Updating Will & Estate Planning Documents on Divorce / Separation
To schedule an appointment, contact our law firm at 403-400-4092 or Chris@NeufeldLegal.com
When your marriage or common law relationship comes to an end, even before a divorce is finalized, it is important that you appropriately deal with and revise your will and other estate planning documents to reflect your situation going forward, this includes:
A. Your Will and/or Revocable Trust
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Your will and any revocable trusts are the cornerstone of your estate plan. At the end of a marriage or common law relationship (adult interdependent relationship), it is crucial to update your legal documents to reflect your new wishes.
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Will: Although a finalized divorce will revokes provisions in a will that name your former spouse as a beneficiary or executor, you should not be waiting until the divorce is finalized. A mere separation, even if the spouses have been living apart for a long time, does not revoke a will. If a person dies while separated but not yet divorced, and their will names their spouse as a beneficiary, that gift is still valid. The end of a common law relationship, pursuant to the Wills and Succession Act (Alberta), results in one's ex-partner being deemed have predeceased for purposes of being an executor, trustee and/or beneficiary in the will. Nevertheless, as always, the devil is in the detaila, such that it is strongly recommended to create a new will to ensure your assets are distributed exactly as you intend.
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Revocable Trusts: If you and your former spouse created a revocable living trust together, you will likely need to dissolve it and create a new one individually. Even if you have an individual revocable trust, you must update it to remove your ex-spouse as a beneficiary or trustee.
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B. Beneficiary Designations
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This is one of the most critical steps, as beneficiary designations often override your will. You need to update the beneficiaries on all your "non-probate" assets.
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Life Insurance: The beneficiary you named on your life insurance policy will receive the death benefit, regardless of what your will says.
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Retirement Accounts: This includes Registered Retirement Savings Plans (RRSP), Registered Retirement Income Funds (RRIF), Tax-Free Savings Accounts (TFSA), Life Income Funds (LIF) and pension plans. The designated beneficiary will inherit these assets.
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Bank and Investment Accounts: Any accounts with "payable on death" or "transfer on death" designations must be updated.
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C. Powers of Attorney and Personal Directives
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Powers of attorney and personal directives These documents give someone the authority to make financial and medical decisions on your behalf if you become unable to do so yourself. It is highly likely you will want to name new agents and fiduciaries.
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Financial Power of Attorney: When marriage end, spouses separate and adult interdependent relationships end, removing one's (former) spouse or adult interdependent partner from being given legal authority to manage your finances and property in the event of your incapacity should be a priority.
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Healthcare Personal Directive: When marriage end, spouses separate and adult interdependent relationships end, removing one's (former) spouse or adult interdependent partner from being given legal authority to make medical and health-related decisions for you in the event of your incapacity should be a priority.
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D. Irrevocable Trusts
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Irrevocable trusts are much more complex. Because they are designed to be unchangeable, your ex-spouse may remain a beneficiary. Modifying an irrevocable trust is a more involved legal process and may well require judicial intervention, and will be heavily dependent on the the legal language contained in the trust instrument.
The legal complexities that can arise when a marriage or adult interdependent partner relationship comes to an end are such that prompt action should be taken with respect to all estate planning matters, engaging with a knowledgeable lawyer so as to take the appropriate steps to protect your personal interests and re-structure how your inheritance is appropriately dealt with.
Contact our law firm today to learn how our legal team can help you with addressing your personal legal situation as it relates to your will and other estate planning arrangements, whether you are separated, divorcing or ending an adult interdependent partner relationship. Contact our law firm at 403-400-4092 or via email at Chris@NeufeldLegal.com to schedule a confidential initial consultation.
IMPORTANT NOTE: This website is designed for general informational purposes. The site is not designed to answer specific questions about your individual situation or entitlement. Do not rely upon the information provided on this website as legal advice in respect of your individual situation nor use it as substitute for individual legal advice. If you want specific legal advice, you need to engage a lawyer under established legal engagement procedures that have been specifically agreed to by that lawyer.
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