ESTATE PLANNING DURING A DIVORCE
by Ryan M. Schmisek
It may seem shocking, but even after you have filed a divorce case against your spouse or your spouse has filed one against you it is presumed that she or he is the person best suited to make financial and medical decisions on your behalf if you become incapacitated and that they should serve as the executor of your estate if you pass away. That becomes more than a presumption in the event that you previously prepared a Will, Power of Attorney and/or an Advance Medical Directive (sometimes called a Living Will) naming your spouse to act in those capacities. Just as importantly, in most situations your spouse will likely be the sole beneficiary of your estate because either you have never prepared a Will or you prepared one years earlier when your spouse was an easy choice to receive your property when you passed away.
It is generally a good idea to reassess your estate plan in the event of any major change in your life. There are few changes in life that are more significant than Separation and Divorce, and none that result in as dramatic a shift in who you trust to act in your best interest in the event it becomes necessary.
If you pass away without having prepared your own Will, the state has a default method by which your estate will be divided and who will manage that process. In most cases, it is your spouse who will be sole beneficiary of everything you own. Your spouse will also be presumed to be the executor of your estate giving him or her a substantial amount of authority over many of the important decisions that must be made during the probate process. It does not matter that upon the conclusion of a divorce the court would have ruled that some or all of your property is “separate property” and therefore your spouse would have no right to it. If you pass away before the conclusion of the divorce case, that case is generally dismissed as, according to the law, there is no longer a marriage to dissolve. The laws of property transfer upon death and divorce are quite different and which set of laws applies will depend solely on which happens first, death or divorce.
You can prevent most of the negative aspects of that fact if you act to make a Will or change your Will to one that states what you would like to have happen to the assets you have and the things you own now that your family is changing. In preparing your new Will you can consider the current circumstances of your marriage and family in deciding who you would like to act as your executor, a position requiring a great degree of trust, and who you would like to have receive items of sentimental and financial value.
It is important to understand that while your Will is given a great amount of weight, there are certain post-death decisions that it cannot control completely. This is not intended to be a comprehensive list, so you should discuss your circumstances with your attorney to allow them to advise you on what else may matter to you. As an example, in the event that you have children with your spouse, it is important that you designate who you would like to have custody of them in the event of your death, but ultimately a Court, taking your wishes into consideration, will have final say to decide what custodial arrangements are in the children’s best interest. Also, in certain circumstances your spouse will have a statutory right to a certain portion of your estate even if you want them to receive nothing. In the event he or she petitions the Court for an “elective share,” it will likely be granted. Also, any assets which have beneficiary designations or a right of survivorship for co-owners will not pass through your estate and as a result your Will cannot control who will receive them.
Advance Medical Directives
The issues surrounding this document were made famous several years in the situation of a woman who became incapacitated several years after she separated from her husband. There was significant debate about who have the authority to act on her behalf, her estranged husband or her parents. Through a legal process it was decided that her husband had the right to make those important decisions. The law presumes that your spouse is the person best suited to serve as your guardian and make the most profound (and mundane) decisions with respect to your medical care in the event that you are incapacitated such that you are unable to make those decisions yourself. It is possible that a Court would appoint someone else, but any doubt could be removed by a simple act.
Virginia law permits you to name a trusted friend or other family member to make these health care decisions if you are unable to do so. This is known as a Health Care Power of Attorney. This authority is granted as part of an Advance Medical Directive, which also contains your statement of instructions on how you would like to proceed in the event it is determined that death is imminent or life could be maintained but without any prospect of meaningful cognitive function. It is not uncommon for married couples to have prepared these documents naming each other as the decision maker. If that is the case, you may want to consider revoking that designation and selecting someone else as your health case decision maker.
Powers of Attorney
Similar to an Advance Medical Directive, Virginia law permits you to name another person to act on your behalf generally in the event you become incapacitated. Without such a document it is possible, although unlikely, that a separate spouse would be designated your conservator, a very important position. Having such a document in place remains important, because it allows you to choose who will act in that capacity rather than the Court. This can be an important issue in the context of a divorce, as it is this person who will act in your stead in making decisions with respect to the divorce. You can grant this person the authority to act on your behalf in many other ways as well, including but not limited to managing your real estate, maintaining your finances, paying your bills, filing your taxes, and acting on your behalf in any other form of litigation.
A divorce can be a complicated process implicating many aspects of your life that you would not necessarily consider initially. While the attorneys at ShounBach, limit their practice to family law matters, so we are well familiar with the wide variety of effects these situations can have and are able to assist you in addressing and managing them.