Life changing events are good reason to ensure that your estate affairs are in order. These may include the addition of a child to your family, the purchase of a home, other changes in assets, or going through a divorce.
Whether going through a divorce or otherwise, it is a good idea to consider a Qualified Terminable Interest Trust (“QTIP”) to protect your property interests.
A QTIP Trust is a type of trust where a grantor, the person setting up the Trust, provides for the surviving spouse and controls how the trust assets are distributed when the surviving spouse dies.
A QTIP Trust can come in handy during a separation or pending divorce. By law, you cannot “write” your current spouse out of your Will. Even if you attempted to do so, your surviving spouse would have the ability to file an elective share claim on your estate after your death, or continue to pursue equitable division of the marital estate substituting your Estate as a party in the family court action. However, your surviving spouse cannot claim both an elective share and obtain an equitable division award.
Using a QTIP Trust in your Will, you can transfer the minimum share of your net probate estate to which your estranged spouse could be entitled under an elective share claim. Your spouse would receive any income derived from the principal of the Trust for his or her life. The corpus (or principal) of the Trust would never be distributed to your spouse outright. Instead, upon his or her passing, the Trust would terminate and whatever principal remains in the Trust would be distributed to your remaining beneficiaries named in your Will.
Of course, after your divorce is finalized (meaning once a Decree of Divorce has been issued) it is a good idea to execute a new Will removing your former spouse altogether.
