You might not think about estate planning when you are in the middle of a divorce – but you should. Remember, one of the primary purposes of estate planning is to make sure that your property goes where you want it to go, while you are alive and after you die. You can’t do this if you haven’t properly handled your property at the time of divorce (or even before). This article answers some common misconceptions about property and divorce.
Misconception #1:
I have separated from my spouse, but we haven’t gone through with the divorce yet. We’ve already divided our property, so what’s mine is mine and what’s my ex’s is my ex’s.
Truth:
Wrong. As long as you are married, if one of you dies, the other has a right to some of your assets in Virginia. Even if you have a will and you have named someone other than your spouse as a beneficiary, your spouse still has the right to elect to receive up to 50% of your estate if you were married at the time of your death.(The length of marriage and assets of the surviving spouse are taken into account to determine the percentage. See § 64.2-308.3 of the Virginia Code).
Virginia also allows the surviving spouse to receive other allowances from the assets of the decedent spouse’s estate (family allowance, exempt property allowance, and homestead allowance).
Bottom line, you are legally bound to each other as long as you are married, unless you both have signed a valid marital agreement waiving these rights (see next misconception).
Misconception #2:
My spouse and I are amicably separated and have already divided our assets, so we don’t need a marital separation agreement.
Truth:
Wrong. You should create a marital separation agreement and ensure that your soon-to-be ex specifically waives any claim to the assets that are yours. A marital separation agreement (sometimes called a property settlement agreement) is a document that defines who gets what in a divorce. It is binding the same way any contract is binding and is fully enforceable in court. This agreement becomes part of the divorce order that the judge signs.
These agreements are very important because they specifically define which assets belong to whom (and who is responsible for marital debt). While many divorcing couples may believe that the divorce (and post-divorce) will go smoothly, the fact is, this cannot possibly be known. Parties to a divorce change their positions regularly given all of the emotion involved, and having a written agreement will protect you in case this happens.
Misconception #3:
My ex and I have all of our property divided in the divorce decree, so I don’t need to retitle my assets.
Truth:
Wrong. A decree is simply the judgment of the court, but it does not have the effect of actually retitling the property itself. For instance, if a home is owned by both spouses and the court orders that the home be given to one spouse, then a deed needs to be executed that transfers the ownership of the home to that spouse only. Bank account assets need to be retitled, too. So does any debt.
Having properly executed documents and retitling property can save you a lot of grief during and after your divorce.
To schedule a free consultation, contact Lisa at (866) 980-0838.