Estate Planning And Insurance Concerns When You Divorce

Estate Planning And Insurance Concerns When You Divorce



If you​ are getting a​ divorce from your spouse,​ you​ have a​ lot of​ planning to​ do. you​ will need to​ name your own beneficiaries,​ organize your divided assets,​ and set up your individual estate.

It is​ important that you​ meet with a​ qualified attorney to​ discuss the​ specifics of​ planning your estate to​ ensure that your wishes are carried out as​ you​ desire. you​ need to​ be well versed in​ the​ most strategic methods of​ dividing your joint estate so that you​ do not end up paying all of​ the​ taxes while he or​ she enjoys the​ benefits of​ your assets.

I have outlined some important information for you​ to​ be aware of​ when planning your estate after your divorce. Please keep in​ mind that divorces lend themselves to​ new structures for individuals. you​ will want to​ meet with a​ qualified attorney to​ discuss how to​ best protect your new estate.

Assigning Your Beneficiary
During your marriage,​ chances are your spouse was the​ sole or​ major beneficiary of​ your estate. After your divorce,​ it​ is​ important that you​ designate a​ new beneficiary on​ all of​ your documents and for all of​ your accounts.

The federal law called ERISA pre-empts state laws that automatically remove an​ ex-spouse as​ the​ beneficiary of​ retirement plans. Therefore,​ it’s important that you​ remove the​ ex-spouse as​ the​ beneficiary unless you​ wish for him or​ her to​ remain as​ your designated beneficiary.

Please note: Once you​ re-name your beneficiary,​ it​ is​ possible that your ex-spouse will still retain the​ rights to​ part of​ your retirement benefits that you​ accrued during the​ time of​ your marriage. I recommend consulting with a​ qualified estate planning attorney to​ determine just how much of​ your benefits and estate will be designated to​ your ex-spouse after your divorce.

Dividing Your Assets
During the​ course of​ your divorce,​ you​ and your ex-spouse determine how your joint estate will be divided. Take a​ minute to​ review a​ few assets that you​ will need to​ divide: 1) appreciated assets,​ such as​ mutual funds,​ and stocks; 2) real estate,​ including investments,​ repairs,​ insurances and mortgages; 3) personal property,​ such as​ jewelry,​ artwork and clothes; 4) retirement plans,​ such as​ qualified plans and IRA’s; and 5) your home,​ which can be divided in​ different ways to​ meet both parties’ financial needs.

Establishing a​ Trust
Many people will create a​ Trust to​ ensure that a​ designated Trustee will have control over funds after death. There are three Trusts that you​ can explore when planning your estate:

1. the​ Revocable Living Trust helps you​ avoid probate by allowing your Trustee to​ distribute your assets according to​ the​ instructions that you​ have outlined.
2. the​ Children’s Trust allows you​ to​ designate funds that your child will use later in​ his life to​ pay for his education,​ home,​ etc.
3. the​ Irrevocable Life Insurance Trust,​ otherwise known as​ “ILIT”,​ allows you​ to​ distribute the​ death benefit estate tax-free when and how you​ want,​ even long after you’re gone.

Divorce is​ never easy. It’s typically a​ very long and arduous process as​ both parties work to​ get their portions of​ the​ shared assets. if​ you’re going through a​ divorce it​ is​ important to​ speak with a​ qualified attorney who can walk you​ through all of​ the​ tax and asset considerations that you​ need to​ be aware of​ to​ ensure that you​ receive the​ best possible settlement.




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