Saturday, January 31, 2009

Austin Divorce Lawyer Tip: Post-Divorce Planning with Insurance and Retirement Benefits.

Oftentimes divorce attorneys are focused on getting all of the divorce issues handled and do not discuss estate planning issues with you. At the inception of any Divorce, it is recommended that you seek the advice of an experienced Estate Planning Attorney to update your will, living will, medical powers of attorney, and durable powers of attorney. Although Texas law provides that after a Divorce, beneficiary designations as to insurance proceeds and retirement benefits are treated as having been automatically revoked under Texas Family Code sections 9.301 and 9.302, you should not depend upon this. The insurance company or Plan Administrator will not be liable for paying in accordance with your instructions, unless they get prior notice of the claim of another before distributing the funds and then fail to interplead the funds into the registry of the court. Also, you may not have considered some of these issues:

What if a spouse should die during the pendency of the Divorce, will my spouse get all of my life insurance and retirement benefits?

What happens after we have settled our case (by mediation, negotiation, in a Rule 11 Agreement, or otherwise), but before the divorce is actually finalized?

Do you want your spouse making medical decisions if you should get seriously injured?

Do you want your spouse to have access to all of your assets, bank accounts, safe deposit box, and mutual funds in the event of your incapacity?

You should also be aware that once the Divorce case has been filed, you may not be permitted to change these designations due to a Temporary Restraining Order, Temporary Injunction, Local Rule, or as we have in Austin, Texas, the TRAVIS COUNTY STANDING ORDER REGARDING CHILDREN, PROPERTY AND CONDUCT OF THE PARTIES. As a result, you need to make these considerations prior to the time the Divorce is filed.

This is where divorce law intersects with estate planning and probate law. Anyone who may be planning on a divorce should think about these issues and consult their Divorce Attorney to come up with a plan to ensure that these matters are addressed.