After people in New Jersey have completed their estate plans, it is important that they review them regularly. It is especially important for people to review and change their estate plans when they decide to get divorced so that they don’t accidentally leave their estates to their ex-spouses when they die.
If a person has a large amount of money before he or she gets married, the person may keep it as separate property by placing it in a trust that is only in the person’s name. If the person adds his or her spouse as a beneficiary and later decides to divorce, the spouse will receive a portion of the trust if the person dies before the divorce is final.
In one illustrative case, a man who had received a large settlement prior to his marriage signed a prenuptial agreement with his wife that the money would remain as his separate property if they divorced. He placed this money in a trust. Later, he added his wife as an 80 percent beneficiary of the trust with the provision that she would receive that amount if they were still married on the date of his death. The couple later filed for divorce, and the man died two days before the decree was issued. His ex-wife received 80 percent of his trust because they were technically still married on the date of his death.
This demonstrates the importance of reviewing estate plans whenever major life changes occur. If people fail to change their beneficiaries, they might accidentally leave their estates to their ex-spouses instead of to their families. People might want to talk to their estate planning lawyers whenever major life changes occur. Some that might prompt a visit include having new children or grandchildren in addition to a divorce.