Can Divorce Impact Estate Planning in TX?

Impact of divorce on estate planningDivorce touches upon every aspect of a person’s life. Two lives that were once united now must go their separate ways physically, emotionally, and financially. Not only does it impact your present-day circumstances, divorce impacts estate planning. 

Perhaps you drew up a will naming your soon-to-be ex-spouse or gave them power of attorney should you become incapacitated. You may be wondering, How does divorce impact your estate planning? Texas law treats certain estate planning documents differently if they name a former spouse.

A Will

The impact of divorce on estate planning begins with one of the most common estate planning documents: the will. In a will, a person (testator) expresses their wishes regarding how they want their property distributed when they die. Typically, the testator names their spouse and children, if any, as the primary beneficiaries of their will. The beneficiaries have the right to inherit the testator’s estate. When a person divorces, typically, they’ll alter their will so that it no longer names their ex-spouse.

But what if a person dies before they get the chance to change their will after their divorce? Texas law recognizes that when spouses divorce, it’s unlikely that they’ll want their former spouse to retain their inheritance rights. If a person names their ex-spouse or the ex-spouse’s relatives as a beneficiary, Texas law acts as if the ex-spouse and their relatives died before the person who wrote the will. This means that none of them will receive any inheritance. Instead, that portion of the estate will pass to the decedent’s other heirs. 

Trusts

Often, people set up trusts as a part of their estate plan. A trust is an arrangement where a third party (the trustee) holds another person’s (the settlor’s) assets for the benefit of the trust beneficiaries. People sometimes set up either revocable or irrevocable trusts so that their assets can be more easily distributed to their beneficiaries when they die. 

Texas law treats trusts like wills after a divorce. As with a will, if a settlor names a former spouse as a beneficiary or trustee for a trust, Texas law treats the former spouse as though they died before the settlor. This is one of the many reasons it’s important to name an alternate trustee or alternate beneficiary when you create a trust.

Life Insurance Policies

The purpose of life insurance is to help your closest relatives and family financially when you die. They could use it to pay rent, mortgage, or funeral expenses. In any event, you likely want the people closest to you or those who financially rely upon you to benefit from the life insurance. Thus, spouses typically name each other as life insurance beneficiaries. 

When you divorce, it’s unlikely that you want your ex-spouse to remain your life insurance beneficiary. Thus, if you’ve not changed your primary life insurance beneficiary after divorce, Texas law ignores this designation. Instead, your life insurance will be distributed to your alternative beneficiary or your estate if there are no alternative beneficiaries.

However, a life insurance policy or retirement account governed by the Employee Retirement Income Security Act of 1974 (ERISA) is regulated by federal, not Texas, law. An ERISA policy does not automatically remove a former spouse as a beneficiary when you divorce. You will have to take specific steps to remove them as a beneficiary. 

Powers of Attorney

Typically, medical and financial powers of attorney are a part of your estate planning package. These designate a person who will make medical and financial decisions on your behalf if you become incapacitated. A divorce terminates an ex-spouse’s designation under these documents as well.

Revise Your Estate Planning Documents After Divorce

As you can see, the effect of divorce on estate planning is significant. Even if you have designated alternative beneficiaries or heirs, you should discuss your estate plan with an attorney and make alterations as necessary when you divorce. The purpose of estate planning documents is to clearly and accurately reflect your wishes. It’s important to update these documents when you have a significant life change, such as a divorce, so your family is clear on your desires. 

And what if you want to keep your former spouse as a beneficiary to your estate or life insurance policy? In that case, you must take specific steps after the divorce to ensure they’re not automatically disinherited. An attorney can guide you through this process so that your wishes are clear and upheld after you’ve passed. 

Speak with an Attorney About the Impact of Divorce on Estate Planning

If you’re in the process of divorcing, you should speak with your attorney about how your divorce impacts estate planning. You want to make sure that your wishes are clear as you go through major life changes. Fortunately, the lawyers at The Larson Law Office can guide you through the Texas divorce process and advise you on your post-divorce estate planning options. We can help you properly provide for your family’s future. Contact us today.

H Texas Magazine Taps Larsons as 2018 Top Family Lawyers in Houston

Congratulations to Firm partners Diana Larson and Erik Larson for each being selected to H Texas Magazine’s 2018 list of Houston’s Top Family Lawyers.

In its November 2018 issue, H Texas Magazine states that it compiles its list of Top Lawyers in Houston based on “nominations from clients and peers as well as rigorous background checks.”

To contact Diana or Erik about retaining them to represent you in your divorce or child custody case, contact them at (713) 221-9088.

Diana Larson and Erik Larson Receive 2018 AV Preeminent Rating from Martindale-Hubbell

The Firm congratulates Diana Larson and Erik Larson on each receiving a 2018 AV® Preeminent™ rating from Martindale-Hubbell Peer Review Ratings.

An AV® Preeminent™ Rating “is a testament to the fact a lawyer’s peers rank him or her at the highest level of professional excellence.” This distinct achievement of professional excellence is earned through a strenuous Peer Review Rating process, which places Diana Larson and Erik Larson among the elite of fellow legal professionals.

This is also Mr. Larson’s 15th consecutive year to receive an AV® Preeminent™ rating from Martindale-Hubbell Peer Review Ratings, since 2003.

Martindale-Hubbell has been conducting peer-review ratings for over 100 years to identify and recognize lawyers with the highest legal ability and ethical standards. Lawyers are rated by their peers — attorneys and judges — in the categories of legal knowledge, analytical capabilities, judgment, communication ability and legal experience as well as a high level of ethical standards.

For experienced and high quality legal representation in divorce and family law cases, contact The Larson Law Office today.

H Texas Magazine Selects Larsons for 2017 Houston Top Family Lawyers List

Congratulations to Firm partners Diana Larson and Erik Larson for each having been named to H Texas Magazine’s annual list of Houston Top Family Lawyers for 2017.

In its July 2017 issue, H Texas Magazine states that it compiles the list of Top Lawyers in Houston based on “nominations from clients and peers as well as rigorous background checks.”

To contact Diana or Erik about retaining them to represent you in your divorce or child custody case, contact them at (713) 221-9088.

Diana Larson and Erik Larson Receive 2017 AV Preeminent Rating from Martindale-Hubbell

The Firm congratulates Diana Larson and Erik Larson on receiving an AV® Preeminent™ rating from Martindale-Hubbell Peer Review Ratings for 2017.

An AV® Preeminent™ Rating “is a testament to the fact a lawyer’s peers rank him or her at the highest level of professional excellence.” This distinct achievement of professional excellence is earned through a strenuous Peer Review Rating process, which places Diana Larson and Erik Larson among the elite of fellow legal professionals.

Martindale-Hubbell has been conducting peer-review ratings for over 100 years to identify and recognize lawyers with the highest legal ability and ethical standards. Lawyers are rated by their peers — attorneys and judges — in the categories of legal knowledge, analytical capabilities, judgment, communication ability and legal experience as well as a high level of ethical standards.

Diana Larson and Erik Larson Named to 2016 Texas’ Top Rated Lawyers List by Martindale-Hubbell®

The Firm congratulates both Diana Larson and Erik Larson for being selected to Texas’ Top Rated Lawyers for 2016 by Martindale-Hubbell®, ALM, and Law.com in their yearly list.

According to Martindale-Hubbell®, “To be included in the guide, lawyers must have received an AV Preeminent® rating from Martindale-Hubbell®–a prestigious ranking demonstrating that a lawyer’s peers have ranked them at the highest level of professional excellence.”

To contact Diana or Erik about representing you in your case, contact us at (713) 221-9088.

Diana Larson and Erik Larson Named to Houston’s Top Lawyers 2015

The Firm congratulates Diana Larson and Erik Larson for being selected to H Texas Magazine’s annual list of Houston’s Top Lawyers for 2015.

In this issue, H Texas Magazine states that it compiled the list of 2015 Top Lawyers in Houston based on “nominations from clients and peers as well as rigorous background checks.”

To contact Diana or Erik about representing you in your case, contact us at (713) 221-9088.

Diana Larson Receives AV Preeminent Rating from Martindale-Hubbell

The Firm is pleased to announce that founder and partner Diana Larson has earned an AV® Preeminent™ rating from Martindale-Hubbell Peer Review Ratings.

An AV® Preeminent™ Rating “is a testament to the fact a lawyer’s peers rank him or her at the highest level of professional excellence.” This distinct achievement of professional excellence is earned through a strenuous Peer Review Rating process, which places Diana Larson among the elite of fellow legal professionals.

Martindale-Hubbell has been conducting peer-review ratings for over a century to identify and recognize lawyers with the highest legal ability and ethical standards. Lawyers are rated by their peers — attorneys and judges — in the categories of legal knowledge, analytical capabilities, judgment, communication ability and legal experience as well as a high level of ethical standards.

Larsons Named to Houston’s Top Lawyers List by H Texas Magazine

The Firm would like to congratulate Diana Larson and Erik Larson for being selected to H Texas Magazine’s annual list of Houston’s Top Lawyers for 2014.

In its July 2014 issue, H Texas Magazine states that it compiles the list of Top Lawyers in Houston based on “nominations from clients and peers as well as rigorous background checks.”

To contact Diana or Erik about retaining them to represent you in your case, contact them at (713) 221-9088.