Pre and Post-Divorce Estate Planning Checklist

Here is a quick checklist of pre- and post-divorce estate-planning tasks to consider 

Initial Checklist

During initial separations, estate-planning tasks include the creation of a formal separation agreement that establishes your rights in the relationship as they pertain to debts, property, alimony, and child support.

Such a separation agreement should also be made binding on heirs. The separation agreement should outline any minimum will provisions in favor of children of the marriage. Also during the separation, if death occurs, the remaining spouse must be sure to be named as such on the death certificate.  And in that same vein of thinking, during the separation, advisors may help you check and change, as needed, all named representatives and beneficiaries on estate planning documents, including identified trustees, executors, and recipients of power of attorney.

Follow Up

After the divorce, plenty of items remain on the checklist too. By then, the estranged spouse should be removed from all the representative and beneficiary slots. Be aware: After a divorce, some states no longer recognize a pre-divorce will unless it is ratified after the finalization of the divorce.

Also, you need to consider the estate and gift tax benefits you will lose when your marriage ends. You will lose a marital deduction for their estate taxes. As a result, if your total individual assets exceed $5.43 million in 2015, the amount allowed before federal estate taxes are triggered, you may want to purchase wealth replacement insurance to cover potential estate taxes due upon their death.

Another possible unpleasant surprise to avoid: Money paid by an estranged spouse for children's education is considered a gift for tax purposes. Have the estranged spouse pay the expenses directly to the educational institution, which will not trigger the gift tax.

If you are contemplating, going through or finished with a divorce and you need to create a new estate plan, please contact my office by clicking here. Sallen Law, LLC proudly serves Philadelphia, the Main Line, Montgomery County, Chester County, Delaware County and Bucks County as well as southern New Jersey.