According to Population Research and Policy Review, past studies have shown a “decline in subjective economic well-being” for both men and women after divorce. The National Institutes of Health (NIH) also notes that senior couples navigating “gray divorces” face particularly devastating financial consequences. At this relatively late stage of life, estate planning becomes increasingly important. As a result, gray divorce can lead to major estate planning implications. That said, couples of all ages should consider potential estate planning consequences when navigating divorce. A conversation with a divorce lawyer in Virginia could prove instructive on this subject, and couples may want to meet with attorneys who also have experience with estate planning. Consider expanding on this dialogue by contacting DiPietro Law Group, PLLC at (571) 626-7389.
What If I Go Through a Divorce Without a Will?
Spouses who have not yet created Wills should do so as soon as divorce becomes an imminent reality. A Will is important in this situation for several reasons. First, spouses should know that under the laws of intestate succession in Virginia, the spouse of the decedent (the person who dies) is likely to inherit most or all of the family estate. Virginia also has a one-year separation period for divorcing parents with minor children. A lot can happen during these 12 months, including the death of a spouse. One might argue that divorcing spouses are often more likely to engage in risky behavior like substance abuse or thrill-seeking activities due to the emotional turbulence of an ending marriage. If one spouse dies during the separation period, their ex could inherit much of their wealth due to intestate succession.
The solution is to create a Will as soon as possible. Once it becomes clear that the marriage is over, consider meeting with an estate planning lawyer and writing a basic Will. This is one of the easiest estate planning documents to create, and it supersedes the laws of intestate succession. With a Will, a spouse can choose to leave their wealth to their children, their parents, a new romantic partner, or anyone else they choose. For more specific guidance based on the unique aspects of each family, consider speaking with DiPietro Law Group, PLLC.
What if I Already Have a Will During Divorce?
If a spouse already has a Will, they should alter it as soon as it becomes clear that their marriage is over. The obvious step is to remove their ex from the Will, choosing instead to leave wealth to children, parents, or other loved ones. If the marriage produced no children, the separation period in Virginia is just six months instead of 12. However, this is still more than enough time for the unthinkable to happen. Divorcing spouses without children might consider leaving their wealth to parents or siblings.
Alter Advance Directives as Soon as Possible
An advance directive allows spouses to make important medical decisions ahead of time. Often, individuals choose their spouses to act as their “agents” or “health care decision makers.” Some might refer to this as a “medical power of attorney” or “healthcare surrogate.” The basic idea is that this “agent” will have the power to make major healthcare decisions if their spouse becomes incapacitated. For many divorcing individuals, the thought of their ex having such decision-making power can be unsettling. This may be particularly daunting after or during a bitter, resentful divorce filled with accusations of misconduct.
If an individual has named their ex as their health care decision maker, they should alter their advance directive as soon as possible. There is no need to wait until after the separation period ends, and spouses can make these adjustments at any time. Advance directives may also involve financial powers of attorney. These estate planning tools are relatively common among high-net-worth individuals and business owners. A financial power of attorney gives an “agent” power over various financial decisions, including business operations, real estate sales, and so on. A divorcing individual may need to alter this estate planning document to take away decision-making power from their ex. If they fail to take this step during or after divorce, their ex could theoretically gain control of their business and their investment portfolio.
What Happens to Life Insurance After a Divorce?
Life insurance is a common and straightforward estate planning strategy in Virginia. Spouses of all ages and backgrounds choose life insurance, which can be relatively affordable (especially at a young age). Professionals earning high or middle incomes often use life insurance to ensure their families will receive financial support if they pass away unexpectedly. Life insurance is also popular among ultra-high-net-worth families, who frequently combine life insurance with trusts to experience various financial benefits. Divorce can complicate these plans considerably, and it is important to understand what happens to life insurance policies in these situations.
Unlike many other states, Virginia does not automatically revoke life insurance policies when spouses divorce. In other words, a policyholder must manually remove their ex from the policy as a named beneficiary during or after divorce. Due to the separation period of up to 12 months in Virginia, it is best to remove an ex from a life insurance policy as soon as possible. That said, courts in Virginia may have the authority to order a spouse to keep their ex on the life insurance policy. This move is usually associated with alimony, and the receiving spouse may remain as a life insurance beneficiary for the duration of their spousal support.
Learn More About Estate Planning After Divorce With DiPietro Law Group, PLLC
The most optimal strategies for both divorce and estate planning depend entirely on the unique circumstances of each family. Each case is different, involving not only varying family dynamics but also different types of wealth. Online research can be a positive first step, but it might not deliver the personalized guidance necessary to address specific concerns. For a more personalized approach, spouses might consider discussing their goals and needs with an experienced divorce lawyer in Virginia. Many of these legal professionals also have considerable knowledge of estate planning. To continue this discussion in more detail, consider contacting DiPietro Law Group, PLLC at (571) 626-7389.
