A quick and summary response to the above-posed blog headline query is this: Maybe.
As noted recently online in a legal publication focusing upon the sometimes logical nexus between divorce planning and estate administration, some splitting-up partners do indeed need to turn their attention to the latter when finalizing the details of their marital dissolution.
And many of them don’t, adds that overview, which points out that, on top of divorce-centered concerns that often dominate separation negotiations (such as child custody, property division and child/spousal support), “there are additional considerations [for many couples] involving their estate plan.”
Here’s one of those noted concerns, posed in the form of a question: What if a so-called “property settlement agreement” (PSA) requires the divorcing parties to maintain a requisite amount of life insurance to serve as protection for minor children, but the details concerning that vitally important protection are not stated with any specificity in legal documents?
That can create a mess, indeed. In fact, it likely will, with the National Law Review article cited above stating that “it may be helpful to consult with an estate planning attorney to ensure that the PSA permits some level of flexibility from an estate planning perspective.”
Here’s why, underscored once again by a question: What if a policy simply provides that all payments go to a former spouse for the kids, but there is no guidance whatever on how that money should be parceled out, or when? And what if both spouses die, leaving minor children without a named guardian? What if a former-spouse beneficiary spends the money in his or her virtual discretion, with little oversight? What if a trustee in a trust vehicle established on behalf of the kids predeceases them?
Many things can happen, and studied and timely input from a proven estate planning attorney can help ensure that unanticipated — and unwanted — results don’t occur regarding life insurance that is intended to provide children with support in the event of an untimely parental death.
An experienced estate administration attorney can answer questions and take a close look at any estate plan featuring a divorce-related life insurance policy with minor guardians as the named beneficiaries.