Divorce is a particularly sticky situation in anyone’s life. Unfortunately, it’s also a difficult time for most, especially when it comes to the handling of business assets and estate.
The reality is that many Americans end up getting divorced at least once in their lives. Although the divorce rate has decreased throughout the years, the United States still has the highest rates worldwide. One of the most significant problems most divorced people have is handling their estate right after a divorce.
Estate Laws
It’s vital that you learn a few estate laws in the United States when discussing estate planning. Remember that your will is the most crucial piece of the puzzle when it comes to estate distribution. However, when a will is lacking during the time of passing, then the courts will most likely follow estate laws.
Community Property
The first estate law that courts abide by in the United States is the community property law. However, keep in mind that only the following states follow this law: Arizona, Idaho, New Mexico, Texas, California, Wisconsin, and Washington. So if you’re living in any of these states, you’re following the community property law regarding estate distribution.
Essentially, in this estate law, your current spouse is entitled to half your assets when you pass away. This means the income you’ve generated from work, properties, and business assets. They are free to do whatever they want with the assets they’ve received. The court will then evenly distribute the remaining half to the remaining benefactors, such as your children.
An ex doesn’t have access to claiming your estate in this kind of law. However, in the following law, you will learn they can start claiming assets as their own.
Common Law
The common law is what the remaining states that weren’t mentioned previously follow. In this estate law, the current spouse isn’t entitled to half of your estate. Instead, they have to file to claim such inheritance. Of course, this is the same for everyone else, including your ex. But your current spouse has the right to claim the inheritance they might have purchased during your marriage.
The common law gives everyone the chance to claim what is theirs rightfully. For example, if your ex-spouse has purchased certain assets during your marriage, then they have an easier time to claim for that under this law. Furthermore, any interested parties who might have dealt with you during the past can also file claims for any assets you might have. Finally, benefactors can also rightfully claim whatever asset they might have helped you purchase.
However, this particular estate law can be a severe problem for many families and lead to disruptions. By the end of the day, it’s better that you rewrite your will during a divorce so that no complications can occur.
Rewriting the Will
After a divorce, many state laws revoke the ability of a former spouse to gain access to specific gifts. Some state laws even forbid a family member of a former spouse to gain access to these gifts unless your will covers it.
If you want to keep a good relationship with your former spouse, you must include some assets to be given to them in your will. However, if you don’t want to give your former spouse access to your estate, then you must remove them from your will as well.
When rewriting your will, it’s good to assign an executor so that your ex won’t be able to disrupt any asset transfer. Your executor shall be the one in charge of executing your will appropriately. A good executor can be your estate lawyer or someone you truly trust.
You can do all these things by simply writing a new will or updating it through a codicil. All of which are available to you once you’ve gained any assets during your lifetime.
Estate Planning and Current Status
You need your current marital status to be clarified by the court before you update your will. This means getting your divorce lawyer to explain your current situation with your ex. This will then make the rewriting of the will official. However, if the court cannot clarify your current situation yet, you should wait it out until your divorce is official before rewriting your will.
Divorces are tricky and often unkind. But if you can settle on the assets you want to share with your ex, the estate planning can go much smoother. You mustn’t let your emotions get in the way because you’re determining the future of your assets and businesses by the end of the day.