Estate planning issues for divorced women

Joan was married to Ed for 10 years and had four children. They divorced and the divorce decree stated that if Ed preceded Joan in death and he still owned their marital home that she would acquire ½ interest in the home and the other ½ interest would go to their four adult children (split on a pro rata or even basis). Subsequently, Joan married Steve who had no children. Ed died, Joan entered into a real estate contract to sell the property. Joan died intestate or without a will. Therefore, all of her assets would be split between her current spouse and children. Joan’s children did not get along with Steve and did not want him to get anything from the proceeds of the house. However, they wanted the house to be sold. In the end, the children and spouse came to an agreement as to how to split the proceeds and the house was sold. Instead of taking time to grieve the loss of their mother and spouse, her family was fighting over assets.

Divorce in and of itself is a traumatic experience for most people. Even in circumstances where it is clear that divorce is the best option, it is still challenging emotionally, spiritually and financially. It is imperative for women, particularly women with assets, to seek the advice of experienced professionals for guidance through this life-changing experience.

One should retain a divorce attorney or family law attorney to provide guidance on custody, child support, the division of marital assets and other issues. An estate planning attorney could also provide guidance on asset protection and other financial issues which arise as a consequence of the divorce. Many attorneys are willing to work together to provide the best plan.

One should review estate planning vehicles which one has already prepared prior to the divorce. Some examples which should be considered are as follows:

• Wills

• Revocable Trusts

• Irrevocable Trusts

• Health Care Power of Attorney

• Power of Attorney for Property

• Health Insurance Portability and Accountability Act of 1996 (HIPAA) form

• Transfer on Death Instruments (TOD)

• Payable on Death Instruments (POD)

• Life Insurance

• Employer sponsored retirement plans (pension or 401 k plans, profit sharing plans)

• Individual Retirement Account (IRA)

• Annuities

• Health Savings Account

• Living Will

Some of the aforementioned documents/vehicles may allow the designation of beneficiaries. Beneficiary designations allow the ownership interest to pass to the named beneficiary automatically upon one’s death. For example, one can name beneficiaries in payable on death and transfer on death instruments, land trusts, trusts, pension, profit sharing, life insurance, annuities, Individual Retirement Accounts, and employer-sponsored plans. It is imperative to revisit the designation of beneficiaries if one is planning a divorce because the aforementioned vehicles allow the asset to automatically transfer upon the individual’s death. If the current spouse (or anyone else who has been named) is the designated beneficiary and this is not changed, then despite the divorce, that spouse may inherit the funds from those assets.

The aforementioned may be the same in the case of other estate planning vehicles as well. When one is planning to divorce, one should review Wills, Trusts, Revocable Trusts, Health Care Powers of Attorney, Financial Powers of Attorney, Living Wills, to ensure that those documents reflect the client’s goals and objectives. It should be noted that in some estate planning vehicles, the term “spouse” is defined as the current spouse. However, this may not be the case in all circumstances. Therefore, each vehicle must be reviewed and in many cases revised.

In the case of divorcing parents of minor children, other considerations may apply. One must consider guardianship and whether the other spouse would be an appropriate guardian in the case of death or disability of the custodial parent or the surviving parent. A Revocable Living Trust may be an appropriate estate planning vehicle to set up for minor children for college tuition and other expenses.

The role of the estate planning attorney is to determine the client’s goals and objectives and advise the best estate planning tools to satisfy those goals and objectives. All women whether single, divorced or married should have basic estate planning documents in place. At the minimum, everyone should have a will or living trust, health care power of attorney and financial power of attorney. In the case of any major life changing event, all estate planning vehicles should be reassessed to determine if they still apply to the client’s current circumstances.

In sum, when you are planning to divorce or going through a divorce, you should:

1. Meet with a divorce or family law attorney;

2. Meet with an estate planning attorney;

3. Review your estate planning documents and determine if you have the appropriate beneficiary designations;

4. Review your estate planning documents to determine if you have the appropriate agents for powers of attorney, trustees, and executors;

5. If you have minor children, make sure that you have named appropriate guardians and successor guardians;

6. Make sure that you have prepared the appropriate documents so that the guardians have access to finances to care for your minor children;

7. Make sure that you have considered the divorce decree and whether it will have an impact on your current estate plan. In some cases, a divorce decree may have occurred years ago. The previous spouse may have died and if you remarry, the divorce decree may impact the distribution of assets from your first marriage. A divorce decree will not affect joint tenancy. Joint tenancy, or co-ownership exists where individuals have an equal amount of possession such as real estate. When one joint tenant dies, the other joint tenant owns the property in its entirety.

8. Keep all of your documents in a secure place and notify the appropriate individuals—agents, executors, trustees and guardians as to their locations and provide them with an updated copy of all estate planning documents.

Finally, if you have no estate planning tools at all, some of your assets may pass through probate through the laws of intestacy of the appropriate state upon your death. All estates must go through a process of estate administration in order to transfer ownership of assets.

Going through a divorce is not something most people plan for at the beginning of their nuptials. However, with proper planning one can make a fresh start and begin a new life.


Sonia D. Coleman, is Principal and Founder of the Law Office of Sonia D. Coleman, PC. Ms. Coleman counsels and advises clients in the areas of estate planning, probate, real estate, corporate and employment law. The contents of this article are for educational purposes only and are not meant to be a substitute for legal advice or to be comprehensive. Please consult with your family law attorney, estate planning attorney or other professional for help with your specific circumstances.

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February 2017Volume 22Number 4PDF icon PDF version (for best printing)