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Insurance and other estate assets may change after divorce

Nevada residents who have established estates to care for their loved ones after their own deaths may be interested to know that a subsequent divorce could have an impact on them. Although divorces commonly include property or marital settlement agreements, these documents could overlook critical later-life issues, like estate planning, in favor of things like dividing marital property or creating parenting agreements.

Marital settlement agreements can establish numerous obligations that divorcing spouses are subsequently held responsible for. Provided that each party adheres to the terms as written, for instance, an agreement might designate one of the ex-spouses as a trustee for a life insurance policy trust on behalf of the minor beneficiaries. Such an agreement should also answer questions such as how the trust is to be administered when the children reach the age of majority and what happens to the benefits if either the trustee or beneficiary dies before the other.

Including estate planning in one's divorce proceedings could also make it easier to avoid tax obligations or oversights. Settlement agreements may also impact existing estate plans by including their own independent provisions demanding the establishment of life insurance policies or other benefits.

Getting divorced may introduce new factors into an estate's eventual administration or maintenance, especially if one of the spouses remarries or has new children later. New beneficiaries could potentially contest existing terms and force probate litigation, or improper planning might simply fail to account for tax obligations and emergencies like health events. Because these documents may be harder to modify after their finalization, it could be beneficial to evaluate their estate planning implications with an attorney's assistance before signing them.

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