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Estate Planning, Divorce and Protecting Assets

People often resist talking about the inevitable, and estate planning involves just that. In our experience, though, we've found that most clients, once they get started and put all the pieces of the estate puzzle together, are actually relieved having gone through the process. When you create an estate plan, you've done all you can to provide for your children and others who are close to you in the event they have to go on without you, figuring out the answer to the question; what is included in an estate plan? 

Here is a list of the instruments that make up the typical estate plan:

  • Life Insurance
  • Last Will and Testament
  • Inter vivos Trust (also known as a Living Trust)
  • General Power of Attorney
  • Healthcare Power of Attorney
  • Living Will

You may wonder, is there a ‘template' estate plan? No two estates are the same. We tailor each plan to the family or individual it is meant to serve. Furthermore, we will offer you the education you need for maintaining and implementing your plan in the future.

You may prepare to modify your estate plan during the divorce, but executing some of those changes before your divorce is final may violate the standing order issued in your case. Keep in mind that your divorce isn't final until the judge signs your decree, so refrain from making certain changes until that happens and discuss these matters in detail with your divorce and estate planning attorney.

Life Insurance

Life insurance is an important component of one's essential estate plan, especially when there are children who will need support. When spousal support or child support is part of your divorce decree, you may be ordered to continue a policy or acquire a policy that maintains your ex-spouse as a beneficiary. You may choose from a number of life insurance products, including term life, variable life, and whole life.

Term Life Insurance

Term life insurance policies provide coverage for a specific length of time.  There is no equity or cash value, so a term life policy is not an investment tool. As you get older, or as your health diminishes, the premium generally increases or, in the alternative, the amount paid on death decreases.  When it comes to cost savings, these policies may be a good option for you and easier on your insurance budget.

Variable Life Insurance

The variable life insurance policy is a combination of insurance and investment, and investments always involve risk. Once the money is taken out to pay the premium, the remainder is invested. For this policy to work as an investment vehicle, more money is paid by the policyholder than is needed to cover the premiums. There is a guaranteed minimum payment on death under the insurance. There is a potential that the invested portion will also provide money on death, but as with any investment, there is no guaranteed rate of return. These policies tend to be much more costly than other life insurance products.

Whole Life Insurance

The whole life insurance policy is a long term approach to insuring a life. The policy will provide coverage over the course of the insured's lifetime at a set premium. Typically, the premium is paid over the duration of the policy, up until the death of the insured. If you are willing to stay with one insurance company for life, this may be an option for you.

A Few Thoughts While Your Divorce Is Pending

When married, it is far simpler to avoid planning an estate because most things automatically go to one's spouse under the state's laws of intestate succession. Planning concerns are usually limited to what happens if both parents are deceased in a common tragic event, such as an automobile accident in which neither spouse survives.

Think about this for a moment, though. If you inherit property or money before your divorce is finalized, then such an inheritance is your separate property and is not subject to division in the divorce. But how is your property distributed if you do not have a Will and you don't survive the finalization of your divorce? This may not be what you want to hear, but your assets — marital and separate — may go directly to your “surviving spouse” under Georgia's laws of intestate succession. Furthermore, your surviving spouse would be first in line to seek probate appointment as Personal Representative of your intestate estate. The reciprocal is also true, of course, should your spouse die without a Will before the divorce is final.

We assist individuals and their families with their estate planning needs, whether it be for asset protection in preparation for divorce or planning for public benefits.  If you have questions regarding planning your estate, call us at (404) 963-9452 today to set up a consultation to help you determine what amount of estate planning is right for you and your family.


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