Divorce is one of the biggest life events most people ever experience. And when you’re dealing with families, money, and wealth, divorce almost always intersects with estate planning.
In this episode of Divorce Well in Florida, we spoke with David Lappin, a Florida and New York trust-and-estates attorney with an LL.M. in Taxation from Georgetown, about how divorce impacts:
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wills and trusts
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health care directives and powers of attorney
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beneficiary designations
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asset protection
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high-net-worth settlement planning
This guide explains what to update immediately, when to bring an estate planning lawyer into the divorce process, and how trusts can be used to reduce conflict and protect long-term wealth.
Why Estate Planning Should Be on Your Divorce Checklist
If you have any existing estate planning documents, you should assume divorce will create problems unless they’re reviewed.
Even if you don’t have a high net worth, estate planning matters during divorce because:
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your spouse may still be listed as trustee, agent, or surrogate
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your documents may name backups that no longer make sense
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your children’s guardianship and inheritance structure may need attention
Put simply: divorce changes who you trust, and your documents should reflect that.
Do You Have to Change Your Will and Trust After Divorce?
In Florida, many designations in favor of a spouse are revoked upon divorce by operation of law.
That includes:
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inheritance provisions
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trustee appointments
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successor trustee designations
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health care surrogate and agent roles
What That Means in Real Life
A standard plan might say:
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everything goes to the surviving spouse
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if spouse is not living, it goes to the children in trust
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spouse is also successor trustee
After divorce, the spouse may be treated as having predeceased. That sounds protective, but it can create unintended consequences — especially when:
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you still want your ex to serve as trustee (common in amicable divorces with young kids)
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your backup successor is outdated (e.g., a parent who is now deceased)
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you never put thought into the “after spouse” decision-makers
Bottom line: even though Florida revocation rules exist, you still need a customized review.
The Most Overlooked Divorce Planning Issue: Health Care and Incapacity Documents
One of the most important estate planning steps after divorce is often not the will — it’s:
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health care surrogate designation
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living will / advanced directive
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durable power of attorney
During marriage, people frequently default to naming their spouse. After a divorce, those appointments can be revoked, or worse: they can be unclear, outdated, or left blank. This matters because:
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Hospitals and doctors need clear direction
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Someone must be able to pay bills if you’re incapacitated
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You want the right people contacted in an emergency
Even if you do nothing else, updating incapacity documents is a smart move.
When Should You Bring an Estate Planning Lawyer Into the Divorce Itself?
For many divorces, estate planning involvement is limited to “update your documents afterward.” But in high-net-worth divorces and second marriages, estate planning becomes part of the settlement strategy.
Scenarios Where It Often Matters
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one spouse owns a business worth $10–$20M+ with liquidity expected later
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spouses want to ensure children receive specific assets long-term
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parents want to divide assets now but “lock in” wealth transfer to children
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one spouse is entitled to support or a business interest and the parties want a clean, tax-aware structure
Divorce attorneys can structure equitable distribution — but we do not do mutual estate planning inside a marital settlement agreement. This is where a trust-and-estates attorney can add massive value.
Prenups: A Divorce Tool That’s Also an Estate Planning Tool
Prenups are often viewed as “divorce contracts,” but they also matter at death. David emphasized a major point: A Spouse May Have Automatic Rights at Death Without Planning
In Florida, a surviving spouse may have significant statutory protections and elective share rights. In second marriage situations, that can create tension when:
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One spouse wants assets to pass to children from a prior marriage
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There are existing obligations from a prior divorce
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There is significant premarital wealth
A prenup can provide:
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clarity on what passes to a spouse vs. children
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flexibility for estate planning
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protection of family wealth and legacy goals
David’s approach: prenups often work best when estate planning counsel and divorce counsel co-counsel, combining:
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divorce/equitable distribution strategy
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testamentary and tax planning strategy
“Can I Avoid a Prenup by Putting Everything in a Trust?”
This question comes up constantly online. The short answer: usually no. People often assume they can:
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create a trust during marriage
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move assets into it
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“hide” assets from divorce
Divorce courts generally look through that.
A More Advanced Option: Domestic Asset Protection Trusts
David discussed an alternative strategy that may exist under certain state laws, such as Nevada or Delaware:
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Self-settled irrevocable trusts
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Potential protection from certain creditor claims
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In Nevada, certain marital claims may be limited
But this is not a simple hack, and it’s not something most people should treat as their primary protection. For most people, the best solution remains:
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Do the prenup
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Keep it narrow and well-drafted
Trusts in Divorce Settlements: A Powerful Way to Simplify and Reduce Future Litigation
One of the most valuable uses of trusts is not avoiding divorce — it’s making settlement clean, enforceable, and future-proof.
Why This Matters
Many marital settlement agreements contain complex formulas around:
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future business sale events
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cash-out provisions
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earnouts or deferred payments
Often, the only people who understand those provisions are the lawyers who drafted them. That complexity invites:
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disputes
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motions to enforce
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post-divorce litigation
A trust structure can reduce that risk by setting:
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clear payment rights
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clean distribution rules
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automatic transitions after death
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defined beneficiaries
Can a Trust Replace Alimony?
Yes — in the right case. Because alimony is no longer deductible for the payer under federal law (post-TCJA), parties sometimes explore alternatives. David noted options like:
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funding a trust for the recipient spouse
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purchasing an annuity
Example concept: Instead of paying $2,000/month for 10 years, the payer might fund a trust/annuity with a lump sum that produces income
Potential benefits:
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stable payments for the recipient
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potential growth of principal
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potential tax shifting depending on structure
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certainty and finality for the payer
In higher-asset cases, funding a trust can also “lock in” that remaining funds pass to the children after the recipient’s death — helpful in second marriage scenarios.
Business Ownership: Is There a Way for One Spouse to Run the Company While the Other Gets Value?
Yes, and it does not always require a forced buyout. David discussed two broad examples:
Option 1: Recapitalize Shares
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Class A: voting shares (operator spouse)
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Class B: non-voting shares (non-operator spouse)
The operating spouse runs the business. The non-operating spouse receives economic participation.
Option 2: Put an Interest Into a Trust
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operator spouse retains control interest
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non-operator spouse and/or children become trust beneficiaries
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distributions and sale proceeds can be defined cleanly
These approaches can reduce disruption to the business while still producing fair economic outcomes.
Can You Put Your Home in a Trust Without Triggering the Mortgage “Due on Sale” Clause?
Many mortgages have “due on sale” clauses. David noted that federal law generally prevents banks from enforcing those clauses when:
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A primary residence is transferred to a revocable trust
Important clarification:
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A revocable trust typically provides no additional asset protection
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True trust asset protection generally comes from properly structured irrevocable trusts
For other transfers (like rental properties into LLCs), banks may still care — and it’s wise to coordinate with the lender.
The Bigger Message: Divorce Doesn’t End Your Financial Life
A powerful closing point from David: “Many wealthy clients have been divorced.”
Divorce can reduce net worth temporarily — sometimes substantially — but:
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If you built it once, you can build it again
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Smart planning reduces repeated legal battles
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The right team protects long-term wealth