Hi there Bridget Mackay of the Law Offices of Bridget Mackay. This is my video blog. I practice estate planning and elder law here in Petaluma, California. And today I want to talk about the nine things you need to know about your estate planning after a divorce.
A lot of folks are trying to get their divorce finalized before the tax law changed in 2018. One of the most important tax law changes you need to know about is if you pay alimony. It’s no longer going to be able to be deducted on your income tax. And if you are a recipient of any alimony it’s no longer going to be included in your income. So those of you who are paying it, you may want to look at that because you’re going to have to be paying more taxes. Maybe it means a reduction in your alimony. So, what are the other nine things you need to think about your estate plan after a divorce or disillusion. They’re very important.
Number one is get that disillusioned or divorce agreement to your estate planner if you have one and hopefully you have an estate plan because it’s very important you do. If you do, you’re going to need to revamp some things. Obviously if you don’t, you need to get, you need to get one.
The first thing you’re going to want to do is make sure you update your health care agents. Because, if you don’t do that and your spouse is still your decision maker when you can’t make your health decisions, that may not be something you want to have happening.
Along those same lines, the second is. or the third. Is if you also have a durable power of attorney and your ex-spouse is name you might want to change that to someone else because that’s the person who has control over your finances. If you can’t control them or even if you can, that someone can step in financially for you.
Then you also, and this is number four. You want to revise those wills and those trusts you’re going to have different executors. You’re going to have different trustees. It’s no longer going to be your ex-spouse. And you don’t want them hanging on there if something happens to you and your ex-spouse is now in charge of all your assets.
Number five. If you have minor children, look at the guardianship. In some cases your spouse might have been abusive or, you know, on drugs or alcohol and you don’t really want them to have physical care of your minor children if something happens to you. If you don’t name anything then the kids will probably automatically go to that ex-spouse. So, look at that and talk to your estate planner about changing that.
Number six is also provide a financial trust for your children within your documents, within your trust or your will, so that their money is controlled by someone other than your ex-spouse. If you don’t want that to be the case. Someone you trust and someone who will take care of their assets. Otherwise, if you don’t and your spouse will be the guardian of your children, can apply to be the financial guardian of your children and manage all that money until they’re 18. For some people that’s a scary prospect.
Number seven is, check your beneficiary designations. Redo those on your IRAs, your 401k’s, your deferred comp if you’re in some kind of government work. Make sure it’s the right person who’s going to inherit those assets if something should happen to you.
Number eight is life insurance requirements. A lot of dissolutions require if there’s minor children that the spouse, or one of the spouses, or both have life insurance policies and name the ex-spouse as the primary beneficiary for the benefit of the kids. But if that’s the case, be aware of that and don’t change if you remarry or decide to put your brother or sister on that life insurance policy because you don’t trust your spouse or ex-spouse. And if you change it without complying with the dissolution order there could be litigation.
And finally, if you decide to get remarried, get a prenup. Prenups sometimes are done by estate planners but they can often also be done by a family law attorney.
So, those are the nine things to really be aware of and clean up your finances and your estate for the benefit of you and your children and save everybody a lot of heartache and make things clear. Find a qualified estate planner to help you do that today.