Why It is Important to Review Your Wills and Beneficiaries When Separating
During your life, you have probably thought about or even started the process of setting up a Will and deciding who will be the beneficiary of your estate when you pass away. However, getting married changes the way the law reviews your estate after death.
There are certain estates rights that arise by virtue of being married:
- The right to intestate succession in the estate of the other spouse when there is no will.This means the property will be divided by the terms of the statute and not the specific desire of the deceased party as may be provided in a Last Will and Testament.
- The right to claim or succeed to a homestead in real property of the other spouse
- The right to petition for an elective share of the estate of the other spouse.The option exists to take either the elective intestate share or life interest in lieu of this share in the event you do not agree with what was left to you under the other spouse’s Last Will and Testament.
- The right to any year’s allowance in the personal property of the other spouse
- The right to administer the estate of the other spouse.
Are There Other Rights that a Spouse Receives Through Marriage?
In addition to the estates rights listed above, often married couples have life insurance policies and retirement benefits naming the other party as a beneficiary.
North Carolina offers some protection for parties who find themselves separated under NC. Gen. Stat. 31A-1 in cases involving spouses that voluntarily separates and lives in adultery or abandons the other spouse unjustifiably.
This statute prevents the “at fault” spouse from having the above-noted rights when they wrongfully abandon or live in adultery at the time of the innocent spouse’s death.
Also, note that the protection does not run both ways, meaning if you left the marriage to live with another person, your estranged spouse could still benefit from the above-noted rights until you are divorced.
At the point of divorce, the state will eliminate these rights, which would apply to both parties.
Do You Need to Change Beneficiary Status to Personal Accounts After Divorce?
Another very important consideration is life insurance and retirement benefit account beneficiaries. Because these benefits are contractual in nature, if you fail to change your beneficiary to someone other than or estranged spouse (even after divorce), they will receive the funds from the policy or retirement account regardless of any fault considerations.
North Carolina’s One Year Separation
Because of this policy, a period of one year when the unforeseeable may happen and your estate or life insurance/retirement benefits may be paid to your estranged spouse if these matters are left unaddressed.
Because of this risk, we encourage all of our clients to review their Last Will and Testament or have one prepared. Do not forget about all life insurance policies and retirement accounts with regard to beneficiary selection. We recommend to make any changes our clients feel are necessary in light of their separation.
Keep in mind that minor children cannot directly inherit or be named beneficiaries. The result would be indirectly leaving the proceeds to your estranged spouse as their parent. It is wise to create a trust for the benefit of your minor children that is administrated by a neutral trustee that will provide payments to your children at an appropriate age and pattern of payment as you see fit.
By taking these precautionary measures, you can be sure that your estate is distributed to those you select and not to your estranged spouse by virtue of statutory or contractual obligations.
Contact Us to Get Professional Legal Assistance With Your Raleigh Estate Planning
We are happy discuss your estate planning options during divorce. Schedule your consultation today by calling (919) 301-8843 today or by filling out the contact form below.
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