Law Tips – Post Divorce Estate Traps

Where are the estate traps that can hurt your clients after a divorce?  Our Law Tips this week shares some brief reminders that may help avoid turmoil and tragedy.  During ICLEF’s recent CLE on “120 Hot Tips in Estate Practice”  Anne H. Poindexter, Campbell Kyle Proffitt LLP, Carmel, Indiana, provided some important estate practice reminders in “Post-Divorce Planning Needs.” Mrs. Poindexter’s practice concentrates in the areas of civil litigation including will and trust contests, probate and trust administration, estate and wealth transfer planning, including various aspects of family law as well as public utility law.

The possible pitfalls that Anne advised should be given particular attention “Post-Divorce” are as follows:

1. Upon finalization of divorce cases, require all divorce lawyers in your firm to utilize a “closing letter” pointing out, among other things, the need to review:

•  Life insurance, retirement, beneficiary designations, etc.

•  Wills, trusts, powers of attorney.

These need to be updated, and you can help!

2. Understand the statutory provisions concerning the effect of divorce or annulments on wills. Per I.C. 29-1-5-8, provisions in favor of a former spouse are revoked.

3. Understand the effect of divorce or annulment on trusts. Per I.C. 30-4-2-5, provisions of a revocable trust in favor of a former spouse are revoked unless:

•  The trust is irrevocable

•  Trust is created post-divorce or

•  Trust is created by court order.

4. Be aware of case law on life insurance designations in favor of a former spouse. Divorce alone does not change the beneficiary named. A child may have an enforceable interest pursuant to property settlement agreement of parents.

•  Contract of Insurance provisions may provide some relief or guidance.

5. Prior Indiana case ruling language in a property settlement agreement may serve as a “waiver” under ERISA for retirement beneficiary designations provide no comfort following a 2009 U.S. Supreme Court. Kennedy v. DuPont 555 U.S. 285 (2009).

Our appreciation to Anne Poindexter for sharing her expertise for this Law Tips blog. 

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The “120 Hot Tips In Estate Practice” seminar includes pointers from a total of 24 experienced Indiana lawyers.  Additional topics in this area of law will find their way into Law Tips in the upcoming month.  Stay tuned as we bring you important reviews and updates in guardianships, asset valuation and more.

You can take the opportunity in March to learn from the full array of ICLEF faculty in this six-hour Estate Law CLE extravaganza. Choose from Video Replay Seminars in South Bend, Versailles and Chicago or as an Online / On Demand Seminar by Clicking Here. Or, consult  ICLEF’s Calendar of Events for the most up-to-date CLE seminars.

Do you have comments on this blog or other ICLEF matters?  Send us your suggestions by email at nancy@iclef.org or leave a comment at www.facebook.com/ICLEF.  Thanks for reading Law Tips.

ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN

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