While it may seem counter-intuitive, an ideal time to consider any potential changes to an estate plan is during a divorce. Missouri residents who are ending their marriage may need to review their plan for any potential holes that may be created after divorce.
One important aspect of estate planning is the creation of trusts. A trust is a legal instrument that transfers ownership of certain property into a trust that a trustee manages for the benefit of the beneficiary. It provides a way for people to transfer assets and exert control over how they can be used after such transfer, unlike by providing assets through a will. Some spouses may establish a trust during their marriage for tax advantages and to help create a clear plan in the event of divorce or death. The spouses may establish a revocable living trust for their children’s benefit. The trust can stipulate arrangements that should be made if certain events arise. For example, a new trustee may be named if one of the spouses dies while the trust is still in effect. The trust can also help determine how trust funds can be used, such as for the education and health of the beneficiaries.
Another important aspect of estate planning is periodically reviewing beneficiary designations on retirement plans and life insurance policies. These may need to be changed during the divorce process.
Many testators name their spouse as the executor under their will. Attorneys may suggest to their clients who are contemplating a divorce that the soon to be ex-spouse should be removed and another trusted party appointed.
Related Posts: Avoiding family feuds over inheritances, It may be time to update will, The role of a settlor in a trust setting, Trusts provide specific benefits within an estate plan
