and your attorney should also avoid taking a few steps. These are mainly prohibited because you need the consent of your departing spouse, or you need a court order:

  • Do not try to move money, real property, or personal possessions away from your departing spouse
  • Never try to transfer or hide any tangible or intangible assets, even if the asset will later be deemed separate property (not marital property to be equitably divided); even the appearance of hiding something triggers all sorts of unwelcome repercussions
  • Do not attempt to establish a new trust, create a non-probate transfer of assets (revocable trust, life insurance, Individual Retirement Account, etc.), or modify any asset without your departing spouse’s approval
  • You cannot cash out or cancel any insurance policies that may affect calculations of your liquidity when determining child support or spousal support; similarly, you cannot transfer funds out of insurance policies into new accounts (borrowing against a life insurance policy, for example)

Finally, after the divorce is final, revisit everything. Call on your estate planner once more to review all the changes, determine your strongest financial path forward, and ensure your rightful heirs (especially your children) are protected.

Real life is usually a lot more complicated than even the most disastrous disaster movie. Whether you face questions about divorce, separation, estate planning, child custody, or financial stability during your transition from married to single life, The Firm For Men offers answers. We are here for Virginia’s men, so please contact us today or telephone our offices at (757) 383-9184.