SPECIAL SECTION ESTATE PLANNING
Estate planning and divorce MALA BLOMQUIST | MANAGING EDITOR
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ivorce, even when amicable, is never easy. However, it is not something one can afford to look away from. Jennifer Moshier, partner and managing attorney with Moshier Law in Phoenix, shared one dramatic example. She was contacted by a friend of the family of a deceased woman. “Her husband had filed for divorce, but while she was ill, he brought her soup. She was hospitalized by Saturday,” said Moshier. Since it was a holiday weekend, the courts were closed until Tuesday. By Tuesday, the woman had died and her husband had declined an autopsy, ordered her cremated and he inherited the entire community estate and assumed care of their two children. “I can only imagine the strain their maternal relatives suffered trying to maintain any connection to those children,” she said. That is an extreme example, but a few local estate-planning experts explained to Jewish News how important it is to pay attention to the details during divorce. In the United States, between 35-50% of first-time marriages end in divorce and according to the Centers for Disease
Jennifer Moshier, Allison L. Kierman and Stephanie A. Bivens. COURTESY OF JENNIFER MOSHIER, ALLISON L. KIERMAN AND STEPHANIE A. BIVENS.
Control and Prevention, in Arizona the marriage rate is 5.4 per 1,000 people and the divorce rate is 2.7. Divorce can not only be emotionally taxing, it can also be financially difficult. The State of Arizona has an automatic estate plan for everyone, a schedule of how your assets will be distributed if you die and who takes priority in the order of importance if you need a guardian
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to protect your health or conservator to manage your money. Most people will nominate a spouse to make decisions for them if and when they are suddenly unable. Filing for divorce, alone, does not legally change these designations. Arizona Revised Statute §14-2802 requires that for the revocation to happen, the divorce must be finalized. If two people are divorcing and one dies, but the divorce is not finalized, the person who died was still legally married. If two people are divorcing and one becomes incapacitated, the spouse is the statute’s nominated guardian or conservator. That means a spouse, even after a divorce filing, could decide to take someone off life support, inheriting everything. “If you do not want your former spouse to inherit or make financial and medical decisions for you, it’s important to identify who your new agents are,” said Allison L. Kierman, professional estate planning and probate attorney with Kierman Law in Scottsdale. “Generally, when you divorce you want to update your estate plans to identify new powers of attorney and other agents, new beneficiaries for assets and if you have a trust, you should transfer the assets out of the trust, as agreed upon in the divorce, and revoke the existing trust.” If you had a trust together, that trust
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will terminate, and all assets will be distributed to the parties pursuant to the dissolution order. However, if you had a trust together you likely also had a “pourover” will that leaves all your estate assets to that joint trust. “If the trust is terminated and the will is never updated this can create significant issues and unintended consequences in administering your estate and final wishes,” added Stephanie A. Bivens, certified elder law attorney (CELA) with Bivens & Associates in Scottsdale and Mesa. “As such, it is imperative that you create a new will and/or trust after divorce.” Parents can also include language in their own will or revocable trust that will establish a trust for their children under which the child’s inheritance will be managed and used for the child’s benefit. These “testamentary trusts” have several advantages, such as designating a trustee to manage the inherited assets while children are minors or young adults, creditor protection and protection of assets in the event of an adult child’s divorce. “Some ex-spouses want to agree between them as to when the children can inherit,” said Kierman. “Other couples completely disagree about inheritance distributions and need to create their own estate plans.” Your estate plan needs to be tailored to your unique situation. “I am married, and I have changed my designations multiple times as my husband and I grew more solidified in our relationship,” said Moshier. “I also amended provisions for beneficiaries as I became closer to the children he had from his prior marriage. Blended families are a special situation.” It is crucial to update your estateplanning documents and beneficiary designations after divorce to avoid unintended consequences. Updating your estate plan ensures that your wishes are accurately reflected and that your assets will be distributed according to current intentions, providing you and those you care about with peace of mind. JN
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