What Happens When Family Law Agreements And Estate Planning Documents Conflict?
The interplay between divorce paperwork—specifically, marital settlement agreements or prenuptial agreements—and estate planning documents is a complex one that many people may overlook when drafting an estate plan or when getting divorced.
This is especially true for people whose estate plan is drafted years after the completion of their divorce. People may give little thought to a years-old divorce agreement or to what it says, when doing an estate plan.
Conflicts in Documents and Agreements
The end result can often be an estate plan which conflicts with the terms and agreements that were made in a marital settlement agreement.
One problem in this scenario is litigation; whether in probate court or family court, an aggrieved ex spouse who feels that your estate plan or estate documents conflict with a marital settlement agreement, can bring an action in probate or potentially family law court, to enforce the rights that are set out in the marital settlement agreement.
As a general rule, when estate plans and marital settlement agreement or prenuptial agreement conflict, the marital settlement agreement or prenuptial agreement will win or prevail. Marital settlement agreements are considered to be a contract, and one that cannot be overridden by the terms of an estate plan. The spouse can be treated as a creditor of your estate, adding time and litigation to an otherwise foolproof estate plan. It can lead to being in probate court, when your estate plan otherwise was designed to keep you out of probate court.
The best way to avoid this problem is to plan ahead. The use of a living trust can be helpful—if the living trust is created before a prenuptial is signed, and before the marriage is completed. The living trust can ensure the segregation of your assets, to ensure that they are not considered marital property when and if a potential divorce happens. Just make sure trust property is not commingled with marital property.
Any prenuptial agreement can even include provisions in it, saying that property in the living trust (or any other property, whether in a trust or not), is separate, and not marital property.
Alimony and Probate
Alimony payments by law terminate upon the death of the paying spouse. However, it is possible to include provisions in a marital settlement agreement that alimony will continue, post death.
Of course, the extent of payments will depend on the assets that are being probated, but the spousal obligation will be treated as a creditor on your estate, a creditor that takes priority over anything else you had planned to do with your assets in your estate plan. Recipients of any of your assets may be ordered to continue paying spousal support from those assets, to your former spouse.
Call the Torrance will attorneys at Samuel Ford Law today to make sure that your estate plan works, and is not subject to claims, objections or problems.