New York residents may remember to update their estate plan at important times, like after a marriage or birth of a child. However, they must also keep in mind that it may be necessary to make changes before getting a divorce.
One of the most important estate planning strategies is to use a trust. This mechanism allows a person to transfer assets while still retaining some control over how they can be used. Some estate plans may involve complex estate planning aspects, such as life insurance trusts. During a divorce, these plans should be reviewed to in order to avoid negative tax consequences and to make sure the proper beneficiaries are listed. Trusts can provide directions as to what will happen during certain events such as divorce. They may specify whether a spouse remains as a beneficiary or trustee or whether this status will change.
Another important aspect of estate planning is acquiring enough insurance to ensure that the beneficiaries will have the necessary funds while depending on the individual. This is usually accomplished by purchasing life insurance. However, a spouse may not have as much of a vested interest in providing these funds to a spouse with whom he or she is no longer involved. A marital property agreement can include provisions that require a spouse who is paying spousal support or child support to maintain life insurance. The amount of the policy may be the current value of the future payments that the spouse will have paid under the terms of the agreement.
While most people who are facing the end of a marriage realize that they should probably have the assistance of a family law attorney, they often fail to realize that a divorce could have other legal ramifications as well. They may want to have estate planning attorneys review their documents to ensure that an unwanted beneficiary is removed.