Estate Planning and Divorce in Michigan

Couples begin married life with hopes and visions of “happily ever after.” For a wide variety of reasons these dreams sometimes fail. When this happens marriages often end in divorce. During this stressful time, the main focus is on financial considerations and custodial issues. A divorce lawyer navigates settlements and custody issues. However, an estate planning attorney should advise you regarding estate planning documents. In short, it’s vital to meet with an experienced estate planning attorney before and after your divorce.

Estate Plan Documents

An estate plan is vital for most adults. A solid estate plan may include the following documents:

Additionally, information regarding life insurance, stocks, IRA’s, retirement plans, deeds, passwords, and more may be part of your estate plan.

How Does a Divorce Affect My Estate Plan?

Michigan law states that when a divorce is final an ex-spouse is removed as beneficiary on your will. Your will is still valid. However, the contingent named beneficiary will receive any inheritance previously designated to your spouse. Is this what you want? If not, you must update your will when the divorce is final. In regards to trusts, Michigan law is quite different. If your ex-spouse is a trustee, you must remove him/her from the trust. In other words, meet with an estate planning attorney and rewrite your trust as soon as the divorce is final.

Once custody arrangements are established you may want to review previous guardianship designations. After a divorce, the previously appointed guardian may, or may not be appropriate.

In regards to powers of attorney, your estate planning lawyer will advise you on the best time to change these, if necessary. For example, if a soon to be ex-spouse is in charge of your finances or healthcare decisions, should you change that as soon as possible? Michigan law does not remove a spouse as financial power of attorney during divorce proceedings. After the divorce is final, the law may remove the spouse as financial power of attorney. In regards to healthcare power of attorney, or advance directive for healthcare, an ex-spouse is automatically removed when a divorce is final.  It’s important to discuss both documents with an experienced attorney.

One thing you may not touch after filing for divorce are any retirement plans. In fact, Michigan considers any property obtained after marriage as marital property. All marital property is divided equitably during a Michigan divorce. Of course, once the divorce is final an updated estate plan becomes necessary to protect all assets.

Second Marriage Estate Planning

Estate planning is essential for all couples and extremely vital in second marriages. Many times if one or both parties have been married before, there are children from a previous marriage. Later, the newly married couple may have children of their own. Without a proper estate plan, children from a previous marriage may lose an inheritance if their biological parent passes away first. So, a well written estate plan protects the children’s future inheritance.

Another fact to consider when writing an estate plan is that sometimes marriages fail. Of course, no one wants to look at that, especially when they’ve endured a painful, past divorce. Even with a prenuptial agreement in place, a couple should carefully plan for the future. An experienced estate planning attorney will guide you through the process to ensure inheritances, long-term care planning, beneficiaries, and businesses are protected and legally part of your estate and legacy.

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