My new client comes in for assistance after their spouse has passed away. We thought it would be easy as everything seemed to be in order; all the assets were in their Trust. Pensions and Life Insurance can’t be in your Trust because they must be held by an individual (unless you do a specific Life Insurance Trust to purchase the insurance).
We contacted the Pension plan and life insurance agency. We were asked to show the divorce decree from the first marriage and the marriage certificate. I hired a service to go to the court to get the divorce decree and we discovered the divorce had never been finalized. Guess what… We had a marriage certificate. I suspect that the deceased spouse believed that since they had filed for divorce and paid child support for many years that they were divorced. Nope, you have to take legal steps after filing to complete the divorce.
My client now has a mess to clean up and most likely won’t get the Pension and Life Insurance benefit. If you have a second (or third) marriage, you need to make sure that you have taken all the legal steps to get your ex off your pension and life insurance plan. Estate Planning when spouses have been divorced is never simple. Blended families are never simple.
