Going through divorce can be very difficult, stressful and painful, so it is not uncommon for divorcing parties to neglect their estate plan. But what would happen if you died during the divorce process or shortly thereafter? Who would make healthcare or financial decisions for you if you were incapacitated during a divorce proceeding? Who would receive your share of the marital estate? Who would care for your children? For most people, these questions would create additional unwanted anxiety. However, with some simple planning, these concerns can be extinguished. Here are five estate planning tips for a person going through a divorce or for someone who recently divorced:
1. Change your power of attorney for health care.During marriage, most people draft powers of attorney for health care (and finances) designating their spouse as the primary agent. This would allow the spouse to make health care decisions if the party is unable to do so. Under Wisconsin law, if your spouse is your agent, then they remain as your agent until judgment of divorce is granted. For someone going through a divorce, they would probably cringe at the thought of their soon-to-be ex-spouse making health care decisions for them. It is a good idea to revoke the previous power of attorney for health care and execute a new power of attorney for health care with new agents chosen by you to make health care decisions if you are unable to do so.
2. Change your power of attorney for finances.Similar to the power of attorney for health care, if you and your spouse drafted a power of attorney for finances during your marriage, it is very likely that the primary agent is your spouse. Under Wisconsin law, if your spouse is your agent and a petition for divorce is filed, then your spouse can no longer act as your agent. While this alleviates the concern of the spouse acting contrary to your interest, it does not provide for another agent to act for you. It is a good idea to revoke the previous power of attorney for finances and execute a new power of attorney for finances with new agents chosen by you to make financial decisions if you are unable to do so.
3. Draft a living will.A living will is a document that declares whether or not you would like life sustaining procedures instituted in the event that you have a terminal condition or have a permanent loss of consciousness. If you do not revoke the health care power of attorney as suggested above, your spouse may be able to make decisions regarding whether or not you receive life sustaining procedures.
4. Draft a new last will and testament to designate guardians for your children.While your soon-to-be or ex-spouse is the most likely candidate to be the guardian of any minor children, I recommend that the client choose new guardians listed in a last will and testament. In the event that your spouse is deemed unfit to care for the children or was to die, then the designation of new guardians in your last will and testament would serve as evidence of your wishes regarding who should be the guardian of your children.
5. Draft a trust for the benefit of your children.For many divorcing couples, financial concerns are the cause of divorce. Under Wisconsin law, if you were to die during a divorce, your estate would pass according to your current estate plan. Typically, this would give your estate to your currently divorcing spouse. However, with a properly drafted revocable trust and last will and testament, if you were to die during divorce your estate plan could divert some of your estate (you cannot completely disinherit a spouse under Wisconsin law) to a trust for your children’s benefit. The trust could list persons other than your ex-spouse as the trustee to manage the assets on the children’s behalf.
It is important to discuss whether or not to make changes to your estate plan with your divorce attorney and estate planning attorney. If your divorce is already pending, there may be temporary orders in place preventing you from making these changes. If there is not, these simple tips could help protect your estate and your children if tragedy was to strike.
If you have questions about estate planning considerations and your divorce, please contact a member of the Stafford Rosenbaum Trust and Estates team.