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Why estate planning is often part of New Jersey divorce

On Behalf of | Jan 26, 2024 | Divorce

New Jersey divorces generally require that people address many legal issues. They may need to close shared financial accounts and open new ones. Dividing property and debts, refinancing homes and executing new deeds are often all part of New Jersey divorce proceedings.

People may experience legal burnout during a divorce because of all of the demands on their time. The idea of reviewing an existing estate plan or creating a new one may seem very unappealing to an individual currently pursuing a divorce. Still, estate planning is often crucial during divorce for the protection of each individual and their dependent family members.

Spouses often have authority and certain rights

Until the New Jersey courts finalize someone’s divorce, their spouse is likely to be the main beneficiary of their estate. Particularly in cases where people do not have an estate plan, their spouses have the right to receive a significant portion of their estate or all of what remains after fulfilling someone’s financial obligations.

Those who have decided to file for divorce likely do not want their spouse to receive their personal property if they die. Therefore, creating an estate plan naming beneficiaries for personal resources can be an important step for someone who never created a will before. Those who have prior estate plans likely need to update their documents now that they intend to divorce.

They can remove their spouse as a beneficiary and replace them if they hold a position of authority in the estate plan. Individuals may also need to file updates with financial institutions and insurance providers if they had arranged for accounts to transfer when they die or if they designated their spouse as the beneficiary of the policy.

Children may need different protection after a divorce

The likelihood of the parents dying simultaneously after a divorce is lower than it is for families where the parents remain married. Therefore, the need to name a guardian for the children may seem less pressing after a divorce. However, including suggested guardians in an estate plan is still an important move for the protection of one’s children. Additionally, parents may need to think about protecting the inheritance they want their children to receive.

Minors usually do not have legal control over their own assets. If someone dies while their children are still underage, their spouse might potentially take control over the estate and use everything that someone hopes their children would eventually inherit. Those who want to leave resources for their children may need to consider adding a trust to their estate plan as they prepare for or recover from a divorce.

Those who reconsider their legacies and remove their spouse from their estate planning paperwork during the marital dissolution process may feel more confident about the future after a divorce changes their personal circumstances.