Ex-Spouses & Your Assets

Can my ex-spouse have any control over my Estate if I die?

Although your ex-spouse loses many rights to your estate after you divorce, there are still many pitfalls to avoid.

Often people set up a Trust-based estate plan rather than a Will-based plan to avoid probate, make sure someone can act on their behalf if they become incapacitated, or to protect assets for their descendants.
When Trusts for descendants who are still minors are established either in advance or through testamentary trusts, the legal guardian of a child can act on that child’s behalf.

Most likely the child as beneficiary under the Trust has certain rights. These rights may include the right to remove and replace a Trustee for example. While you are unlikely to appoint your ex-spouse as the Trustee of your Trust, if your minor beneficiaries have the right to remove and/or appoint Trustee’s under your Trust document, your ex-spouse as the legal guardian of the child-beneficiary may be able to remove and replace the Trustee you put in place. Who would they choose? This is not something most people want to happen! The rights of minor beneficiaries under any estate plan needs to be closely examined.

Often, ex-spouses are required to have in place life insurance policies for the protection of the children, or to replace child support or alimony payments. What are the advantages or disadvantages of this insurance policy to be held in an Irrevocable Life Insurance Trust (ILIT)? If the policy is held in an ILIT, who are the Trustees and other beneficiaries? Are there competing interests? Who holds certain rights to change the document that may be adverse to the interests of the beneficiaries, those the ILIT was supposed to protect?

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