A divorce is one of the most difficult and stressful things we can go through. Not only can it take an emotional toll, but when sufficient plans aren’t in place, the process can become much more complex. Estate planning might be the last thing on your mind when filing for a divorce, but in reality, if you were to die or lose capacity before the divorce is finalised, your outdated estate plan may not reflect your current wishes. Likewise, if you don’t have a plan in place at all, many of those important decisions will fall to your spouse, even if you’re mid-divorce.
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There are 5 things you need to consider doing as soon as possible if you’re filing or considering filing for a divorce:
- Make/update your Will
You may already have a Will, in which case it is likely that the primary beneficiary would still be your spouse, who you are currently divorcing. If you wish to change this, you should prepare a Will to benefit other family members and any children or dependents you may have. If you are benefitting children under the age of 18, you will need to appoint trustees to manage the inheritance until your children or dependents are old enough to manage their inheritance for themselves. In the content of your Will, you may also appoint a guardian if you or your partner die while your children are still minors.
- Intestacy rules
If you do not have a Will the intestacy rules will apply. Under the intestacy rules your spouse will receive the first £270,000 of your estate with only half of the remainder passing to your children and half to your spouse. Therefore, your spouse will stand to inherit from your estate if you do not have a Will.
- Sever the joint tenancy on the property.
Most married couples own their properties as joint tenants. This means the property will pass automatically to the surviving spouse regardless of what it says in your Will. It is important at the earliest opportunity to sever the tenancy on your property so that you each own specific shares, for example 50% each. This means that you can leave your own 50% share to whoever you want under the terms of your Will.
- Pension & insurance policies
Many married couples have pension policies, death in service and life insurance policies which are usually payable to a nominated individual (usually a spouse) on their death. The total value of these policies can be substantial, into the hundreds of thousands, and therefore what should happen to these policies in the event of your death should not be overlooked. It is possible to create a lifetime trust for the benefit of your children, for example, and the proceeds of these policies to be paid into trust rather than passing to the divorcing spouse. In this situation, you could then nominate the trustees of the trust which you created in your lifetime to receive the proceeds of any insurance policies etc. This trust could then be used for the maintenance of your family rather than to a spouse.
- Review your estate plan post-divorce
The changes you make to your estate plan during the divorce process may only be temporary. It’s vital that you revisit your plan once your divorce is finalised to decide what long-term changes you wish to make.
How a Solicitor can help with divorce
It is important to review your estate planning early in order to ensure that your affairs are in order and that you benefit the appropriate people. At Jackson Lees, our Wills, Trusts & Probate team can assist you with drafting a Will, updating your Will, appointing powers of attorney and estate planning. Get in touch with our experts in our Liverpool and Wirral offices today on 0151 282 1700 or make an enquiry below.