Divorce and Death: A Cheery Spring Article
In this spring version of the Almanac, I usually like to write something cheerful and forward looking. So here it is; a cheery spring article about divorce and death. Of course, divorce is often a traumatic and painful experience for a family. As a lawyer, I am asked how divorce impacts an estate plan including a power of attorney, a will or a trust. The answer to that question is dramatically. There are many pitfalls for the unwary in the course of a divorce. But here is the cheery part, by planning ahead, you can get a much better result.
Health Care Agent During Divorce:
Under Illinois Law, a legal spouse has the right during illness to act as a surrogate for health care. That means, that if you can not make decisions for yourself, the person you are divorcing has the right to decide your health care matters until the day the divorce decree becomes final. To make matters worse, if prior to divorce you signed a power of attorney for health care that names your spouse as your agent, the filing of a petition for divorce or the receipt of a decree of divorce will not automatically negate that document. To change these result, sign a new power of attorney for health care that names a person other than the spouse you are divorcing to act as your agent for health care and make medical decisions for you if you can not do so yourself.
Guardianship of Children:
One of the most emotionally charged issues in divorce is custody. Illinois favors custody with the parents of the children. In some instances (for e.g., parent who travels extensively, an uninterested parent, abuse or neglect) it may not be in the best interest of a child to reside with a particular parent. You may not want this person to be the residential custodian if you die. By signing a designation of standby guardian and by putting guardianship in a will, you can ensure that the court deciding issues related to guardianship will consider what you felt was in the best interest of the minor in question. While there are no guarantees that your wishes will be followed by the court, if you choose to remain silent, you do not give this option a chance.
Spouse as Beneficiary:
Until the divorce is final, a spouse is entitled to 100% of the estate of the deceased spouse, if there are no children and 50% if there are children. In addition, the spouse is likely to be the beneficiary of life insurance and financial assets. If you have decided to divorce, you absolutely should change this result. Do not wait for the divorce to be final.
First, change the beneficiary designation on life insurance and financial accounts. Next, sign a will and or a trust that names a beneficiary other than the spouse. Finally, if you have children, consider making some person other than your current spouse in charge of the children’s inheritance. Remind grandparents to also take this step. By taking action, the spouse is limited to the forced share of the estate (approximately 30%) until the divorce is final, and whatever you decide to leave him or her thereafter. In addition, the amounts to be distributed to the children can be made beyond the reach of the spouse and future step-parents, if any.
Once the divorce is final, Illinois law recognizes that the spouse named in a will or in a trust should not inherit. However, if the deceased spouse fails to change beneficiaries post divorce decree when he or she has an opportunity to do so, the divorced spouse who is named as beneficiary could argue that the deceased spouse affirmed the documents and that the survivor should inherit. Long story short, if you do not want your spouse to inherit your assets, sign a will or a trust disinheriting the spouse as soon as possible. Do not wait for the divorce to be final. Revisit the document after the divorce to ensure that the documents reflect your new single status.
The above presented a sampling of my concerns when we combine divorce and death. There are many more issues affecting your rights in divorce including those connected to inherited wealth, assets protected by a pre-nuptial agreement. If you are thinking of divorcing, get to know your rights. A little planning, can go a long way toward achieving a good result for your family. By sewing the seeds of a good plan, you can look forward to a better future. And if that is not cheery for spring, I do not know what is.