Nobody marries with the expectation that the marriage will fail. Yet, in Ohio, studies show that approximately one in three marriages ends in divorce within the first 10 years of marriage. Given such odds, it is important to assess the effect of a divorce on your estate planning.
Ohio, like most states, has laws that address some estate planning issues following a divorce. Ohio law provides that if a person who executes a Will reaches a settlement of property rights following a divorce, annulment or separation, "any disposition or appointment of property made by the Will to the former spouse … shall be revoked."
This largely eliminates the possibility that the former spouse will inadvertently receive benefits under the Will, but it is still a good idea to update your planning following a divorce or dissolution and there remain important reasons to execute a new Will or Revocable Trust after divorce. For example:
Similarly, reevaluate the appropriateness of the alternate guardian and trustee nominated in the existing Will, particularly if that is a relative of the former spouse who may not ensure that the child has ample time with the deceased parent's family members or expends assets on behalf of the child consistent with your wishes.
Depending on the terms of the Decree of Divorce or Dissolution, the divorcee may be able to change beneficiary designations using change of beneficiary designation forms. Typically, the former spouse would be the named primary beneficiary for life insurance policies, annuities, revocable and other trusts, health savings accounts, employment death benefits, IRA, Keogh, and other retirement accounts (including employer plans). These beneficiary designations should be changed and updated if the Decree of Divorce or Dissolution permits changes.
Also, a divorcee should obtain new deeds, titles, or registration for assets that are no longer jointly held (for example, real estate, vehicles, stocks and bonds, and joint bank and brokerage accounts, including those designated Transfer on Death [TOD] or Payable on Death [POD]). This will ensure that the former spouse is not the surviving beneficiary of these assets. Beyond a Will or Trust, a divorcee should execute a durable power of attorney for managing financial affairs, a living will and a health care power of attorney, so that an agent is designated to help in the time of need.
Divorce or dissolution of marriage does not change the goal of estate planning: to draft documents and to title property so that the property passes to your intended beneficiaries. David H. Lefton, can help you review and address all the important considerations following divorce and ensure that your loved ones will not have to cope with some very difficult issues.
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