So many people these days are filing for divorce after a few years of marriage and even after 30 or more years of marriage. The problem is that they are so caught up in the midst of the divorce proceedings, attorney fees and legal documents, that they forget about their previously executed estate planning documents.
In a recent case, the husband and wife were in the middle of divorce proceedings. The parties had entered into a settlement agreement but that agreement had not been entered by the court. In fact, an entry for judgment of divorce had not been signed by the judge. Prior to this settlement agreement being signed by the judge but after the settlement meeting, the husband died. The court held that the divorce proceedings were terminated by the death of the spouse and that the settlement agreement was null and void.
The court held that the settlement agreement must be entered as a judgment to be recognized. The court’s reasoning for this is that even though a settlement agreement has been entered into, the parties could have decided to settle differently at the last minute, they could have reconciled or they could have even decided to remain married. Until the judgment of divorce is final, the divorce is not final and the division of assets is not final. Ultimately the assets would transfer to the spouse, especially if the accounts were still joint and the wife as still the beneficiary. Therefore, if you are in the process of divorcing, do not wait until the divorce is over to review your estate planning documents or to review your beneficiary designations. You may want to modify the terms of your will or your trust and even update your beneficiaries to name someone other than your soon to be ex-spouse.