“Til Death (Or Divorce) Do Us Part”
Due to the diverse issues covered in a divorce case, divorce lawyers must have intimate knowledge of the statutes and cases governing not only family law, but also many other areas of the law. As a result, family law extends well beyond just family law. One area that requires more advanced knowledge is estate planning; and as a Chicago family law attorney, I recommend that my clients review their estate plan preceding and following a divorce.
Power of Attorney for Health Care
In Illinois, a power of attorney is a legal document that allows you to designate a person of your choice to make health care decisions for you in the event that you are incapable of making them for yourself, including end of life options. Typically, a spouse is named as one’s power of attorney. Thus, if you are contemplating a divorce it may be wise to reconsider who is named as your power of attorney since your spouse’s authority to make decisions on your behalf remains intact. However, others do have a right to seek guardianship for the disabled spouse if necessary. If the guardianship is granted, it may defeat the spouse’s power under a power of attorney.
Although it varies from state to state, in Illinois an ex-spouse’s power of attorney is revoked upon divorce. This is also true if you are legally separated by a Judgment for Legal Separation. However, if a marriage ends by an annulment the power of attorney is not automatically terminated.
Wills and Trusts
The terms of a will concerning an ex-spouse are automatically negated after a divorce or an annulment. As a result, an ex-spouse is essentially disinherited under ones will. However, if a couple is legally separated, the terms of the will do not automatically cease. Interestingly, if a divorced person wants to, or is obligated under a Judgment for Dissolution of Marriage, to name an ex-spouse as a legatee, action is required to reaffirm or re-execute the will. This is the case even if the ex-spouse was named the beneficiary prior to the parties’ marriage.
Additionally, it is important to know that in the absence of a will, there are formulas in place to divide your property. If you are married and do not have children, your spouse will be considered your beneficiary. If you have children, half of your estate is given to your spouse, and the remaining half is split up among the children. Thus, if you do not currently have a will and you are contemplating a divorce, it may be wise to create one.
Like wills, revocable trust provisions concerning a spouse are terminated upon divorce or an annulment. Similarly, a legal separation does not affect a trust provision. For an irrevocable trust, the terms cannot be modified after it is created, so it is important to be very cautious when drafting an irrevocable trust. It should be stated that the terms provide for termination of a spouse’s right to be a beneficiary or fiduciary upon divorce.
If you are contemplating divorce you have the power to change the beneficiary of a life insurance policy without notifying the current beneficiary, which may be your spouse. However, be aware that your spouse has the right to change his or her beneficiary as well. Also, in Illinois a spouse named as a beneficiary to life insurance is not automatically terminated upon divorce, unless specifically stated in the divorce decree. Thus, one may need to notify their insurance company that they want to name a new beneficiary to replace the ex-spouse, or soon to be ex.
Life insurance beneficiaries should also be considered when there are children involved. In terms of child support, the court can order an ex-spouse to include children as a beneficiary in a life insurance plan to ensure that they are protected.
More in-depth information on life insurance and divorce can be viewed in my 2010 blog post here.
What should I do?
While all of this may seem daunting, you can be proactive with your estate plan so that you do not have unintended results. Being well informed is the first step in taking action. A divorce attorney can help you review and change your estate plan depending on how your personal estate is set up. For more information, please contact me.
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