A lot of times, people aren’t thinking about all the details that go into divorce when they get married. If it happens, it’s a big financial change. Estate planning is one of the things that people need to think about when they get divorced. Missouri residents should review their plans to see if there are any potential holes that would come into play after divorce. Take a look below to find out more details on the impact divorce has on estate planning, so you’re prepared.
Divorce and Estate Planning in Missouri
Missouri is a “no-fault” divorce state, which means neither spouse has to prove fault or misconduct by the other. Every state allows for “no-fault” divorce, but only 15 states are said to be “true no-fault” divorce states. Missouri is one of those states. If the judge finds that the marriage cannot be saved or fixed, the marriage is inevitably broken. In Missouri, beneficiary designations to an ex-spouse will be automatically removed after divorce if the designation is in a revocable part of the estate plan.
This means that some parts of the estate may not have any beneficiaries after the divorce and may end up in probate court. While this provides a basic layer of protection, it can also create unintended problems. If your ex-spouse was the only named beneficiary, that portion of your estate could be left without direction, forcing the asset into probate court. The probate court essentially decides what to do with the estate and how to divide up the assets. One thing to keep in mind is depending on where you live, estate planning can be different. In each state, estate planning differs in taxes, probate, documents, and other processes. Missouri has different regulations from other states.
What is Estate Planning?
Estate Planning covers the transfer of property when someone dies. You name the people who will be receiving the things you own after you die, as well as naming your power of attorney for both finances and healthcare. Estate planning tasks include making a will, setting up trusts, making charitable donations to limit estate taxes, naming an executor and beneficiaries, and setting up funeral arrangements. Assets that can make up an estate could potentially be a house, vehicles, stocks, art, collectibles, life insurance, pensions, debt, and more. Estate Planning deals with a lot of different things, which is why it’s important to make sure your estate plan is always in order. Especially if divorce happens.
Read More: The Process of Estate Administration in Missouri: A Step-by-Step Guide
Why Divorce Changes Things In Estate Planning
A life event, such as divorce, can change what your family looks like. This means your estate plan needs to be changed. Your former spouse could inherit everything if your estate plan isn’t changed. In Missouri, if you don’t have a plan, the rules of descent allow the court to distribute your assets. Not handling your estate plan when major life changes like divorce happen may cause unexpected problems in the future. It doesn’t always have to be divorce either; you should update your estate plan when you get married, have children, or are planning to adopt.
When to Talk to an Attorney
As soon as you know that the divorce is for sure happening can prevent your ex-spouse from having authority over your medical or financial affairs during the divorce. Communicating with an attorney about your estate plan and changing it right away can minimize the problems down the road with your divorce.
How to Update Your Estate Plan After Major Life Events in Missouri
Common Mistakes to Avoid After a Divorce
- Not updating your will.
- Not removing your ex-spouse as a beneficiary.
- Not updating your beneficiary designations on life insurance or retirement accounts.
- Don’t leave your ex-spouse as your health care proxy or power of attorney.
Mark Harford Law can help you update your estate plan for when situations like divorce come up. It’s better to be prepared for all instances than to have it go to the Missouri courts because you don’t have an estate plan properly set up.