When a person gets divorced, they may focus on areas of immediate concern, such as child custody, alimony or child support. However, it is important to consider your estate in light of the recent change in circumstances.
In Texas, the courts generally do not acknowledge an ex-spouse in matters of estate. The former spouse is no longer in control of the estate even if they were named as a power of attorney or in other positions even if the documents were never updated. However, this may not be the case in certain instances.
If the estate was set up with an irrevocable trust, all provisions may still stand. If neither adult has access to the trust, it will continue as before. If the couple does have access, the courts may require the trust to be closed with the only access given to the beneficiaries. In this situation, the children are protected and the adults are prevented from abusing the trust.
The couple may dissolve the trust and divide the assets in a revocable trust. They may also choose to amend the trust. These actions are usually handled as part of the divorce. If the trust was designated to go to a spouse, it will go to the listed person. If both people were listed, the assets will be included as part of the marital assets.
Advanced Directives and Power of Attorney
Most couples designate each other to manage their financial and medical affairs if they become incapacitated. While the courts may automatically ignore such designation if the couple have divorced, it is important to update the paperwork and create a new designation.
You can prevent future issues by dealing with the possibility of divorce when you create your estate plan. While no one wants to consider divorce in a happy marriage, the high divorce rates require you to think about the possibility. You can designate what happens to your plans in the event of a divorce. In certain situations, such as managing a child’s benefits, you may want to allow your spouse to continue as established. In other situations, you may name a secondary person.
No matter what point you are at in your life now, whether you are drawing up an estate plan or getting a divorce, you should work with a professional estate planner. An attorney experienced in estate planning can advise you on the best course of action to protect your interests.