New Jersey couples who are considering a divorce may have to think beyond their immediate concerns, such as child support or asset division. Many couples also find it beneficial to create property or marital settlement agreements, or PSAs, that include estate terms. Couples are also advised to look into these kinds of remedies as early as possible so that unexpected events, such as death or medical infirmity, don’t prevent outstanding issues from being resolved effectively.
PSAs are used to define the responsibilities each party has to the other. By keeping estate matters in mind during the execution of a regular PSA, it may be possible to retain some leeway for future decision making. Reviewing a PSA can also help complicated estate plans function as intended without incurring overbearing taxes or failing to distribute assets to the right beneficiaries.
PSAs can explicitly specify how assets like life insurance proceeds are to be used, but in some cases, they fail to address such issues and leave each party to act how they please. PSAs that let people name living trusts for insurance purposes, for instance, may include clauses that specifically detail how policy payouts must be used with regard to beneficiaries. They can also account for events like what happens when trustees or beneficiaries die.
Proper estate planning demands an in-depth understanding of how various laws impact the viability of different structures. In addition to potentially incurring tax obligations, for instance, certain types of trust may be prohibited or limited in certain jurisdictions. While PSAs and other tools can help, divorces and remarriages also introduce the possibility of unforeseen future disputes. Those who want to take advantage of mechanisms like trusts should ask an attorney how a future divorce will impact them.