Estate planning considerations during and after divorce in Idaho
When going through a divorce in Idaho, updating your estate plan might not be at the forefront of your mind. However, failing to revise your estate planning documents during or immediately after divorce can have serious unintended consequences. Here's what you need to know about protecting your assets and wishes during this transitional period.
Immediate Steps During Divorce Proceedings:
While Idaho law automatically revokes certain provisions of wills (but not trusts) benefiting your former spouse upon divorce, waiting until the divorce is final to update your estate plan can be risky. Consider taking these steps as soon as you file for divorce:
Review and Update Your Power of Attorney Documents
During divorce proceedings, you likely don't want your soon-to-be ex-spouse making financial or medical decisions on your behalf. Update both your financial and medical powers of attorney to designate a trusted family member or friend instead. This is especially crucial if you previously named your spouse as your agent.
Revise Your Living Will
Your advance directives should reflect your current wishes regarding end-of-life care. If your spouse is listed as your primary decision-maker, consider appointing someone else to ensure your healthcare wishes are honored according to your current preferences.
Essential Updates After Divorce:
Once your divorce is finalized, you'll need to make several important modifications to your estate plan:
Create a New Will or Trust
While Idaho Code Sections § 15-2-508 and § 15-2-804(b) automatically revokes provisions in your will or trust that benefit your ex-spouse, relying on this law alone isn't recommended. Draft a new will or trust that clearly reflects your current wishes and family situation. If you have minor children, carefully consider guardianship appointments and how assets should be managed for their benefit.
Beneficiary Designations
Review and update beneficiary designations on all your accounts, including:
• Life insurance policies
• Retirement accounts (401(k)s, IRAs)
• Investment accounts
• Bank accounts with pay-on-death provisions
Remember that beneficiary designations typically override your will and aren't necessarily revoked by divorce in Idaho. Failing to update these could result in your ex-spouse receiving assets against your wishes.
Consider Your Children's Needs:
If you have minor children, your estate plan should address their unique circumstances post-divorce:
Create a Trust
Consider establishing a trust to manage assets for your children's benefit. This can help ensure that your ex-spouse, as the children's other parent and potential guardian, doesn't have direct control over their inheritance while still providing for their needs.
Address Child Support Obligations
Your estate plan should account for ongoing child support obligations in the event of your death. Consider life insurance policies or other financial arrangements to ensure these obligations continue to be met.
Special Considerations for Blended Families:
If you’re entering a new relationship or marriage after divorce, carefully balance the needs of your children from your previous marriage with those of your new family members. Consider using tools like:
• Separate property trusts
• Life insurance policies designated for specific beneficiaries
• Qualified terminable interest property (QTIP) trusts
Periodic Review and Updates:
Estate planning isn't a one-time event. Review your plan regularly, especially when significant life changes occur. Schedule periodic reviews with your estate planning attorney to ensure your plan continues to meet your goals and complies with current Idaho law.
Working with Professionals:
Coordinating with both your divorce attorney and estate planning attorney during this transition can help ensure nothing falls through the cracks. They can work together to address complex issues like:
• Division of retirement accounts through qualified domestic relations orders (“QDROs”)
• Tax implications of asset transfers
• Protection of business interests
• Coordination with your divorce settlement agreement
Don't wait to update your estate plan during or after divorce. Taking proactive steps to revise your documents can help protect your assets and ensure they pass according to your current wishes. Working with an experienced estate planning attorney can help you navigate these important changes and create a plan that provides peace of mind for you and your loved ones.
My law firm is currently offering free telephonic, electronic, or in-person consultations concerning creating or reviewing estate planning documents.
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Robert J. Green is an Elder Law, Trust, Estate, & Guardianship Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, powers of attorney, guardianships, Medicaid planning, or VA Benefit planning, contact Kootenai Law at 208-765-6555, Info@KootenaiLaw.com, or visit www.KootenaiLaw.com.
This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.