Regardless of the specifics of your family situation estate planning is something to take seriously and be proactive about.  However, when you are a parent who is divorced and you intend to remarry you are probably going to want to engage in some rather advanced estate planning that requires additional expertise.

We live during an era when divorce is quite common.  Statistics on the subject vary, but somewhere in the vicinity of 40% to 50% of marriages are ending in divorce these days, and most of these people remarry.  In the majority of these cases children are involved and blended families are the result.

Premarital agreements have gotten a bad rap in some quarters, but they serve a very useful purpose.  One of the criticisms is that asking your respective new spouse to enter into an agreement dividing personal property going in is a sign of a lack of commitment.  This is rather one-sided thinking because you may in fact be motivated by the desire to protect the interests of your children more than anything else.

There is no guarantee that your spouse will make sure that your children are provided for in the manner that you see fit should you pass away first, and of course your marriage could end in divorce.  Premarital agreements are simply practical tools that protect all parties concerned.

Post-marital agreements can be useful in legacy planning as well.  Sometimes a married couple can disagree about the correct way to utilize or earmark community property.  These matters can be put to rest by simply entering into an agreement that divides the property between the two parties. Each person can then go forth and have the autonomy to create an independent legacy plan.

If you’re interested in the possibility of executing a marital agreement, simply take a moment to contact an estate planning attorney to arrange for an informative consultation.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Having a solid estate plan is important, no matter what your age or situation, but when someone divorces, it is extremely important.  Divorce is an ordeal, even under the best of circumstances, but it is important to remember that not only will a divorce cause problems within your family; it can also make a mess out of your estate.

When you divorce there are a number of details that you must pay attention to.  The first is dividing all of your assets according the agreement of your divorce.  Even when you have done this, you will still have many more details to attend to.  Your estate plan is probably the next most important.

You will need to ensure that you have changed your will, and updated your financial accounts, retirement accounts and insurance policies.  If you fail to do this, your family could end up with a disaster if something were to happen to you.  For example, if you forget to update your life insurance policy and your spouse is named as your beneficiary, that person will get the insurance settlement, even if you have remarried.  This is also true of your retirement accounts, annuities, and pay on death financial accounts.

In most cases a former spouse will automatically be excluded from your will, even if you forget to update it, this isn’t the case with your financial accounts and insurance policies.  All of these assets go directly to the beneficiary, without going through the probate process.

If you remarry, you will likely want these assets to go to your new spouse, or possibly your children.  To ensure that these assets go where you would want them to go, do not forget to updates these accounts once your divorce is final.

Another area of your estate plan that should be changed after you divorce is your Medical and Durable Power of Attorney documents. Unless you feel comfortable with your former spouse having Power of Attorney to represent you incase of illness or disability, you will want to make sure that you appoint a new Power of Attorney.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

Asset Protection Planning

Asset protection planning is an important part of your estate plan.  If you’re like most people, you have worked hard your entire life to earn and save your assets.  And, you would like to give a gift to your children during your lifetime or after your death.  Either way, ask your estate planning attorney how to incorporate asset protection planning into your estate planning so that your gift is not taken in a divorce.

More than half of us get divorced. It’s part of our way of life and therefore must be part of our asset protection planning and estate planning.  You can protect your gift to your child by giving the gift in a trust, instead of outright.  Picture a trust like a lock box.  Your child is the only one with the secret combination to the lock box.  She still has full access to the monies for her own benefit (and that of her children, if you’d like), but if she gets divorced… your gift cannot be taken in a divorce property settlement.

If you forgo asset protection planning and give the money to your child in her individual name, your gift may be taken from her and given to her ex-husband.  Instead of giving your gift in a lock box, it’s like just tossing a pile of cash at her in hopes that she’ll be able to catch it in the middle of a wind storm.

By including asset protection planning in your own estate planning, you can give a gift to your child that you cannot give to yourself.  If your child gets divorced or suffers bankruptcy, business failure, medical emergencies or is sued, your gift is protected and will be used only for your child’s benefit.

It is in your best interest and the best interests of your children to include asset protection in your estate plan.  Consult with an estate planning attorney to ask how.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.

A divorce, whether acrimonious or amicable, is an emotionally and, oftentimes, financially devastating life event.

A Separation Agreement or final Decree of Divorce stipulates division of assets, child custody, visitation and support and alimony payments. However, there are other things you need to do to prevent your ex-spouse creating further financial difficulties or receiving assets if you die.

If you have minor children, a Last Will and Testament or a Living Trust is essential. These legal documents permit you to appoint a Guardian to raise your children and a Trustee to distribute your estate. If you do not have a valid Will or Living Trust, your ex-spouse (or someone else you do not want) may receive custody of your children and acquire your assets.

A Health Care Power of Attorney may be another critical document. A Health Care Power of Attorney allows a person of your choosing to make decisions on your behalf should you become incapacitated and unable to form your own decisions.

Numerous other details, which may seem trivial, must be looked after; otherwise, the consequences may not be quite so minor. If you and your ex-spouse have joint bank or investment accounts, these must be put into your name only or he or she can withdraw money or automatically receive the proceeds should you die.

Life insurance policies, pension plans, 401k plans or any type of asset that has trustee and/or beneficiary designations need to be reviewed and your ex-spouse’s name replaced, if necessary. If you want your children to be beneficiaries, you can appoint a trustee to manage the assets until they reach the age of majority.

Be aware a Last Will and Testament is not legally binding on beneficiary designations and accounts with joint names. This means, you must change the beneficiary clauses and accounts to ensure your ex-spouse has no entitlement to these assets.

An ex-spouse can run up expenses on credit cards and utility accounts held in joint names and you are equally responsible for his or her debts. Cancel or delete his or her name from these accounts immediately to protect yourself.

If you need legal advice about estate planning after a divorce, please contact us. One of our knowledgeable estate planning attorneys will assist you.

Frank & Kraft, Attorneys at Law is a member of the American Academy of Estate Planning Attorneys.