Who can think of the words “love and marriage” without envisioning Buckingham Fountain dancing to the “Married… with Children” theme song? Most of us have a little dysfunction in our marriages. The most important thing you can do is plan ahead and be prepared. Here are a few things everyone should think about when love and marriage collide … and when they diverge.
Pre- and post- nuptial agreements:
Some people would rather get a root canal before asking their significant other to sign a prenuptial agreement. But consider this: a commonly cited reason for marital disputes and divorce are finances. A prenuptial agreement can head this off as the process itself requires the parties to lay out their financial situations and discuss them ahead of time. It puts everyone at ease because you each know what to expect should you decide to go your separate ways.
The prenuptial agreement can be as creative as the couple chooses and can also include provisions for gifts or alimony, agreements as to the amount received if one spouse dies, protect the financial well-being of children from prior relationships, protect inheritances and family heirlooms, and protect a business acquired before the marriage. If you are considering a prenuptial agreement, it is important to discuss it early in the relationship. It is highly recommended that each of you have your own attorneys and vital that you both fully disclose your assets.
Already married? It is not too late. If you did not get a prenuptial before the marriage or if your circumstances have changed and you need additional coverage your current prenuptial agreement does not provide, any couple can enter into a postnuptial agreement during the marriage. The main distinction is that a postnuptial agreement requires some type of compensation for the spouse giving up rights to the assets set forth in the postnuptial agreement.
Another scenario when a family should consider prenuptial and postnuptial agreements is when making gifts to their children. For a lot of parents, the last thing they want to see is half of their child’s trust fund disappearing with an ex-son or daughter-in-law. When making such gifts to your children, it is a good time to have your child consider entering into a prenuptial or postnuptial agreement, whatever the case may be, so that your gift will stay in the family.
So you are getting a divorce:
Something often overlooked by a person in the midst of a divorce is their estate planning documents. These documents should be reviewed and changes considered before a complaint for divorce is filed. In most cases, a person’s spouse is appointed as a power of attorney for health care, power of attorney for finances, receives all or most of their estate in a Trust or Will, and is often appointed as personal representative or successor trustee. This means, if you were to become hospitalized and incapacitated for any reason during your divorce, your soon-to-be ex-spouse may be the person making your medical decisions and have access to all of your finances. Therefore, it is critical these documents are reviewed and revised as soon as divorce is contemplated.
Early in the divorce process, it is a good idea to run an updated credit report to verify all outstanding debt in your name. It is also wise to change all of your passwords for e-mail accounts and social media accounts. As with any litigation, it is never a good idea to talk about your case with anyone other than your attorney, especially on social media sites. In the context of a divorce this is even more dangerous because your readers often will include people who are related to or are friends with your spouse and it will get back to them. Good, bad or indifferent, it is best to say nothing. If you can avoid it all together, it is recommended that you avoid using any social media sites at all during your divorce.
In the end:
After your divorce is finalized, it is critical you follow through completing changes to accounts and separating your lives. Once again you need to evaluate all of your banking accounts, e-mail accounts, and internet shopping sites to be sure that you have either closed joint accounts or changed any passwords or pin numbers you may have shared with your spouse.
You must also change your beneficiaries, if it lists your spouse, on any retirement plans, bank accounts, certificates of deposit, stocks, life insurance, or disability insurance policies. Regardless of what your judgment of divorce says, if you do not change the beneficiary directly with the company, your ex-spouse would still be entitled to receive those funds. You must provide written notice to each company. Simply call them and ask for them to send you a change of beneficiary form. Fill out and return the form as soon as possible.
If you did not make changes to your Will or Trust prior to the divorce, it will need to be done at this time. There are many reasons to consider establishing a Trust which can be explained to you by an estate planning attorney. After you are divorced, there is an additional reason to establish a trust if you have children under 18 years of age. Depending on the language in your documents, without a trust, your former spouse could have management and control over your children’s inheritance. Whereas, a Trust would place this control in the hands of a person you choose if your ex-spouse is not a good choice.
This article is intended to highlight only a few topics that are overlooked by some individuals when they are considering marriage or divorce. Complete marriage and divorce planning depends on your individual circumstances and will need to be analyzed by an attorney. If you have any questions, please contact our office or your legal advisor to further assist you.