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It’s a very common situation. You and your spouse raise two wonderful children. You prepare wills and other estate planning documents to protect your children. Then the marriage goes sour. You and your spouse divorce. You’ll need to update your wills and other documents to protect your children? Another common situation is that you and your spouse did not have wills. Now the divorce forces you to think – how do I make sure my children get my share of the estate and not my ex-spouse or my ex-spouse’s new spouse?

What happens if you already designated your spouse as a beneficiary in your will?

Most married spouses prepare wills that provide that the surviving spouse will receive the entire estate of the spouse who died. The wills also provide that the children will inherit your estate if your wife or husband dies before you do.

While divorce ends the marital relationship, it does not automatically terminate the right of your spouse to inherit your estate – if you designated her/him as a beneficiary in your will. Your ex-spouse will be entitled to whatever part of your estate you gave her/him – unless you change your will. You can change your will by using a codicil, an amendment to your current will. You can also destroy the old will and write a new will.

If you did not have a will, then the intestate laws provide that your spouse is entitled to a share of your estate in Pennsylvania. If you divorce, then your ex-spouse is no longer your spouse and cannot take any part of your estate. Your assets will then be distributed to your children.

How are non-probate assets distributed when a spouse divorces?

Generally, arrangements are made to divide the marital assets when spouses divorce correctly. Often, one spouse buys out the other spouse’s interest – through a sale or by swapping some assets for other assets. For example, the marital home is usually transferred to the spouse who has physical custody in return for the custodial spouse waiving her/his rights to other assets. When the assets are transferred or sold, the ex-spouse no longer has a claim to the property. When you die, your assets then pass according to your new will or the intestate laws of Pennsylvania.

Some spouses may agree to joint ownership of a home or business even after the divorce is over – to help ensure the children have a place to live and are provided for while they are under 18. Homes that are titled as tenants by the entirety become joint interests with a right of survivorship after a divorce. Ownership of the business depends on the terms of the divorce agreement. Your wife may be entitled to the home or the business when you die in these situations. 

Assets such as IRA accounts usually name a specific beneficiary. If you named your spouse as the beneficiary, then you need to remove your ex-spouse as beneficiary and name your child or children as the beneficiaries. Generally, IRA accounts only allow for the naming of a beneficiary – without conditions. You usually can’t say the funds go to my wife, but they also go to my children in some cases.

What other ways can you ensure your children are protected when you die?

Instead of relying on wills, how the assets are titled, or who is named a beneficiary, many parents use trust agreements to protect their children. With a trust, the parents place funds into the trust – when they create the trust. Alternatively, the trust may become effective on your death. Then, a trustee is named to manage the trust. The trustee manages the trust according to the terms of the trust agreement. Parents often use trusts if a child has special needs to ensure the child receives the trust income and government benefits.

Retirement trusts are a way of placing conditions on an IRA account so that a spouse (or ex-spouse) can use the trust income – but the principal is paid to the children when the spouse/ex-spouse dies.

If you go through a divorce, you should speak with an experienced estate planning lawyer. At Antanavage Farbiarz, our Harrisburg wills and estate planning lawyers have advised parents, seniors, and anyone who needs to do estate planning for 70 years. We’ll review your needs and ensure that you create new documents and modify or terminate current legal documents – so that your children are protected. Call us at (610) 562-2000 or use our contact form to schedule an appointment to discuss all your estate planning needs. 

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