Estate planning with a second marriage

A divorce can require significant changes to an estate plan

A divorce case will work many changes in your life and one of the more important is how it will change the relationship between your eventual estate and that of your first wife or children. During your divorce, you should speak with an estate planning attorney if you have a complex estate plan, to ensure that both your divorce settlement and your estate plan say what you wish them to say and that a court will support your wishes.

In California, many of the dispositions of property within a will are revoked by a divorce, unless the will expressly states otherwise. This is typical of most states and in accord with the wishes of most divorcing couples. You do not want your former wife or husband to receive a substantial portion or in many cases, any, of your estate.

The effect of divorce on an estate plan

However, your estate plan, will and any trusts or life insurance must comport with the terms of your divorce settlement. It is important to remember that a divorce settlement is essentially a contract with your former spouse and violations of that agreement open you or your estate to litigation for that breach.

Similarly, legal instruments such as life insurance must be reviewed carefully at the time of a divorce, as they are also a contract between you and the insurance company. Those assets will pass without probate to the beneficiaries indicated, and if you fail to update those contracts after your divorce, your life insurance company would be obligated to adhere to the terms of the contract. They would pay the policy to your former spouse because unlike a will, a life insurance policy is not revoked by a divorce.

But what if you have to?

If your divorce settlement contains a requirement that you are to maintain a life insurance policy of a certain value with your former spouse as a beneficiary, then you must keep such a policy in force.

If you must maintain a policy for your children up to a specific age from your first marriage, you should include instructions in your estate plan that make it clear that even if your current spouse is listed as a beneficiary, the money belongs to the children. If your current spouse would refuse to pay the proceeds over, he or she could be subjected to a lawsuit by the children to enforce the terms of the divorce settlement.

Whom do you trust

If you have children from a first marriage, creating trusts for them in your estate plan is one way to avoid ugly fights between them and your current spouse. A trust can protect the assets you wish to pass to them, and prevent a second spouse from attempting to deny them part of your estate.

This can prevent expensive and contentious litigation that will waste assets of the estate and leave ill feelings all around.

A comprehensive estate plan can ensure that all of your heirs obtain the assets you intend and prevent a divorce from causing a second set of litigation that will benefit no one. So if you are divorcing, be certain your divorce attorney is not the only attorney you receive legal advice from during the process.