When the divorce process ends, it’s easy to breathe a sigh of relief and enjoy walking away from the tedious paperwork and exhaustive court process, but once the ink dries on the divorce papers, it’s time to take one more essential step to move forward into your new future. If you have a previous estate plan, it’s clear that the goals and outcomes you had in mind when you created it have changed. If you haven’t yet created your estate plan, the aftermath of a divorce is the right time to put a plan in place to protect your assets and your children’s bequests.
Addressing an estate plan soon after divorce is crucial, and some aspects of the plan can be addressed during the divorce process—an advanced directive and power of attorney for instance. However, the state prohibits some legal actions while a divorce is in progress because it means shifting funds away from a spouse before the final judgment on asset division takes place. You cannot hide or transfer property while your divorce is still pending. You cannot fund a new trust for your children during the divorce, create a non-probate transfer of funds, or modify an existing non-probate transfer that directs funds away from your spouse. Judges in Colorado divorce courts take strict actions against those who hide or transfer assets before the finalization of the divorce. Even if it isn’t what you intend, taking actions that might appear to be underhanded to a judge could have serious repercussions on the division of your marital assets.
After a divorce, it’s time to revisit your estate plan and make necessary changes. In fact, many Denver divorce attorneys recommend making some changes as soon as possible during a divorce so a spouse doesn’t inherit if you happen to die before the final divorce decree, as long as the changes do not redirect assets that you must divide fair and equitably with your spouse. It’s also essential to remove your ex-spouse from their position of authority on your advanced healthcare directive so they don’t have the ultimate decision over your life or death.
An estate plan directs the distribution of your assets after you die. After divorcing a spouse, it’s important to remove them as your beneficiary and/or personal representative. The following aspects of your estate plan must be revisited during or after a divorce.
Talk to your attorney about updating the information on all of the above to remove your spouse’s name and replace it with someone you trust, like a sibling or adult child. You’ll probably want to remove your spouse from a beneficiary position in your will so they do not inherit your estate or nullify your will due to the state’s prohibition on ex-spouse inheritance.
If the terms of your divorce include spousal support payments to your ex-spouse, speak to your attorney about including the amount you’ve been directed to pay as a single lump sum payment to the spouse in your will. Otherwise, your spouse may tie things up in court by filing a claim against a portion of your estate in lieu of spousal support payments.
Colorado is one of many states that automatically nullifies bequests to an ex-spouse if an individual dies without updating their estate plan after a divorce. The state revokes any inheritance directed toward an ex-spouse so you don’t have to worry about your ex inheriting your estate; however, because this leaves a vacancy in an un-updated will, the state’s intestacy laws take effect to distribute your assets to your surviving family members which means your estate may not be passed on the way you’d prefer unless you make the necessary changes.
If you do wish to leave a bequest to an ex-spouse, you may still do so, but the fact that they are your ex-spouse must be included in the language of the will to avoid any conflicts.
If you are the custodial parent or the sole surviving parent of children from a previous relationship, you probably named your spouse as their legal guardian in the event of your death. If so, this is probably something you now wish to change unless you still feel that your ex-spouse is the person you trust with their care.
If you have a living trust in place with your ex-spouse as the trustee, you’ll need to reevaluate it after a divorce so your ex-spouse isn’t in charge of your children’s inheritance and in control over your assets.
If you didn’t have a trust before your divorce, after a divorce is a good time to speak to your Denver family law attorney about setting one up to ensure your children receive the inheritances you want for them and that guardianship is in place should you die or become incapacitated while they are still minors. A revocable living trust (RLT) with someone other than your ex-spouse as trustee can designate specific amounts toward your children’s education, extra-curricular activities, a car when they’re of age, and other timed bequests after your death or incapacitation so your ex-spouse isn’t in charge of deciding how the children’s funds are directed after you have passed.
An estate plan is the best way to ensure that everything you’ve worked for throughout your lifetime ends up where you intend after your death or incapacitation. Divorce causes a major upheaval in these plans. Before you decide to make changes, you’ll need skilled legal counsel. The attorneys at Ciancio Ciancio Brown, P.C. have decades of experience guiding our clients through these important changes so they can move forward in a positive way after their Colorado divorce. Contact our experienced team today.
