How Divorce Affects Estate Planning in Colorado
It’s sad to say, but statistically, almost half of all marriages end in divorce in the United States. What’s more, the state of Colorado ranks among the highest number of divorces in the nation. With divorce becoming increasingly common in our society, it is important to understand the implications this could have on your estate planning.
Your wills, your retirement plans, your trusts, and more could all be directly affected by the end of a marriage. But so long as you are aware of the implications under the law, you may be able to properly defend your assets in the unfortunate event of a divorce.
How Does Colorado Law Change Estate Planning in the Event of a Divorce?
In Colorado, a divorce results in the automatic revocation of an ex-spouse as the beneficiary or fiduciary of your will or trust. This means that your ex-spouse and their relatives are no longer able to claim any assets in your estate. Children that you and your ex-spouse shared will still be eligible for claims, however.
While some may consider these laws beneficial, they could create major complications if one spouse passes away while the two are engaged in divorce proceedings.
Colorado law dictates that the rules surrounding divorce’s impact on estate planning depend on the timeline of the writing of the wills, the start of the marriage, and the eventual divorce. If you get divorced after the will was created, your ex-spouse is automatically no longer entitled to any assets from the estate. They are also automatically eliminated from being your will’s executor. If, however, the will named the other party before the two of you were ever married, then they may potentially have certain statutory rights to assets even after divorce.
Estate Planning Actions That You Should Not Take in a Divorce
Any action taken to hide or move assets during a divorce is prohibited by law. Not only will the act be harshly frowned upon by any divorce court judge who may make final determinations in your divorce, but hiding assets or money during divorce proceedings is also punishable under the civil law code.
You are prohibited from funding a new revocable or irrevocable trust during a divorce. Nor can you modify any existing life insurance or benefit plans.
When is it Time to Start Over?
Going through a divorce can be one of the most stressful times of our lives and estate planning isn’t exactly relaxing either. However, after the divorce is done, it is time to get back to work.
Following a divorce, it is necessary to begin revising wills and trusts in order to keep your estate plan up to date. Contact our law firm today at (720) 420-1039 to learn more about how we can help you with your situation.