Divorce and Estate Planning in Arizona
Divorce is one of the most stressful and emotionally draining experiences anyone can go through. It brings up difficult questions about asset division, child custody, spousal support, and more. At the same time, you need to plan for your future by getting your estate in order.
That’s where the experienced attorneys at Goldman Law, LLC come in. We’ve helped countless clients in Phoenix and across Arizona get through their divorce while protecting their assets and providing for their loved ones. In this guide, we’ll discuss various aspects of divorce and estate planning in Arizona. If you’d like to have sound legal guidance for this undertaking, please reach out to us at Goldman Law.
Estate Planning, Divorce, and Protecting Assets
Divorce can have a significant impact on your estate plan. Your priorities will likely change after the end of marriage, and you may want to rearrange what your estate will be used for. Not updating your estate plan during or after a divorce can cause complications such as your ex inheriting your assets or being granted decision-making powers over your healthcare or finances.
Imagine this scenario: John and Jane have been married for 15 years and have two children together. During their marriage, they created an estate plan that named each other as primary beneficiaries and decision-makers. However, after a contentious divorce, John neglected to update his estate plan. Tragically, John passed away a few years later, and his ex-wife Jane inherited the majority of his assets, leaving their children with little to no inheritance.
To avoid such situations, it’s crucial to review and update your current estate plan during and after divorce. This not only protects your assets but also ensures that your new wishes are carried out according to your intentions.
Key Concerns When Estate Planning While Your Divorce is Pending in Arizona
While your divorce is pending, it’s essential to take proactive steps to protect your assets and ensure your estate plan aligns with your new circumstances. Here are some key considerations:
- Revoke or update your will: If you have a will in place, review it carefully and consider revoking or updating it to remove your soon-to-be ex-spouse as a beneficiary or executor. In Arizona, a divorce automatically revokes certain provisions in your will that relate to your former spouse, but it’s still advisable to create a new will to avoid any ambiguity.
- Review and update beneficiary designations: Check the beneficiary designations on your life insurance policies, retirement accounts, and other assets. Remove your ex-spouse as a beneficiary and update the designations to reflect your current wishes.
- Consider creating or updating a trust: Trusts can be powerful tools for asset protection and management during and after a divorce. You may want to create a revocable living trust or update an existing trust to ensure your assets are distributed according to your wishes.
- Update powers of attorney: Review and update your financial and healthcare powers of attorney to remove your former spouse as your designated agent. Appoint someone you trust to make decisions on your behalf in the event you become incapacitated.
Main Documents Included in Estate Planning During a Divorce
During a divorce, it’s essential to review and update various estate planning documents to reflect your wishes and protect your assets. Here are some of the main estate plans to consider:
Life Insurance
Life insurance can play a crucial role in estate planning during a divorce, especially if you have children or financial obligations to your ex-spouse. Here are some common types of life insurance to consider:
- Term life insurance – Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. It can be an affordable option to ensure your loved ones are financially protected in case of your untimely death during or after the divorce process.
- Variable life insurance – Variable life insurance allows you to invest the cash value portion of your policy in various investment options such as stocks, bonds, and mutual funds. This type of insurance can be beneficial if you’re seeking potential growth opportunities for your policy’s cash value during and after your divorce.
- Whole life insurance – Whole life insurance provides lifelong coverage and builds cash value over time. It can be a more expensive option but offers permanent protection and a guaranteed death benefit for your beneficiaries. When updating your life insurance policies during a divorce, be sure to review and update the beneficiary designations to reflect your current wishes.
Last Will and Testament
A last will and testament is a legal document that outlines how you want your assets to be distributed after your death. During a divorce, it’s crucial to review and update your will to ensure it aligns with your current circumstances and wishes.
In Arizona, if you die without a valid will (intestate), the court will distribute your assets according to intestate succession laws, and the result may not align with your intentions. Creating or updating your will (testate) allows you to specify how you want your assets to be distributed.
Creating Your Last Will and Testament
When creating or updating your will during a divorce, consider the following:
- Beneficiaries: Remove your former spouse as a beneficiary and update the beneficiary designations to reflect your current wishes.
- Executor: Appoint a trusted individual or professional to serve as the executor of your estate.
- Guardianship: If you have minor children, designate a guardian to care for them in case of your untimely death.
Living Will
A living will, also known as an advance directive, outlines your preferences for end-of-life medical care in case you become incapacitated. During a divorce, it’s essential to review and update your living will to ensure your wishes are carried out according to your intentions.
Holographic Wills
In Arizona, holographic wills (handwritten wills) are recognized as valid if they meet certain requirements, such as being entirely handwritten and signed by the testator (the person making the will). However, it’s generally recommended to have a formally drafted will to avoid potential legal challenges or ambiguities.
Self-Proved Wills
Arizona allows for self-proved wills, which can simplify the probate process by eliminating the need for witnesses to testify to the validity of the will. To create a self-proved will, you and your witnesses must sign an affidavit before a notary public, attesting to the validity of the will.
Reciprocal Wills
Reciprocal wills, also known as mirror wills, are wills created by spouses or partners that mirror each other’s provisions. During a divorce, it’s essential to revoke or update any reciprocal wills you may have created with your ex-spouse to ensure your wishes are accurately reflected.
Trusts
A trust is a legal entity that can hold your assets on behalf of your beneficiaries until a specific occasion or time. Here are some common types of trusts to consider:
Trusts and Young Beneficiaries
If you have minor children or young beneficiaries, creating a trust can be an effective way to manage and distribute assets for their benefit. A trust can specify how and when the assets should be distributed, as well as appoint a trustee to manage the assets until the beneficiaries reach a certain age or meet specific conditions.
Inter Vivos Trust (also known as a Living Trust)
An inter vivos trust, or living trust, is a revocable trust created during your lifetime. It can be an effective way to manage and distribute your assets during and after a divorce, while avoiding the probate process. You can serve as the trustee of your living trust and make changes or revocations as needed.
When creating or updating a trust during a divorce, be sure to review and update the beneficiary designations, trustee appointments, and trust provisions to align with your current wishes and circumstances.
Powers of Attorney
Powers of attorney are legal documents that grant someone else the authority to act on your behalf in financial or healthcare matters. During a divorce, it’s essential to review and update your powers of attorney to ensure the designated agents align with your current wishes and circumstances.
General Power of Attorney
A general power of attorney grants broad authority to an agent (also known as an attorney-in-fact) to handle your financial affairs. This can include managing bank accounts, paying bills, and handling real estate transactions. During a divorce, you may want to revoke or update your general power of attorney to remove your former spouse as your designated agent.
Healthcare Power of Attorney/Limited Power of Attorney
A healthcare power of attorney, also known as a limited power of attorney, grants authority to an agent to make healthcare decisions on your behalf if you become incapacitated.
During a divorce, it’s crucial to review and update your healthcare power of attorney to ensure the designated agent aligns with your current wishes and circumstances. By reviewing and updating your powers of attorney during a divorce, you can ensure that the individuals you trust are empowered to make decisions on your behalf if needed.
Divorce and Estate Planning in Arizona FAQ
In Arizona, is it possible to dissolve an existing trust and establish a new one with new beneficiaries?
Yes, you can revoke a revocable trust and create a new one with different beneficiaries during or after a divorce. Revocable trusts can be amended or revoked at any time, allowing you to update the trust provisions and beneficiary designations to align with your current wishes and circumstances.
Is it possible to cancel a durable power of attorney in Arizona after a divorce?
After your divorce, you should make a new power of attorney document that expressly revokes the old one in order to cancel a durable power of attorney. It’s also advisable to notify the agent named in the previous power of attorney that their authority has been revoked. In Arizona, you can revoke a power of attorney by following the instructions outlined in the document or by creating a separate revocation document.
Can a trustee of my choice oversee the proceeds from my life insurance policy in Arizona?
Yes, you can designate a trust as the beneficiary of your life insurance policy, allowing the proceeds to be managed by a trustee you choose. This can be particularly beneficial if you have minor children or want to ensure the life insurance proceeds are distributed according to your specific wishes and instructions.
How do I amend my Arizona estate plan to name a suitable guardian for the children?
In your last will and testament, you can designate a guardian to care for your minor children in case of your untimely death. It’s essential to choose a guardian you trust and who shares your values and parenting philosophies. You can also include provisions for the guardian’s responsibilities and the management of assets or funds intended for your children’s care and upbringing.
By addressing these questions and concerns, you can create an estate plan that is comprehensive and tailored to your specific needs during and after a divorce.
Seek Professional Guidance for Divorce and Estate Planning in Arizona
Estate planning during and after a divorce can be complex, with various legal and financial considerations to navigate. It’s highly recommended to seek the guidance of experienced professionals such as estate planning attorneys and financial advisors. This ensures that you have the legal groundwork and are taking advantage of financial strategies to protect your assets and safeguard your intentions.
Why Choose Goldman Law?
When it comes to divorce and estate planning in Arizona, you need a legal team with experience, skill, and a track record of success. At Goldman Law, LLC, that’s exactly what you’ll find:
- Over 25 years of combined legal experience: Our attorneys have spent decades handling the full range of divorce and family law cases across Arizona. We know the law inside and out.
- Focus on Family Law: Divorce and estate planning are our specialties. We’ve undergone specialized training in these areas and are deeply familiar with the Family Law and Probate courts in Arizona. Our law firm can provide experienced estate planning guidance in relation to divorce.
- Superb 10/10 rating on AVVO: We’ve earned the highest possible rating from this respected attorney review site – a testament to our legal abilities and client satisfaction.
- Lead Counsel rated for Ethical Practice: Our firm has been recognized by the legal profession’s most comprehensive rating service for our outstanding ethical standards.
- BBB A+ rating for Client Satisfaction: The Better Business Bureau has given us their highest rating based on our commitment to client service and transparent business practices.
Above all these, what really sets Goldman Law apart is our approach. We apply aggressive legal representation to protect your rights, while providing you with compassionate guidance to help you through this difficult transition. Our attorneys take the time to really understand your unique situation and goals.
Whether you’re dealing with a complex, high-asset divorce or creating an estate plan for your family’s future, we can help you achieve the best possible outcome. Contact us today at (602) 698-5520 to schedule a consultation and take the first step towards securing your future and protecting your loved ones.
