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Barbara L. Jouette, Attorney, P.C.
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Divorce planning may include review of estate documents

During any major life transition, and especially at the end of a marriage, one will need to review those carefully drafted estate documents. Whether it is a trust or a will, neglecting these documents during the divorce planning can certainly cause issues down the road. Two recent court cases illustrate problems that have arisen for individuals who neglected to specify and/or update the documents. These issues can potentially extend to individuals in Texas, although the two cases did occur in other U.S. states. 

Decanting -- it's not just for wine. The first court case dealt with an issue in which an old irrevocable trust was decanted, or transferred, into a new trust with different terms. The previous trust was established during a man's marriage. When he faced divorce 30 years later, the original trustees moved the trust assets into a new fund that excluded the man, and therefore his soon-to-be ex-wife. A state Supreme Court upheld this use of decanting. 

Another issue can pop up when wills and beneficiaries are not updated in a timely fashion. A woman had named her husband as the executor and beneficiary of her will, and her father-in-law as the backup. When she died, the two had divorced, but she did not update the beneficiary. Under the law in that state, the ex-husband was not eligible to be executor, but there was no law in place that prevented the father-in-law from remaining as backup and potentially giving the estate assets to the ex-husband. 

Divorce planning can certainly be wide ranging. Many experts recommend digging deep for any and all official legal documents, financial accounts and miscellaneous concerns during the divorce process in order to avoid any confusion later down the road. After one's death, it may be too late to clarify whether one did or did not want an ex or an ex-family member to receive the assets. Many individuals in Texas choose an experienced family law attorney for help in managing all the details of a divorce. 

Source: fa-mag.com, "Two Court Rulings Highlight Divorce Planning Loopholes", Michael S. Fischer, Nov. 27, 2017

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