Colorado insurance trust in divorce
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Powers of attorney are some of the few documents that you can legally alter as you are going through a divorce. And, since medical personnel or a judge will likely defer to the primary person listed on medical or financial power of attorney , it is not a bad idea to revise these documents sooner rather than later. You likely have several legal documents with beneficiary designations, including k s, pensions, stocks, and life insurance policies. Since, in many cases, these assets pass outside of a will and a soon-to-be ex-spouse is named as the primary beneficiary, you may want to jump on making changes to those documents.
However, care needs to be taken.
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Part of that injunction restrains both parties from cancelling, modifying, or allowing any policy of life insurance to lapse for nonpayment of premium that names either party or their children as beneficiaries. Even once the divorce is final, it is important to make sure that all changes to beneficiary designations align with the divorce decree. The idea being that if something should happen, the ex-spouse will get the money they would have gotten through spousal support. The idea is that if the person did not get around to redo a will and then got divorced, that statute would be triggered, and the assets would be passed to the next beneficiary.
However, this statute only applies to the ex-spouse. It does not include anyone else mentioned in the will, relatives of the ex-spouse, for example. By the time you are done with your divorce, you may be sick of the legal system and sick of lawyers. There are, however, several critical estate planning tasks you should address as soon as possible after your divorce is complete. For many people, a divorce filing is the first significant legal event of their lives.
Divorce and Estate Planning
So follow along and let us try to help you traverse the many pitfalls of estate planning after divorce by either bringing to attention your unforeseen issues or reinforcing known concerns, and the priority status you should attach to finalizing their details. First, and maybe most important, you need to review your designated beneficiary instructions on your retirement accounts and life insurance policies.
While there can be state laws and federal requirements that limit or prohibit your ability to change beneficiaries until your divorce is complete, it is important to know where and when you can make these changes. Most states have some form of prohibition specifically against making changes during the divorce process, and then changes can be made after the divorce have been finalized.
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Your designated beneficiary instructions are contracts with the companies to which you have provided them, the purpose of which is to get this money out to those you have listed almost immediately. They do not care about your divorce or how much animosity you may now have for your ex.
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Although many states, Colorado among them, have statutes that authorize an insurance company or stock brokerage to treat a spouse from whom you got divorced as though they pre-deceased you even if you never removed them from your instructions, many companies ignore those statutes and follow the instructions as written, even if they clearly should have been updated. Second, after any divorce, you must review and revise your power of attorney documents.
- High Asset Divorce?
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A person with extensive insurance and trust knowledge may be brought into a high-asset divorce to help determine the true current values of any policies and for the crafting of a recommendation on how those policies can be divided in an equitable manner. While the cost of lifestyle maintenance is often talked about, it is not always treated with all of the financial acumen and weight that it should be.
A lifestyle analysis is a crucial part of any high-asset divorce, particularly when one spouse is a high earner and the other one is not. A complete and detailed forensic account of how the money was spent over the course of the marriage can go a long way toward helping both spouses reach a fair conclusion.
The consideration of your lifestyle will play a part in your financial future as it will affect what property and support, if any, you receive, as well as the distribution of debts and other liabilities from the marriage. Naturally, this is an area that you need to make sure receives its proper focus during the proceedings.here
Divorce, wills and Colorado law
Your attorney will work to ensure that you are able to maintain your lifestyle after your divorce without immediately facing a financial struggle. When you have a lot of properties and assets, substantial retirement accounts, stock or business holdings or other benefits, they will be addressed during your divorce.
With an experienced and aggressive attorney, you will have a better chance of being aware of all the assets involved and what you are entitled to. Since divorce laws vary by state, having an attorney who is familiar with Colorado laws also means you will be able to receive specific guidance as to how the divorce will move in this state.