Gray divorce will impact estate planning.
You are no longer in the days of your youth.
You are either nearing or in retirement.
You are also entering into a divorce.
According to a recent Clare County Review titled “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated,” gray divorce brings with it a number of complications.
In fact, a survey conducted at the 54th Annual Heckerling Institute on Estate Planning revealed as startling statistic: more than a third of 112 professional participants (i.e., it is a huge annual confab of attorneys, accountants, financial advisors, and insurance professionals) identified gray divorce as having the greatest impact on retirement funding and estate planning.
Divorce, at any age, brings with it new estate planning concerns.
Complications can arise within blended families because of changing family structures and a need to update heirs and beneficiaries.
Communication within the family and with an experienced estate planning attorney is essential.
Divorce is complicated.
When it occurs later in life, you really need to rethink and undo previous retirement and estate planning.
It is likely you have named your spouse as a beneficiary on most or all of your assets.
You will want to update your assets to reflect new beneficiaries.
Depending on the terms of divorce, your ex-spouse may be entitled to parts of your pension plans, IRAs, or other retirement funds.
This tax-neutral division of these unique assets requires a carefully drafted and executed Qualified Domestic Relations Order.
Contact the companies and institutions for any these accounts to put things in order with the assistance of your family law attorney.
Estate planning documents will also need to be updated.
Set up a time to meet with an experienced estate planning attorney to update your last will or trust.
In the case of gray divorce, a trust may be a better option than a last will.
These can help you transfer assets more efficiently, especially if you foresee the possibility of family conflict.
Utilizing a trust can help you preemptively diffuse fighting within your family.
If you are in the process of a divorce, involve your estate planning attorney as soon as possible.
Making these arrangements in tandem with your matrimonial attorney can help protect your interest in the midst of a gray divorce.
Reference: Clare County Review (February 10, 2020) “Rising Gray Divorce Rates Are Making Estate Planning Problems More Complicated”