How does divorce effect your estate planning?
One of the most overlooked topics when a couple divorcing is estate planning. When a couple gets married and starts a family it is typical for them to worry about an unforeseen accident or death. Couples plan for a Guardian for any minor children and how they want their assets split if one or both meet an untimely demise. If for some unfortunate reason the marriage shall end people often forget about their estate planning in the confusion and emotional state that comes with divorce. However, the following are the key factors that should be addressed:
Last Will and Testament
Your most recently executed Last Will and Testament will determine how your estate is handled. C. § 29-1-5-8 states, in pertinent part, that “[i]f after executing a will the testator is divorced, all provisions in the will in favor of the testator’s spouse are revoked. . . . . With this exception, no written will, nor any part of the will, can be revoked by any change in the circumstances or condition or condition of the testator.” This means once your divorce is final, your former spouse is not likely to benefit from your estate if you did not change your will.
There are a couple of scenarios that a recent divorcee will need to consider. If you want your ex-spouse to still be a beneficiary of your estate, you will need to execute a new Last Will and Testament naming your former spouse as a beneficiary, as the prior cited law will not affect a Last Will and Testament executed after the finalization of the divorce. Another scenario to consider is how your estate will pass to your children if they are named as beneficiaries to your estate, and you pass while they are still minors. It is likely that your former spouse will have some access to the children’s inheritance unless otherwise directed in your last will and testament. To prevent your former spouse from accessing funds on behalf of your minor children, you would have to create a trust and name a trustee to handle your estate on behalf of your children.
Power of Attorney
C. § 30-5-2-7 defines a Power of Attorney as “a writing or other records that grants authority to an attorney in fact or agent to act in place of a principal, whether the term ‘power of attorney’ is used.” I.C. § 30-5-4-2 outlines the when a power of attorney is effective. Unless otherwise specified, a power of attorney is effective when it is signed in accordance with I.C. § 30-5-4-1. If you executed a Power of Attorney designating your former spouse as your attorney in fact, your former spouse’s authority to act on your behalf would terminate when the marriage is terminated pursuant to I.C. § 30-5-4-4(5). This means that if you and your spouse executed power of attorneys prior to the dissolution of your marriage they are no longer valid, and you may need to execute a new Power of Attorney.
Healthcare Power of Attorney or Healthcare Representative
C. §16-21-12-4 defines a Health Care Representative as “an individual appointed as the patient’s health care representative under I.C. §16-36-1-7 or an individual holding the patient’s health care power of attorney under I.C. §30-5-5-16. However, if the patient has not appointed a health care representative under I.C. §16-36-1-7 or granted a health care power of attorney to an individual under IC 30-5-5-16, the term means an individual authorized to consent to health care for the patient under IC 16-36-1-5.” A health care representative and a health care power of attorney are similar to the general power of attorney with the major difference that your agent is limited to only making health care decisions and/or health care expenses. A healthcare power of attorney is only valid if the principal becomes incapacitated and terminates the moment that the principal is no longer incapacitated. I.C. § 15-35-1-9.5 lists the individuals how are not authorized to provide health care consent. If you have made a designation for a health care representative or health care power of attorney and designated your spouse in this capacity, your spouse is unable to serve and your designation would be invalid once the parties are legally separated or a petition for dissolution, legal separation, or annulment of the marriage is pending with a court. Additionally, if at the time you are incapacitated you have a protective order against the party designated as your health care representative that person cannot make decisions for you. The final layer of protection is when the representative has pending criminal charges in which the individual who is incapable of providing consent is the alleged victim. It is important to note, that if a health care provider allows a former designee of a health care power of attorney to provide or decline consent based on good faith that the person providing or declining consent for services is authorized to do so, that provider has immunity from criminal prosecution civil liability; or professional disciplinary action. Therefore, it is extremely important that you make sure that your health care provider is aware of all of the circumstances regarding the person appointed to make health care decisions on your behalf. This is especially important if you have executed a living will and indicated that you are intentionally not making a decision but allowing your health care representative to make that decision for you.
If you are recently divorced, you may want to revisit your estate planning documents to ensure that the your estate passes as you intend. You may also want to ensure that you have someone named to consent to your financial and health care needs in the event that you are incapacitated or otherwise unable to do so.
This post is intended to provide general information on estate planning after divorce. If you need assistance with estate planning, please contact the experienced criminal defense attorneys at Banks & Brower, LLC at (317) 870-0019 or email us at firstname.lastname@example.org for a free initial consultation to determine how we can help.