Estate Planning During and After Divorce

Attorney Stephen A. Lasky
Moertl, Wilkins & Campbell, S.C.

Divorce can impact nearly every facet of your life. With so many important and challenging issues to address both during and after a divorce, it comes as no surprise that updating your estate plan can seem like one of those tasks that can wait until the divorce is complete and life begins to stabilize. However, if you become incapacitated or pass away during or subsequent to a divorce proceeding and you do not have an appropriate estate plan, events may unfold in a manner very different than what you would wish or intend. This can leave a legacy of conflict rather than a smooth implementation process.

As an initial matter, it is important for you (and all adults) to execute both financial and health care power of attorney documents. These documents ensure that, if you develop an incapacity, the person or persons you have appointed to act as your agent(s) can step in to make financial and health care decisions on your behalf. Married individuals most commonly appoint or nominate their spouse to serve as their agent (depending on their own family circumstances, they may also appoint a relative of their spouse to serve as a backup agent in the event their spouse cannot act).

If you are in the process of divorce, or if you have completed a divorce, it is unlikely that you want your ex-spouse (or soon to be ex-spouse) and/or his or her family members to act as your agent under a power of attorney document. While it is possible that the appointment of these individuals will be revoked by operation of law, this creates undesirable uncertainty and complication. Further, if you have no one else (i.e. other than your ex-spouse) appointed under your power of attorney documents to act as agent, a guardianship court proceeding may be necessary to have a judge appoint a decision-maker in the event of your incapacity. Therefore, as soon as you make the difficult decision to commence divorce proceedings it is very important that you execute new financial and health care power of attorney documents that nominate agent(s) of your choosing who are appropriate to your new circumstances.

Creating a new estate plan is also very important. As you may be aware, Wisconsin is a marital property state. Amongst other things, this means that there are rules in the statutes that govern issues such as whether and to what extent a Will or other testamentary document (such as a trust or a beneficiary designation on a life insurance policy or retirement account) executed prior to divorce remains valid during and after the divorce is concluded. The application of these rules vary by circumstance (such as whether you have children with your now ex-spouse or whether you subsequently remarried following your divorce), and it can be difficult to determine the application of these rules to your specific situation without the assistance of an attorney.

Further, the terms of your divorce judgment or marital property settlement may impose upon you certain restrictions or obligations with regards to the disposition of some or all or your assets in the event of your death. For example, it is not uncommon for the terms of a divorce agreement to require one or both spouses to maintain a certain amount of life insurance coverage on their lives and to designate one or more specific individuals (such as the couple’s child or children) as the beneficiaries on any such insurance. If you attempt to alter your estate plan in a way that might violate your obligations under the terms of the divorce agreement, your ex-spouse may be able to invalidate any such change following your death, thereby frustrating your testamentary wishes.

For these reasons, it is very important that you sit down with a qualified estate planning attorney both during and subsequent to your divorce to make sure that your plan is both enforceable and accurately reflects your current wishes in light of the totality of your circumstances. As your life continues to change and evolve following a divorce (for example, if you or your ex-spouse remarry), it will be important for you to revisit your estate plan with your attorney to make sure that, in the unfortunate event of your passing, your wishes will nonetheless be carried out and your loved ones will be taken care of in the manner in which you intend.

Attorney Stephen A. Lasky is a partner at the law firm of Moertl, Wilkins & Campbell, S.C. where he focuses on providing his clients with cost effective and personalized legal services in the areas of estate planning, probate and trust administration, elder law and closely held business matters. Stephen is honored to have been recognized as one of Milwaukee’s best estate planning attorneys by receiving both the Five Star estate planning attorney award and the SuperLawyers Rising Star award in multiple years. For information about Moertl, Wilkins & Campbell, S.C. please visit www.lawmwc.com or contact Stephen at 414-276-4366 or slasky@lawmwc.com.

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