We live in an ever-changing world. Those changes continue to present obstacles for businesses and industries around the world. Estate planning is no different. Children are teaching older generations how to live more freely, and it seems parents are learning the lesson in ways no one predicted. For example, senior citizens are far more likely to get a divorce in 2020 than they were only a decade or two ago.
Estate planning is all about making complex decisions regarding retirement, choosing beneficiaries, and disseminating assets. When two parties make these decisions together but then choose to divorce, the consequences cause a ripple effect for estate planning attorneys. Sorting out the messes isn’t always easy!
This is in part because divorce is rarely mutual. Even when spouses are in agreement that a divorce is in the cards, rarely are they in agreement about how to divide a lifetime worth of assets. You can imagine how much easier it is to do for 20 or 30-somethings who haven’t always made big purchases or had children together.
A survey was conducted by TD Wealth (for TD Bank) in order to measure the time and money committed to making decisions after these “gray” divorces (those that occur after the age of 50).
TD Wealth Head of Private Trust Ray Radigan said, “As a result of the growing divorce rate, it’s more important than ever to proactively review and discuss estate plans with clients and their families on an ongoing basis.”
What should you do when you plan to divorce after 50? First, you need to communicate your wishes to your soon-to-be ex-spouse. That might not be easy, but these are decisions you will inevitably have to make together anyway, or through arbitration if it comes down to that. Next, you’ll probably want to let potential beneficiaries how they could be affected.
Be sure to name a new health care proxy if the task had been assigned to your spouse. It’s probably not a good idea to have someone who might benefit from your death in control of whether or not to pull the plug! The same goes for the power of attorney.
State laws will most often determine how previously made agreements can be amended. Speak to your estate planning lawyer as soon as you make the decision to divorce to obtain as much information on the subject as possible.
Spouses also have legal rights to certain aspects of inheritance, and you should know what they are. Failing to leave a spouse what they are entitled to will mean a visit to court for whomever you leave behind — and you don’t want to do that to your friends and family.