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Does divorce order trump estate planning?

One estate consideration that individuals might face during second or later marriages is that a divorce order might exist that impacts how probate matters will be decided. How you approach estate planning in this type of situation depends on a variety of factors, and you do want to be sure both parties in the new marriage are aware of previous divorce decrees that could come into play.

For example, one couple was married after the man had been previously married. At the time of the marriage, he had two minor children with his first wife. He also was party to a divorce order that required him to maintain $300,000 worth of life insurance that would be paid to his children if he passed away.

The man did have the appropriate life insurance, but he'd listed his current wife as the beneficiary. He did not, at the time, have a will or other estate document. According to probate laws, a life insurance policy does not have to enter probate. It automatically pays to the beneficiary upon the death of the person named in the policy.

Thus, in this case, the life insurance benefit would pay to the second wife without a requirement for her to pay it to the children of the first marriage. However, because of the divorce order, the children of that marriage would have a case to sue for $300,000 from the man's estate should the current wife not pay over the life insurance benefits.

Ensuring that you understand how a divorce impacts your estate planning is critical to protecting all your heirs. Working with an estate law professional lets you consider all options and understand the implications of various types of law and situations on your estate.

Source: MarketWatch, "Can I leave my stepchildren nothing if my husband dies?," Quentin Fottrell, accessed Nov. 25, 2016

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