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What happens to Debt when you die

What Happens to Debt when You Die?

What Happens to Debt when You Die?

When a person dies, it’s not unusual for them to leave behind some unpaid debt. What happens to that debt depends upon how their estate was organized, says the article “This is how your unpaid debts are handled if you pass away” from CNBC.com. The estate consists of whatever is owned, whether the person was wealthy or not. It includes financial accounts, real estate and personal possessions.

For surviving spouses, this can be worrisome. In most instances, they are not responsible for their spouse’s debt, but there are some exceptions. Here’s how it works.

Paying off all debts and then distributing the remaining assets is part of the probate process. Every state has its own laws regarding how long creditors have to make a claim against the estate. In some states, it’s a few months, in others it can last a few years. An estate planning attorney in your state will know how long the estate is vulnerable to creditors.

In most states, funeral expenses take priority, then the cost of administering the estate, followed by taxes and hospital and medical bills. However, not all assets are necessarily part of the estate, and this is where estate planning is important.

Life insurance policies, qualified retirement accounts and other assets with named beneficiaries go directly to the beneficiaries and do not pass through probate. The same goes for assets placed in trusts, as does jointly owned property, as long as it has been properly titled.

With the right planning, it is possible that an entire estate, including one that is insolvent, could be passed on to heirs outside of probate, leaving creditors high and dry. However, there are a handful of states that have “community property laws” that make debt more complicated.

The law in these states views both assets and certain debt accumulated during the marriage as being owned by both spouses, even if it is only in the decedent’s name. That includes debt like medical expenses or a mortgage. However, that’s not the final word. A well-structured letter with a copy of the death certificate can sometimes lead to the debt being discharged. During the probate process, the company holding the debt should be advised that the estate has little or no assets to cover the debt and ask that it be forgiven.

This does not apply to co-signing on a loan. Although the request can be made, it is not likely to be honored. Federal student loans are forgiven if the student dies, which seems a matter of kindness. Parent PLUS loans, which are loans taken out by parents to help pay for education, are usually discharged, if the student or parent dies.

Your estate planning attorney can help structure your estate to protect your surviving spouse and family members from creditors.

Reference: CNBC.com (July 31, 2020) “This is how your unpaid debts are handled if you pass away”

Read more related articles at:

What Happens to Credit Card Debt When You Die?

Who Is Responsible for Your Debt After Your Death?

Also, read one of our previous blogs at:

Does My Mom Have to Pay My Dad’s Credit Card Debt after He Dies?

Click here to check out our Master Class!

Trusts

Different Trusts for Different Estate Planning Purposes

Different Trusts for Different Estate Planning Purposes

There are a few things all trusts have in common, explains the article “All trusts are not alike,” from the Times Herald-Record. They all have a “grantor,” the person who creates the trust, a “trustee,” the person who is in charge of the trust, and “beneficiaries,” the people who receive trust income or assets. After that, they are all different. Here’s an overview of the different types of trusts and how they are used in estate planning.

“Revocable Living Trust” is a trust created while the grantor is still alive, when assets are transferred into the trust. The trustee transfers assets to beneficiaries, when the grantor dies. The trustee does not have to be appointed by the court, so there’s no need for the assets in the trust to go through probate. Living trusts are used to save time and money, when settling estates and to avoid will contests.

A “Medicaid Asset Protection Trust” (MAPT) is an irrevocable trust created during the lifetime of the grantor. It is used to shield assets from the grantor’s nursing home costs but is only effective five years after assets have been placed in the trust. The assets are also shielded from home care costs after assets are in the trust for two and a half years. Assets in the MAPT trust do not go through probate.

The Supplemental or Special Needs Trust (SNT) is used to hold assets for a disabled person who receives means-tested government benefits, like Supplemental Security Income and Medicaid. The trustee is permitted to use the trust assets to benefit the individual but may not give trust assets directly to the individual. The SNT lets the beneficiary have access to assets, without jeopardizing their government benefits.

An “Inheritance Trust” is created by the grantor for a beneficiary and leaves the inheritance in trust for the beneficiary on the death of the trust’s creator. Assets do not go directly to the beneficiary. If the beneficiary dies, the remaining assets in the trust go to the beneficiary’s children, and not to the spouse. This is a means of keeping assets in the bloodline and protected from the beneficiary’s divorces, creditors and lawsuits.

An “Irrevocable Life Insurance Trust” (ILIT) owns life insurance to pay for the grantor’s estate taxes and keeps the value of the life insurance policy out of the grantor’s estate, minimizing estate taxes. As of this writing, the federal estate tax exemption is $11.58 million per person.

A “Pet Trust” holds assets to be used to care for the grantor’s surviving pets. There is a trustee who is charge of the assets, and usually a caretaker is tasked to care for the pets. There are instances where the same person serves as the trustee and the caretaker. When the pets die, remaining trust assets go to named contingent beneficiaries.

A “Testamentary Trust” is created by a will, and assets held in a Testamentary Trust do not avoid probate and do not help to minimize estate taxes.

An estate planning attorney in your area will know which of these trusts will best benefit your situation.

Reference: Times Herald-Record (August 1,2020) “All trusts are not alike”

Read more related articles at:

A Guide to the Different Types of Trusts

What Is a Trust? A Guide to Different Types And Their Uses

Also, read one of our previous Blogs at:

10 Reasons Why You Need A Trust

 

Estate Planning is for Everyone

Why Everyone Needs an Estate Plan

Why Everyone Needs an Estate Plan

Financial planners know that most people need to have estate plans, no matter how much or even how little money they have, as explained in this recent article “I’m a financial planner, and there are 3 reasons everyone needs an estate plan no matter how much money you have” from Business Insider. An estate plan includes healthcare directives and identifies guardians for minor children in the event you and your spouse die unexpectedly. It also can be created to avoid your family from having to go through probate court.

Skipping this part of your overall financial and legal life could put you, your assets and your family members at risk. Estate planning is done to protect you and your loved ones. That’s just one reason why everyone needs one. Having an estate plan protects you while you are living.

An estate plan is more than just a will or a trust. The two most common tools in an estate plan are a will and trust, but that’s just the beginning. A will, or last will and testament, is the document that provides the instructions for your heirs and beneficiaries to follow after you die. Trusts are used to protect assets and enforce your wishes, after you’re gone. However, a good estate plan should also include these documents:

  • An advance healthcare directive or healthcare proxy. These documents stipulate how you want to be treated, if you are alive but so sick or injured that you can’t provide directions. You may want to have a Do Not Resuscitate Order (DNR).
  • Powers of attorney. This legal document outlines who can represent you in legal, medical or financial matters, if you are not able to do so.

The right documents help avoid probate court. If you don’t have a will, any property or possessions must go through the probate system. Your documents and information about your assets become part of the public record and can be seen by anyone. Going through probate opens the door to litigation and disputes, which can further delay settling your estate. Having a will and the proper trusts gives clarity to heirs about what you want.

An estate plan protects your children. If you don’t have a will, a court names the guardian who will raise your children. Instead, decide who you would want. Make sure the person you want to care for your children will accept this responsibility. Trusts are a way to preserve assets for your children. The trust is managed by a trustee after you die and can stipulate specific rules and uses for the assets. For instance, you can provide a certain amount of money for the children, until they reach age 18. At that point, your trust could instruct the trustee to use the money for college expenses. You can be as specific as you wish.

Meet with an estate planning attorney familiar with the laws of your state. An estate planning attorney will know the estate and tax laws that apply to you and your family.

Reference: Business Insider (June 12, 2020) “I’m a financial planner, and there are 3 reasons everyone needs an estate plan no matter how much money you have”

Read more related articles at:

Leaving a legacy: Why everyone needs an estate plan

Why Everyone Needs an Estate Plan

Also, read one of our previous Blogs at:

Estate Planning Is a Gift and a Legacy for Loved Ones

Click here to check out our Master Class!

Pandemic and Social Security

Will the Pandemic Affect My Social Security?

Will the Pandemic Affect My Social Security?

Kiplinger’s recent article entitled “Social Security Shocker: Pandemic to Reduce Benefits by 9% for Americans Turning 60 in 2020” explains that retirees can mitigate some of the damage, by waiting to claim their benefits. For every year you delay benefits past your full retirement age until age 70, you’ll receive an increased benefit of about 8%.

Eligibility for Social Security benefits requires a senior to have earned no less than 40 “credits.” You can earn up to four credits a year, so it takes 10 years of work to qualify for Social Security benefits. In 2020, you have to earn $1,410 to get one Social Security work credit and $5,640 to get the maximum four credits for the year.

Your benefit is based on the 35 years in which you earned the most amount of money. If you have fewer than 35 years of earnings, each year with no earnings is calculated as a zero. You can increase your benefit by swapping out those zero years, by working longer, even if it’s only part-time. However, don’t worry about a low-earning year replacing a higher-earning year. It won’t happen. The benefit isn’t based on 35 consecutive years of work, it’s based on your highest-earning 35 years. As a result, if you decide to ease into retirement by working part-time, you won’t wreck the amount of your Social Security benefit at all, if you have 35 years of higher earnings. If you earn more money, however, your benefit will be adjusted upward—despite the fact that you’re still working while taking your benefit.

There is a maximum benefit amount you can get. However, it depends on your age when you retire. If you retire at full retirement age this year, the maximum monthly benefit is $3,790.

In the past, a great perk of Social Security benefits was that every year, the government would adjust the benefit for inflation. This is called a cost-of-living adjustment, or “COLA.” It’s an inflation protection to help seniors keep up with rising living expenses during retirement.

The COLA is automatic and is quite valuable because purchasing inflation protection on a private annuity can be expensive.

The COLA is calculated based on changes in a federal consumer price index (CPI). The amount of the COLA depends largely on broad inflation levels determined by the federal government.

For 2021, Kiplinger anticipates that there won’t be a Social Security cost of living adjustment. That is due to the COVID-19 pandemic.

Reference: Kiplinger (July 30, 2020) “Social Security Shocker: Pandemic to Reduce Benefits by 9% for Americans Turning 60 in 2020”

Read more related articles here:

How Will the Coronavirus Pandemic Affect Social Security?

Pandemic Could Impact Social Security Finances, COLAs

Also, read one of our previous Blogs at:

Would an Early Retirement and Early Social Security Be Smart?

Click here to check out our Master Class!

Celebrity Estate Planning Mistakes

Which Stars Made the Biggest Estate Planning Blunders?

Which Stars Made the Biggest Estate Planning Blunders?

Mistakes in the estate planning of high-profile celebrities are one very good way to learn the lessons of what not to do.

Forbes’ recent article entitled “Eight Lessons From Celebrity Estates” discussed some late celebrities who made some serious experienced estate planning blunders. Hopefully, we can learn from their errors.

James Gandolfini. The “Sopranos” actor left just 20% of his estate to his wife. If he’d left more of his estate to her, the estate tax on that gift would have been avoided in his estate. But the result of not maximizing the tax savings in his estate was that 55% of his total estate went to pay estate taxes.

James Brown. One of the hardest working men in show business left the copyrights to his music to an educational foundation, his tangible assets to his children and $2 million to educate his grandchildren. Because of ambiguous language in his estate planning documents, his girlfriend and her children sued and, years later and after the payment of millions in estate taxes, his estate was finally settled.

Michael Jackson.  Jackson created a trust but never funded the trust during his lifetime. This has led to a long and costly battle in the California Probate Court over control of his estate.

Howard Hughes. Although he wanted to give his $2.5 billion fortune to medical research, there was no valid written will found at his death. His fortune was instead divided among 22 cousins. The Hughes Aircraft Co. was bequeathed to the Hughes Medical Institute before his death and wasn’t included in his estate.

Michael Crichton. The author was survived by his pregnant second wife, so his son was born after his death. However, because his will and trust didn’t address a child being born after his death, his daughter from a previous marriage tried to cut out the baby boy from his estate.

Doris Duke. The heir to a tobacco fortune left her $1.2 billion fortune to her foundation at her death. Her butler was designated as the one in charge of the foundation. This led to a number of lawsuits claiming mismanagement over the next four years, and millions in legal fees.

Casey Kasem. The famous DJ’s wife and the children of his prior marriage fought over his end-of-life care and even the disposition of his body. It was an embarrassing scene that included the kidnapping and theft of his corpse.

Prince and Aretha Franklin. Both music legends died without a will or intestate. This has led to a very public, and in the case of Prince, a very contentious and protracted settlement of their estates.

So, what did we learn? Even the most famous (and the richest) people fail to carefully plan and draft a complete estate plan. They make mistakes with tax savings (Gandolfini), charities (Brown and Hughes), providing for family (Crichton), whom to name as the manager of the estate (Duke) and failing to prevent family disputes, especially in mixed marriages (Kasem).

If you have an estate plan, be sure to review your existing documents to make certain that they still accomplish your wishes. Get the help of an experienced estate planning attorney.

Reference: Forbes (July 16, 2020) “Eight Lessons From Celebrity Estates”

Read more related articles at:

The Biggest Estate Planning Blunders of All Time

6 Estate-Planning Mistakes Celebrities Made

Also, Read one of our previous Blogs at:

Celebrity Estates: Battle Over Inheritances

Click here to check out our Master Class!

Multi generational household

Combining Households during Coronavirus

Combining Households during Coronavirus

Not that long ago, multigenerational living was how most people lived.  Since people are living longer, it may become the norm again. In times of crisis like these, says the article “Moving ahead during coronavirus,” from The Mercury, many parents and adult children are combining family units to care for each other.

Parents might move in with their son or daughter’s family. The adult children and their spouse and children may also come to live with Mom and Dad. It is not just about parents and children, since siblings also decide it’s better for everyone to live closer.

If family members are considering combining households, they need to create a plan for important issues. Who will pay for what, what is the back up if the arrangement does not work and what boundaries will be set, so that the children and their parents have a sense of privacy?

Conversations about how this arrangement relates to the parent’s overall estate plan also need to take place. Will parents fund the entire household, if one or more adult children are not working? Will there be expectations of eventual re-payment? How does the household pay its bills and who will be responsible for what chores?

An important question to address, is the issue of a parent’s gifting assets to the adult child. If the long-term plan is for the parent to apply for Medicaid, it will be important to plan any asset transfers to avoid having the parent become ineligible for long-term care coverage.

It’s easy for this kind of joint living arrangement to be derailed by misunderstandings and expectations that are not discussed. Writing out a document with the help of an estate planning attorney can make the discussion more concrete and ensure that the agreement will complement and not conflict with the estate plan. Every situation is different, and what works for one family may not work for another. Having an outside professional involved can reduce the emotional aspect and clear the way for a happy arrangement that works for everyone.

Reference: The Mercury (July 28, 2020) “Moving ahead during coronavirus”

Read more related articles at:

Guidance for Large or Extended Families Living in the Same Household

How Multigenerational Families Manage ‘Social Distancing’ Under One Roof

Also Read one of our previous Blogs at:

What Do I Need to Know Before I have Mom Move in with My Family?

Click here to check out our Master Class!

secure act

Do I Qualify as an Eligible Designated Beneficiary under the SECURE Act?

Do I Qualify as an Eligible Designated Beneficiary under the SECURE Act?

An eligible designated beneficiary (EDB) is a person included in a unique classification of retirement account beneficiaries. A person may be classified as an EDB, if they are classified as fitting into one of five categories of individuals identified in the Setting Every Community Up for Retirement Enhancement (SECURE) Act. The bill passed in December 2019 and is effective for all inherited retirement accounts, as of the first of this year.

Investopedia’s recent article entitled “Eligible Designated Beneficiary” explains that these people get special treatment and greater flexibility to withdraw funds from their inherited accounts than other beneficiaries.

With the SECURE Act, there are now three types of beneficiaries. It is based on the individual’s connection to the original account owner, the beneficiary’s age, and his or her status as either an individual or a non-person entity. However, an EDB is always an individual. On the other hand, an EDB can’t be a trust, an estate, or a charity, which are considered not designated beneficiaries. There are five categories of individuals included in the EDB classification. These are detailed below.

In most instances, except for the exceptions below, an EDB must withdraw the balance from the inherited IRA account over the beneficiary’s life expectancy. There is optional special treatment allowed only for surviving spouses, which is explained below. When a minor child reaches the age of majority, he or she is no longer considered to be an EDB, and the 10-year rule concerning withdrawal requirements for a designated beneficiary applies.

Here are the five categories of EDBs.

Owner’s surviving spouse. Surviving spouses get special treatment, which lets them step into the shoes of the owner and withdraw the balance from the IRA over the original owner’s life expectancy. As another option, they can roll an inherited IRA into their own IRA and take withdrawals at the point when they’d normally take their own required minimum distributions (RMDs).

Owner’s minor child. A child who isn’t yet 18 can make withdrawals from an inherited retirement account using their own life expectancy. However, when he or she turns 18, the 10-year rule for designated beneficiaries (who aren’t EDBs) applies. At that point, the child would have until December 31 of the 10th year after their 18th birthday to withdraw all funds from the inherited retirement account. A deceased retirement account owner’s minor child can get an extension, up until age 26, for the start of the 10-year rule, if he or she is pursuing a specified course of education.

An individual who is disabled. The tax code says that an individual is considered to be disabled if he or she is “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long continued and indefinite duration.” A disabled person who inherits a retirement account can use their own life expectancy to calculate RMDs.

An individual who is chronically ill. The tax code states that “the term ‘chronically ill individual’ means any individual who has been certified by a licensed healthcare practitioner as—

  • being unable to perform (without substantial assistance from another individual) at least two activities of daily living for a period of at least 90 days, due to a loss of functional capacity,
  • having a level of disability similar (as determined under regulations prescribed by the Secretary in consultation with the Secretary of Health and Human Services) to the level of disability described in clause (i), or
  • requiring substantial supervision to protect such individual from threats to health and safety due to severe cognitive impairment.”

A chronically ill individual who inherits a retirement account can use their own life expectancy to determine the RMDs.

Any other person who’s less than 10 years younger than the decedent. This is a catch-all that includes certain friends and siblings (depending on age), who are identified as beneficiaries of a retirement account. This also excludes most adult children (who aren’t disabled or chronically ill) from the five categories of EDBs. A person in this category who inherits a retirement account is permitted to use their own life expectancy to calculate RMDs.

Reference: Investopedia (June 25, 2020) “Eligible Designated Beneficiary”

Read more related articles at:

Review of Retirement Account Beneficiary Designations under the SECURE Act

The SECURE Act Top Ten

Also, read one of our previous blogs at :

How Does the SECURE Act Change Your Estate Plan?

Click here to check out our Master Class!

 

Disinherit

Can I Disinherit Anyone I Want?

Can I Disinherit Anyone I Want?

If there’s someone you believe is more deserving or needs more of your help, that may mean someone else in your life may receive little or nothing from you when you die. However, be careful—disinheriting an heir is not as simple as leaving them out of your will, explains the article “How to Disinherit an Heir” from smart asset.

Disinheriting an heir means you’ve prevented them from receiving a portion of your estate, when you die. A local estate planning lawyer will know what your state requires, and every state’s laws are different.

One way is by leaving the person out completely. However, this could also leave your will up for interpretation, as there may be questions raised about your intent. A challenge could be raised that you didn’t mean to leave them out—and that could create stress, expenses and family fights.

You may also disinherit a person, by stating in your will that you do not wish to leave anything to this specific person. You might even provide information about why you are doing this, so your intent is clear. There could still be challenges, even with your providing reasons for cutting the person out of your will.

Disinheriting someone can be a tricky thing to do. It requires professional help. Working with an experienced estate planning attorney who has experience in will contests, may be your best choice for an estate planning attorney.

There are instances where relatives known and unknown to you are entitled to make a claim on your estate. An experienced estate planning attorney may suggest a search for relatives to ensure that no surprises come out of the woodwork, after your passing.

There are some relatives who cannot be disinherited, even in a legally binding last will and testament. In many states, you may not disinherit your spouse or children. Most states protect spouses from being disinherited, and in some states, children are legally entitled to a certain amount of your property. However, in most states, you may disinherit parents, if they outlive you.

There are many reasons you may want to disinherit someone. You may have been estranged from a child or a cousin for many years, or you may believe they have enough financial resources and want someone else to receive an inheritance from you.

Many high-profile individuals have declared that their children will not receive an inheritance, preferring to give their assets to charitable foundations or organizations working for causes they support.

Whatever your reasons for disinheriting someone, make sure you go about it with professional help to ensure that your wishes are followed after you die.

Reference: smart asset (June 1, 2020) “How to Disinherit an Heir”

Read related articles at:

How To Disinherit A Family Member

Four Ways to Disinherit Family Members

Also, read one of our previous Blogs at :

How Can You Disinherit Someone and Be Sure it Sticks?

Click here to check out our Master Class!

Asset Protection

How Can I Protect Assets from Creditors?

How Can I Protect Assets from Creditors?

Forbes’ recent article entitled “Three Estate Planning Techniques That Protect Your Assets From Creditors” explains that the key to knowing if your assets might be susceptible to attachment in litigation is the fraudulent conveyance laws. These laws make a transfer void, if there’s explicit or constructive fraud during the transfer. Explicit fraud is when you know that it is likely an existing creditor will try to attach your assets. Constructive fraud is when you transfer an asset, without receiving reasonably equivalent consideration. Since these laws void the transfer, a future creditor can attach your assets.

Getting reasonably equivalent consideration for a transfer of assets will eliminate the transfer being treated as constructive fraud. Reasonably equivalent consideration includes:

  • Funding a protective trust at death to provide for your spouse or children
  • Asset transfer in return for interest in an LLC or LLP; or
  • A transfer that exchanges for an annuity (or other interest) that protects the principal from claims of creditors.

Limited Liability Companies (LLCs) can be an asset protection entity, because when assets are transferred into the LLC, your creditors have limited rights to get their hands on them. Like a corporation, your interest in the LLC can be attached. However, you can place restrictions on the sale or transfer of interests that can decrease its value and define the term by which sale proceeds must be paid out. An LLC must be treated as a business for the courts to treat them as a business. Thus, if you use the LLC as if it were your personal property, courts will disregard the LLC and treat it as personal property.

Annuities are created when you exchange assets for the right to get payment over time. Unlike annuities sold by insurance companies, these annuities are private. These annuities are similar to insurance company annuities, in that they have some income tax consequences, but protect the principal against attachment.

You can also ask an experienced estate planning attorney about trusts that use annuities, which are called split interest trusts. There is a trust where you (the Grantor) give assets but keep the right to receive payments, which can be a fixed amount annually with a Grantor Retained Annuity Trust (or GRAT.)

Another trust allows you to get a variable amount, based on the value of the assets in the trust each year. This is a Grantor Retained Uni-Trust or GRUT. If the assets are vacant land or other tangible property, or being gifted to someone who’s not your sibling, parent, child, or other descendant, you can keep the income from the assets by using a Grantor Retained Income Trust (or GRIT).

Along with a trust where you make a gift to an individual, you can protect the trust assets and get a charitable deduction, if you make a gift to charity through trusts. There are two types of trust for this purpose: a Charitable Remainder Trust (CRT) lets you keep an annuity or a variable payment annually, with the remainder of the trust assets going to charity at the end of the term; and a Charitable Lead Trust (CLT) where you give a fixed of variable annuity to charity for a term and the remainder either back to you or to others.

To get the most from your asset protection, work with an experienced estate planning attorney

Reference: Forbes (June 25, 2020) “Three Estate Planning Techniques That Protect Your Assets From Creditors”

Read more related articles at :

Ten Rules For Asset Protection Planning

4 Ways Wealthy Families Protect Their Assets From Lawsuits

Also, read one of our previous Blogs at :

Common Asset Protection Mistakes in Titling Real Property

Click here to check out our Master Class!

Estate Planning after divorce

What Does My Estate Plan Look Like after Divorce?

What Does My Estate Plan Look Like after Divorce?

Planning an estate after a divorce involves adopting a different type of arithmetic. Without a spouse to anchor an estate plan, the executors, trustees, guardians or agents under a power of attorney and health care proxies will have to be chosen from a more diverse pool of those that are connected to you.

Wealth Advisor’s recent article entitled “How to Revise Your Estate Plan After Divorce” explains that beneficiary forms tied to an IRA, 401(k), 403(b) and life insurance will need to be updated to show the dissolution of the marriage.

There are usually estate planning terms that are included in agreements created during the separation and divorce. These may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. For example, in New York, bequests to an ex-spouse in a will prepared during the marriage are voided after the divorce. Even though the old will is still valid, a new will has the benefit of realigning the estate assets with the intended recipients.

However, any trust created while married is treated differently. Revocable trusts can be revoked, and the assets held by those trusts can be part of the divorce. Irrevocable trusts involving marital property are less likely to be dissolved, and after the death of the grantor, distributions may be made to an ex-spouse as directed by the trust.

A big task in the post-divorce estate planning process is changing beneficiaries. Ask for a change of beneficiary forms for all retirement accounts. Without a stipulation in the divorce decree ending their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy may still receive the proceeds at your death.

Divorce makes children assume responsibility at an earlier age. Adult children in their 20s or early 30s typically assume the place of the ex-spouse as fiduciaries and health care proxies, as well as agents under powers of attorney, executors and trustees.

If the divorcing parents have minor children, they must choose a guardian in their wills to care for the children, in the event that both parents pass away.

Ask an experienced estate planning attorney to help you with the issues that are involved in estate planning after a divorce.

Reference: Wealth Advisor (July 7, 2020) “How to Revise Your Estate Plan After Divorce”

Read related articles at:

9 Things You Need To Know About Estate Planning After Divorce

Estate Planning Documents to Update When Getting a Divorce

Also read one of our previous Blogs at:

Should I Change Beneficiary Designations if I Get a Divorce?

Click here to check out our Master Class!

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