According to a recent study, Kentucky ranks among the top states in divorce rate. Going through a divorce can be tough on all parties involved. The stress, pain and chaos often surrounding divorce can divert attention away from the estate plan, which can create even more problems.
If you were to die during or after a divorce, who would make the important financial decisions for you? Who would take care of your children? If you were incapacitated during the divorce, who would make the important healthcare decisions about you?
These are questions that can easily be answered by immediately updating your estate plan when getting divorced in Kentucky. These are some of the steps you can take:
- Create a Trust To Benefit Your Children
In the state of Kentucky, an ex-spouse is treated as a non-relative for purposes of inheritance tax and must pay the highest inheritance tax rate if anything is left to them. If you want to leave an item or money for your children, it is unwise to leave it to your ex-spouse as you have no guarantee that it will go for the benefit of your children.
If you died before a divorce, your estate would typically go to your spouse. But, with a properly drafted Last Will and Testament, you can insure that in case of divorce, your children will receive their inheritance thanks to the Trust. And, you can name persons other than the ex-spouse as the Trustee.
- Change Your Power of Attorney
Health Care: When creating an estate plan, most will give their spouse Power of Attorney to make critical health decisions if they become incapacitated. However, there is a fairly good chance you may not want to give that power to an ex-spouse.
Consider revoking the Power of Attorney if you’re going through a divorce. You can create a new one, giving a new agent/agents the ability to make those critical decisions for you.
Finances: It is also very likely that you gave your spouse Power of Attorney over your finances should you become incapacitated. For the same reasons, you’ll more than likely want to revoke that Power of Attorney, and draft a new one designating a new agent to handle those decisions.
- Designate Guardians
Your ex-spouse (or soon-to-be ex-spouse) will probably be designated the guardian of your children should you die. But if they were to die as well, who will care for them?
Draft a new Last Will and Testament, and designate new guardians for your minor children. This can avoid any confusion should both you and your ex-spouse die.
It’s not only important to have an estate plan, but it’s very important to have the plan reviewed by a knowledgeable estate planning attorney in Kentucky if you’re going through a divorce. Don’t let the confusion of the moment create even more confusion in the future.