There are compelling reasons for you to take time for estate and legacy planning prior to a divorce. Fundamental among these reasons are the welfare of minor children, protection and management of your assets, and your own care in the case of incapacity.
Estate and Legacy Planning for Your Minor Children
I’d like to start off by addressing one of the most valuable assets in your life which are your children. If the unthinkable were to happen to you or you become incapacitated before your children turn 18, your soon-to-be ex-spouse will most likely have custody of your minor kids.
Parenting is a fundamental right that cannot be stripped from a parent unless there is clear and convincing evidence he/she is a detriment to the children.
With that being said, it’s time to move forward and create your post-divorce will where you can name a guardian for your minor children. Even though this designation is not binding on the court, it will certainly inform the judge of your preference. Why is this important? It’s important if you have concerns about your soon-to-be ex raising the kids.
Naming a Guardian
This legal document will bring light before the judge in the guardianship case. By naming a guardian in your will, you have taken care of your children for the long term, but not in the short term. It is critical that post-divorce you create a kid’s protection plan that addresses the how, and by whom, you want your kids taken care of in case of an emergency and you’re not available.
You need to have a legal document in place naming temporary guardians such as your next-door neighbor, friends, family in close proximity until your long-term guardians become available. Furthermore, you’ll want to create either a will or a revocable living trust, so you can direct how you want your children’s inheritance (money) distributed throughout their lifetime by a trusted person (your chosen trustee).
Avoid This Mistake
A common mistake divorced parents make is to name their minor children as direct beneficiaries to their life insurance policy. Life insurance policies are beneficiary designated which means that the monies will bypass the probate process. However, even though bypassing the probate court is what you want, you now have another problem.
In the eyes of the law, minor children cannot take an inheritance till age 18 because they are deemed to lack capacity. Therefore, your family will end up in court having a judge appoint a professional guardian to manage their assets or maybe even your soon-to-be ex if the judge finds it is in your children’s best interest. Worse yet, when your children reach majority age 18, they will get full control of all the remaining assets/funds, which many times lead to purchases of an expensive sports car, lavish vacations, designer jewelry rather than college tuition.
Estate Planning for Your Incapacity
There are basic core documents that you need to have to plan for your incapacity. Your Advanced Health Care Surrogate, HIPAA, Living Will, and Power of Attorney. Your surrogate decision maker will stand in your shoes to make medical decisions in the event you cannot.
Generally, spouses or significant others name each other as their financial power of attorney and health care agent for that purpose. If you don’t want your present spouse to make medical decisions or control the course of any medical treatment if you become incapacitated, it’s important to create new powers of attorney and advance health care directive.
During these unprecedented times, these legal documents should also include legal language that addresses that YOU DO want to be intubated in the event you contract COVID-19.
Planning for Your Asset Distribution
During the divorce process, you may already have an existing will or revocable living trust. Or perhaps, you don’t have either. Again, no worries, you are not alone. You can create a temporary divorce will as a contingency for that “just in case” situation. However, after your divorce, a new will or revocable living trust is needed to distribute your assets according to your wishes.
You don’t have to wait until the final divorce to get started on a new plan because the assets you intend to take in equity will be retitled later accordingly. For example, a car or boat will require an issuance of a new title in your name.
What’s important to know is that all the changes you make after the divorce must be consistent with your divorce agreement which is called a marital settlement agreement. Think of this legal document as if it was your Bible that lays out the rules to follow.
Digital online assets such as email, social media, subscriptions, shopping, credit cards have evolved over time and should be addressed in your post-divorce estate planning. You will need to change usernames and passwords, and rescind any permissions granted to your soon-to-be ex-spouse.
There really is no cookie-cutter method here as you will need to figure out as you go, and in some cases, accounts will need to be closed. As an added layer of protection, it wouldn’t hurt to notify, in writing, online service providers that your ex is no longer authorized to access your accounts.
Another critical part of estate planning goes to updating your beneficiary designations. This includes life insurance, annuities, and retirements just to name a few. Here, you’d contact your institution to get the proper forms to complete and return. Always follow-up with a confirmation. Some other accounts that require updates is the beneficiaries on your bank account with Payable on Death and Transfer on Death designations.
Planning for Your Legacy
Legacy planning is different from the traditional estate plan that focuses on the tangible assets over your lifetime – your wealth. Planning for your legacy ensures that your intangible assets – your morals, values, spiritual, and philosophies—are passed down to future generations.
Many people believe that a legacy is created after you pass away, but the reality is that you create your legacy in the now, while you are still alive. What is it that you want to leave behind for your children, grandchildren, and great grandchildren?
We help our clients get started on this process by having them write letters, record videos, have conversations with their family, create moments that will create memories for a lifetime and so much more.
Without further delay, contact us at Vázquez Law, PLLC, 305.440.1888 or email firstname.lastname@example.org. As your Divorce Legacy Lawyer, we can support you in getting your estate and legacy planning documents updated and/or created.
This article is a service of Vázquez Law, PLLC. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That’s why we offer a PEACE Estate Planning Session, during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today at 305.440.1888 or visit our website: bvazquezlaw.com to get the process underway by scheduling a PEACE Estate Planning Session and mention this article to find out how to get this $750 session at no charge.
Disclaimer: I am not your lawyer unless you have paid me for legal advice and we have signed an agreement. I am a licensed attorney in the state of Florida. The information provided here is solely for educational purposes only, and not legal advice. You should absolutely consult with a lawyer before making any legal decision for yourself or your family. If you do want to work with a lawyer, I strongly recommend considering a lawyer who has the heart of a counselor, and specific training on how to get families talking about hard subjects, with great ease.