By Lindsey A. Kujawa, Partner, Attorney, & Mediator
If you are going through the financial and emotional turmoil that typically accompanies divorce, creating or updating your estate plan may be the last thing on your mind. To avoid litigation (and serious unintended consequences), you need to be aware of the practical implications of divorce on estate planning and powers of attorney.
It is important to maintain valid financial and health care power of attorney documents. These documents ensure that, if you become incompetent, the person you appointed to act as your agent can make financial and health care decisions on your behalf. A common misconception is that the filing of a divorce action invalidates all estate planning involving your soon to be ex-spouse. In fact, however, the filing of the divorce only terminates a spouse’s authority under a financial power of attorney; the healthcare power of attorney authority continues until the divorce is final. A soon to be ex-spouse retains the authority to make medical decisions on your behalf (if you’re incompetent) while the divorce is pending. Therefore, when you make the decision to file for divorce, you also need to execute new financial and healthcare powers of attorney nominating agent(s) of your choosing.
Creating a new estate plan is essential to clarify your goals and avoid passing issues onto your children. Wisconsin is a marital property state which presumes that all property (except gifted and inherited property) is divisible in a divorce. The statutes direct whether a will, trust or beneficiary designation on life insurance or investment and retirement accounts executed pre-divorce remain valid during and after a divorce is finalized. Rules vary and you should make decisions with the assistance of a lawyer to be certain your directives about assets are clear.
Many divorce agreements contain obligations for division of property upon death. For example, it may require one or both spouses to maintain a certain amount of life insurance coverage with designated beneficiaries (the former spouse or children) or create provisions in a will or trust. A skilled estate planning lawyer will help you effectuate your goals while maintaining compliance with your divorce agreement.
Legal and financial expertise will help you make the best decisions for yourself and your family. Attorney Lindsey Kujawa at Hansen & Hildebrand, S.C. recognizes the impact that a divorce can have on an estate plan. Her dual expertise in divorce and estate planning assures personalized and cost-effective legal services. If needed, she will partner with your financial advisor to be sure you have the education needed to make informed decisions during these life transitions. Attorney Kujawa assure your wishes are properly implemented and help you avoid a legacy of conflict.