There is a reason why estate planning attorneys stress that you should review your plan regularly, especially after significant life changes such as divorce. Due to the need for your assets to get divided when a marriage ends, the properties couples own together create uniquely challenging issues when subjected to distribution laws. They have significant legal and financial implications. Though we could approach this issue in several ways, we will explore how divorce affects your property and why it could subsequently impact the probate process.
Common Oversights
When a couple decides to get divorced, one of the concerns often revolves around what happens to their property. For most people, it is their most valuable asset. They have invested large sums of money in hopes of a positive return. People may be suddenly concerned about how much money they can lose if they no longer own their homes. There are many solutions that divorcing couples choose to employ. They may put the house on the market and divide the proceeds. However, if one party desires to keep the property, they may need to buy out the other person’s share. This involves assessing the property’s value and ensuring a fair price is paid for their share of the property.
It’s important to note that simply getting divorced doesn’t automatically change the title or deed of owned property; legal steps are necessary to transfer it into one person’s name. Updating ownership avoids complications during probate proceedings later on. Moreover, if a mortgage is involved, the person retaining ownership must refinance it in their name. This step releases the other individual from any financial obligations.
The Impact on Probate
Probate is a court process to settle someone’s estate after they pass away. If an individual who has gone through a divorce still has their ex-spouse listed on the property title, it will complicate the probate proceedings. This results in the property not being passed down to the intended heirs if the deceased did not update their will after the divorce. For instance, if a divorced person passes away without removing their ex-spouse from the property title, their ex-spouse may still have a right to that property. This leads to disputes among heirs, especially if the deceased has alternatively indicated their intentions with the property.
This emphasizes how crucial it is to update estate plans and property titles after a divorce. Doing so ensures that properties are divided according to their wishes rather than relying on outdated legal documents. When no will exists, state intestacy laws come into play. They dictate how the property will be distributed—and it is improbable that they align with the deceased’s wishes. Updating estate plans after a divorce ensures your final wishes are honored.
Contact Luis E. Barretto & Associates
Getting a divorce significantly impacts property ownership and estate planning. It is crucial for individuals who have been divorced to take steps to update property titles and estate plans. This ensures that their assets are dispersed how you intended.
If you are currently going through a divorce or have recently divorced and need guidance on incorporating your properties with an estate plan, we are here to assist you. Schedule a free initial consultation with us to discuss your situation further.
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