Estate planning can be a challenging topic to discuss, yet it is an important subject to consider, particularly when experiencing a major life change, such as divorce. Particularly when a divorce is not amicable, it may be worthwhile for an individual to adjust their existing estate plan, or establish a new one, to avoid transferring any assets to the former spouse upon their death or incapacitation. Learn more about estate planning after divorce in Texas and find out how an estate planning attorney from Jason English Law can help those going through a divorce conduct effective estate planning by calling (512) 454-7548.
Understanding Estate Planning After Divorce
The National Institute on Aging defines effective estate planning as arranging an individual's affairs to plan for emergencies or death in the future. The estate planning process usually involves storing crucial personal, legal, medical, and financial documents in a single location, to reduce the burden placed on an individual's loved ones in difficult circumstances, and to ensure that others honor the individual's wishes. The recommended approach is to review estate plans periodically and in case of any major life events, such as divorce. Estate plans typically include the following documents:
- A will, financial and health care power of attorney, living trust, and health care directive
- Potential organ donation registration details
- A document detailing an individual's funeral preferences
What Effect Does a Divorce Have on an Estate Plan?
The court issues a decree after a divorce that settles the legal and financial concerns between the former couple. However, this decree does not impact each spouse's estate plans, which they will need to revise independently if they wish to make any changes. Consider making the following adjustments to an estate plan after going through a divorce:
- Create new durable and health care powers of attorney that appoint another person, who is not a former spouse, to manage the individual's financial and legal affairs and make medical decisions, respectively, on their behalf.
- Issue a new health care directive to appoint a different person other than the former spouse to follow the individual's health care wishes if they become incapacitated.
- Revoke the old will, if there is one, and prepare a new one while taking care to ensure the former spouse is not named the executor and checking that the named beneficiaries and guardians in the previous will do not need revising in light of the divorce.
- Revise any established revocable trusts to ensure the former spouse is no longer a trustee or beneficiary.
- Adjust the beneficiary designations on pension and retirement accounts, bank and investment accounts with clauses that transfer the account's funds automatically when the account holder dies, and update life insurance policies to designate someone other than the former spouse as the primary beneficiary.
Explore estate planning after divorce further and see how a seasoned Texas estate planning attorney can help individuals plan their estates following this significant life event by arranging a consultation with Jason English Law.
How Do I Transfer Property After a Divorce in Texas?
Following divorce proceedings, the former married couple divide their property according to the terms of the court-issued divorce decree. While there are multiple ways of transferring some assets, real estate transfers occur through deeds. Establishing a new deed is necessary to remove a former spouse from the property title.
If one spouse is retaining a formerly shared property whose deed was previously in both spouses' names, the spouse who has been granted sole ownership of the real estate should initiate the paperwork to establish a new deed as soon as possible after the divorce. This helps prevent future issues, such as if the spouse awarded with the property decides to refinance or sell it but discovers that the former partner's name remains on the property deed, requiring them to get in contact with the ex-spouse to rectify the situation. To remove a former partner from the deed to a property and complete the transfer after a divorce, follow these steps:
- Read the court decree to understand who gets the property.
- Acquire a copy of the previous deed to the real estate.
- Make the transfer by creating a new property deed.
- File the newly made deed with the county or city land records.
- Store a copy of this deed to prove property ownership.
Can an Ex-Wife Claim Inheritance After Divorce in Texas?
In general, Texas law considers inherited assets as separate property. Typically, they are not divided between the spouses in a divorce, irrespective of when one of the spouses inherited the asset. That said, if the spouse commingles the inheritance with the couple's community property so that differentiating between the separate and community property becomes challenging, this might make it difficult to keep the inheritance separate when dividing the assets during a divorce.
To prevent a former spouse from claiming an inheritance after a divorce in Texas, the recommended approach is to ensure inherited assets remain separate and that there is evidence of this separate status. For instance, if the asset is money, consider keeping this in a bank account that is separate from the couple's other finances. Other useful evidence includes keeping withdrawal and deposit bank records and, for real estate, tax record receipts, accounting logs, and details of payments made to improve the property, particularly the use of separate funds to make these payments.
What Happens to the House After a Divorce in Texas?
Following a divorce between homeowners in Texas, the former couple tries to agree on how to split the family home. If they cannot agree, the court decides instead, with the judge applying the equitable distribution principle to guide the court's decision. This means dividing the property in a manner that is fair to each party, which is a complex and subjective determination that might not necessarily result in an even split.
Unlike rental properties, which the court is likely to treat as other community property, the court may not divide the family home in the same way. For instance, if the couple has children, the court may give a parent who has custody of the children the family home to minimize the disruption the children experience. Worth noting is that the court will not remove one of the spouse's names from the family home or mortgage after making their decision; instead, the judge will issue an order explaining what needs to happen regarding the property.
Contact a Texas Estate Planning Attorney Today
According to the United States Department of Agriculture, estate planning enables individuals to organize their affairs in accordance with their wishes, which may change after divorce. If you are going through a divorce and have questions concerning post-divorce estate planning, consider contacting a seasoned estate planning attorney to discuss your legal options. Find out more about estate planning after divorce in Texas and discover how Jason English Law can assist individuals with their estate planning goals by contacting (512) 454-7548.