During the happy times of a marriage, couples very often make reciprocal wills that are the mirror image of one another: Rufus leaves all his goods to Rhonda; Rhonda leaves all she has to Rufus. After their marriage is history, it is not sufficient for Rufus and Rhonda to rip up on their wills and walk away. Ripping up their wills may make them feel good, but destroying their wills leaves them intestate. When a person dies without a last will, his or her property is divided under the laws intestate succession of the state of residence. This can slow the distribution of property to heirs, which may be Rufus’s and Rhonda’s children.

The laws of intestate succession -- the law of intestacy, as it is called -- vary from jurisdiction to jurisdiction. These laws generally favor the spouse, children and grandchildren and then parents and grandparents, then brothers and sisters. Relying on this is not wise. There have been many cases of legal battles between current and former spouses about a decedent’s intent to leave money. Legal battles like this are guaranteed to make lawyers richer and heirs (often children) poorer.

Normally, a will is a very easy legal instrument to prepare. It is a small expense that can prevent much bigger ones later.

In some states, a divorce voids the provisions to an former spouse made in a will; in some states it does not. Even when a person may, for one reason of another, wish to leave property to a former spouse he or she should rewrite his or her will and make a clear statement to this effect.

Moreover, even though spouses are divorced, they have to make arrangements for the care of their children in the event of their demise. This means writing or rewriting any trust agreements for the benefit of children.

It may seem darkly comic, but a person on the rebound from a divorce has at hand everything he or she needs to do estate planning. It is all the same financial information used to prepare a property settlement. On the asset side, this includes, but is not necessarily limited to, everything a person owns; on the liability side, it means everything a person owes. This means, one the asset side, checking and savings accounts, mutual funds and money market accounts; real estate records, including the marital home and second homes and unimproved land; personal property, such as automobiles, furnishings, collections (art, stamp, coin); stocks, bonds, annuities, retirement plans, including pensions and profit sharing; accrued vacation time, medical savings accounts; other valuable personal property, life insurance and season tickets; and on the debt side, this includes, but is not necessarily limited to, records of credit cards, vehicle loans, mortgages and home equity loans, promissory notes, student loans and other debt.

Basically it is the same information a person needs to do financial planning for the so-called golden years.

Estate planning for the divorced may be complicated by the fact that some assets, such as pension, are now encumbered, but a lawyer specializing in wills and estates negotiates these difficulties.

One benefit of doing the financial planning in the aftermath of divorce is that the individual will have a very clear understanding of his or her financial position in the wake of the breakup.

See also Intestate.

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1. Estate Planning Issues to Keep in Mind
   You may have had a will drawn up during your marriage, or perhaps a revocable living trust. Both of these documents may have named your spouse as either a personal representative or successor trustee. Your ex-spouse may also have been named as the agent in fact in your Durable Power of Attorney. There may also have been children involved. It’s important to consider these issues and others while deciding to update your estate planning documents. You’ll want to meet with your estate attorney and discuss your next steps. Don’t forget to take this important step in moving ahead.
   Contributed on 1/6/2010 by: Brian B. Rockwell, CFP®, CDFA™, ChFC®New Port Richey / Trinity, FL[Total Submissions: 5]

   Category: Estate Planning  (Applicable in All States)

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