The logistics of filing a divorce brings about many considerations, including the division and allocation of finances and assets, as well as updating beneficiaries and guardianship designations for minor children. While this process may be overwhelming, you do not have to go through it alone. Employing the guidance and expertise of a qualified and caring Michigan estate planning attorney, in addition to your divorce lawyer, can help in making confident and informed decisions about planning your estate after a divorce.
Estate Planning and Divorce Considerations in Michigan
It is helpful to understand how assets are typically divided during a Michigan divorce. Under Michigan law, the court seeks what’s known as an “equitable distribution” of assets, which does not automatically mean that both spouses will receive an even fifty-fifty split. Instead, both parties, their divorce attorneys, and the judge will strive to secure a division of assets that allows each individual to walk away from the marriage with sufficient assets in order to move into a financially stable post-divorce future. So, how does a divorce affect the estate plan you set up during your marriage? It is important to revisit the estate planning documents you have established to ensure that they align with your needs and goals once the divorce is finalized. Below are just a few things to keep in mind as you review your estate plan during a divorce.
Updating Beneficiary Designations
If you set up an estate plan while you were married, your spouse may have been named as the beneficiary on various accounts (i.e., life insurance policy, retirement accounts, and other assets). However, once your divorce is finalized, you may wish to change this. It’s important to take the time to update your beneficiary designations so that they align with and protect your current wishes.
Appointing New Individuals to Serve as Guardians
If you have children, you may want to update any existing guardianship designations to reflect your preferences after a divorce. For example, if you remarry and you want your current spouse to be the guardian of your children in the event of your incapacitation or death, you should update these legal designation documents to reflect these preferences. Enlisting the support of a knowledgeable and empathetic Ann Arbor estate planning lawyer is the best way to ensure that your wishes and best interests are documented and upheld no matter what the future may bring.
Designating a Power of Attorney
Many estate plans include power of attorney designations. Essentially, this individual is authorized to make important financial or legal decisions on your behalf in the event of your incapacitation. Many spouses assign one another to serve in this capacity, but this may change after a divorce. You should revisit any existing power of attorney estate planning documents to update the designations according to your most current wishes.
Setting Up a Trust After Divorce
There are several types of trusts that can serve as asset preservation tools as part of your overall estate plan. However, in the event of a divorce, you may want to amend the person listed to serve as an executor or trustee of your estate or trust. It is essential that you revise these legal documents to note this change. You can remove your prior spouse and appoint a different individual to fulfill these important roles.
Learn More About Estate Planning During Divorce
It is important to revisit any existing documents regarding your estate plan and beneficiary designations from time to time to make sure they align with your wishes. While this is a healthy practice for anyone to do as the years pass, it is particularly important for those who are moving through the Michigan divorce process to do so. Additionally, it is helpful to understand that some Michigan laws offer some protections to prevent someone from benefiting from the death of an ex-spouse. For instance, Michigan’s “Revocation on Divorce” statute revokes gifts or allocations of property to an ex-spouse in any document (like a trust or will) that was put into place before the divorce is finalized. However, just because these protections are there does not mean that they will automatically reflect your wishes or protect your best interests.
Instead, we recommend taking the necessary steps to review and update the terms of your current estate plan to account for your current situation and goals. To learn more about estate planning and divorce considerations, you can seek the guidance and support of a compassionate and trusted estate planning attorney who can assess the specifics of your situation and provide you with the customized information you need to move forward with confidence.
It’s never too early to put an estate plan in place to protect your loved ones and your legacy. Whether you are just starting to explore your estate planning options or you need to revisit your existing estate plan to ensure that it aligns with your needs, the dedicated legal team at Warren & Schairbaum PLLC is ready to assist you. Please contact our Ann Arbor, Michigan office today at (734) 769-9300 to discuss your goals with an experienced and caring estate planning attorney.