Divorce or Marriage: Marital Matters Matter!
Written by Craig Wisnom
When planning for the exciting (and/or intimidating) prospect of a marriage, or when going through the upheaval of a divorce, it’s understandable that personal legal planning issues can be set aside for more important concerns. However, there are some critical (and frequently simple) updates that Arizona residents need consider when their marital status changes.
A big consideration when getting married is whether a Premarital (Prenuptial) Agreement is advisable, and if so, how it should be done and what it should say. ANYONE getting married should at least consider this arrangement, even though it may be much more important in some circumstances than others. While it’s easy to look at as something grossly unromantic, you can also consider the true intimacy involved for pending spouses to be this open and honest about the fundamentally important issues of family economics. However, Premarital Agreements deserve their own article and will get one in one of our later newsletters.
Updating your basic estate planning documents after you get married, or if you are in the process of a divorce, is critical because of the following issues:
- If you are married, it’s likely you wish to change your plan to include your new spouse as a beneficiary of your estate, or as a fiduciary such as Health Care Agent or Personal Representative. If you don’t update the documents, they may not be included where you intend.
- If you have a Will, and then you get married, your spouse may automatically be “written in” as a beneficiary. So even if you get married and don’t wish to include your spouse at all, you may need to update your documents so that doesn’t inadvertently happen.
- If you and your spouse file for divorce, and you die, and your Will still names your spouse as your own beneficiary, that soon-to-be-ex-spouse will still inherit all assets at your death! Even though, for most folks in that situation, that is not what they want.
- If your divorce is final, your ex-spouse (and any of his or her family members) is automatically removed from all your estate planning documents, beneficiary designations, powers of attorney. If this isn’t what you want (for instance, if you still wish your ex-spouse to handle the money you leave to your children as Trustee), you need to update the documents after divorce. On the other hand, even if you do want your ex-spouse removed in every possible way, it’s far better to do it directly, so it’s obvious, and especially so it will cover things like group insurance or retirement plans through work, where Federal law might prevent the spouse from being removed under Arizona law.
In all these cases, the updates should include your Will, a Revocable Trust (if you have one), Financial and Medical Powers of Attorney, and, often overlooked, beneficiary designations on IRA’s, life insurance policies, retirement and pension plans through your employer, and annuities. In most cases it’s not terribly complicated, but vitally important to revisit.