HOW IS ESTATE PLANNING AFFECTED BY DIVORCE?
HOW IS ESTATE PLANNING AFFECTED BY DIVORCE?
A divorce causes radical changes in a person’s life both personally and financially. In most cases, all beneficiary designations must be changed. For example, bank accounts, insurance policies, life insurance, retirement investments, and all other investments. If children are involved, the need to plan and care for them with love and compassion is of utmost importance. Many people falsely believe that a divorce cancels out all documents, estate plans, and beneficiary designations.
ESTATE PLANNING AFTER DIVORCE
Once a divorce is finalized, a new and improved estate plan must be created. The assets are usually divided in a divorce so once finalized, you can properly plan. At that point, you will know your current assets and can work on creating a new trust and transferring your assets into your updated trust with your current wishes.
WHO WILL GET CUSTODY OR GUARDIANSHIP OF MY CHILDREN AFTER I DIE?
If children are under 18 years of age and one parent passes away, the other parent usually gets full custody of the children. There are exceptions- a parent who has been proven unfit and lost custody may be prohibited from having that privilege. The other option is an appointed guardian in a will. This is a good idea even if there are two fit parents as an alternate is now named.
IF I REMARRY, HOW IS MY ESTATE PLAN AFFECTED?
Once divorced, and now remarrying, a new estate plan may need to be created. This is especially important in blended families where there are many children involved. A premarital agreement is a good planning tool before the marriage as it states your wishes and assets and holds them separately and states both parties wishes regarding death and divorce. Estate planning and pre-nuptual agreements and post-nuptual agreements go hand in hand. A cohabitation agreement is a useful tool for those individuals living together and not married.
HOW ARE MY TAXES AFFECTED?
In high net worth situations, a divorce may create a significant tax issue. Under current federal law, an individual can currently pass up to 5.49 million to heirs and pay no federal estate tax or gift tax. A married couple will be able to shield just shy of $11 million ($10.98 million) from federal estate taxes and gift taxes. The annual gift exclusion remains at $14,000.00 for 2017 per beneficiary. For example, as a result of divorce, a person with 7 million dollars will benefit from tax related estate planning that may have not been needed while they were married.
WHAT OTHER DOCUMENTS NEED TO BE REVIEWED AND UPDATED AFTER A DIVORCE?
The usual estate planning documents need to be reviewed; for example, all trusts, wills, power of attorney, and health care documents. Financial documents such as beneficiary designations for retirement accounts, bank accounts, annuities, and life insurance must be checked and changed, in most cases. Titles to property such as real estate, cars, investment properties, all should be changed in most cases.
WHY SHOULD I USE ALLY GLASER, PA FOR ESTATE PLANNING AFTER A DIVORCE?
As an Estate Planning, Probate, and Trust Attorney in Miami Beach, Florida, I have over twenty years of experience and handle these matters with the sensitivity they deserve. I have negotiated second marriage trust planning with ease, leaving the couple happy and protected both as a couple and individually. My psychology degree, law degree, and years of experience allow me to handle divorced clients and all clients with the care they deserve. Call or email me today to get started on your personalized estate plan.