Couples navigating divorce in North Carolina must comply with a one year physical separation requirement before filing for a divorce decree. During this time the couple is still married, but living apart. Those who are contemplating divorce should review the terms of their wills and beneficiary designations with an estate planning attorney to determine whether it is prudent to amend any terms providing for the soon-to-be-ex-spouse. What if joint accounts are still held in both spouses’ names? Do Transfer-on-Death (TOD) forms name a soon-to-be-ex-spouse? Pre-divorce estate planning helps to identify these concerns so that necessary steps can be taken to protect the inheritance one plans to leave to loved ones. This is also a prime time to review a prenuptial agreement, if present, so that asset distribution occurs according to the agreement’s terms.
A prenuptial agreement is an important item to discuss when planning to remarry. Although people of any age may fall victim to a financial scam during their lifetimes, the number of marriage scams targeting elderly victims has grown in recent years. A marriage scam could rob family of the inheritance an individual intends to leave them. Prenuptial agreements help to safeguard the respective assets of each spouse and provide a detailed plan for how pre-marital assets and assets acquired during marriage would be managed and divided in the event of divorce.
In the event of a spouse’s death, North Carolina elective share law provides that a portion of the deceased spouse’s estate may be provided to the surviving spouse if what was bequeathed to the surviving spouse did not meet the statutory minimum. A spouse’s right to an elective share may be waived before or during marriage in North Carolina in certain circumstances. Legislative changes in 2013 revised the statute to make length of the marriage the sole determining factor in calculating the share to which a surviving spouse is entitled, with the largest share capped at 50 percent if the marriage lasted 15 years or more. Click here for elective share rates. To ensure non-spouses are provided for, an individual may choose to establish an irrevocable trust for the benefit of intended non-spousal heirs, although such trusts must be established at least one year prior to death to exempt the assets from inclusion for elective share purposes.
New marriages should also trigger discussions about providing inheritances for stepchildren or adopted children. Beneficiary designations on retirement accounts and life insurance policies, Payable-on-Death (POD) forms, and other documents should be updated regularly to ensure new or former family members are named as desired.