Each state has individual divorce laws, which means that what’s true in one place is not necessarily true in another. Interpretation varies a lot from state to state when it comes to wills following divorce. This is why both spouses need to be informed and aware of relevant issues. It’s a good idea to set up a meeting with your estate planning attorney early on in the divorce process, if not immediately after you have the relevant paperwork. If a will is private, or if a death happens before the individual has had time to update it post-divorce, there is no guarantee of intent that will be honored
More and more, however, individuals are considering putting verbiage inside their trusts to have a spouse removed in the event of a divorce. Like most aspects of putting together such critical documents, there are pros and cons to this approach. While safeguarding a trust by including such a provision might work out in the long run, not every divorce tears the couple apart entirely
Major life changes like marriage and divorce also warrant additional opportunities to work with this team of specialists to craft a plan. Physicians are exposed to threats through medical malpractice lawsuits, for sure, but the risks go even deeper than that. Partnerships and divorce pose a major threat to a physician’s wealth without special planning
The trust protects the assets from being exposed to risk through divorce, a beneficiary’s creditors, or other predators in the future
These risks can come from multiple different directions, but all of them can be very damaging. A divorce or an argument within a partnership can both be frustrating and unfortunate, but they can generate vastly different outcomes
This can change, especially if the main beneficiary passes away before you do or you get divorced. Make sure your papers are in line with your life changes
There are five key benefits to using a revocable trust: Keeping assets within the reach of immediate family members (as opposed to future spouses, step-children, or even in-laws) Protecting a child’s inheritance from bankruptcy or divorce Planning ahead for beneficiaries with special needs Keeping the estate out of probate Maximizing the estate tax exemption (this is critical in states where the estate tax threshold is relatively low compared to the assets held by many people) When you set up a revocable trust, you do so with you own money and control it as a trustee over the course of your life
If there are life changing events (such as a marriage or divorce) or if the law changes, you need to get your documents reviewed even sooner
Money for heirs is placed inside the trusts to protect those assets, but trusts can also be good tools for protecting children from the fallout of a divorce settlement or a lawsuit
we outline how to build win-win relationships with your COI that follows a similar approach to Ferrazzi. Gray Divorce and Recoupling: Legal and Financial Planning Issues for Older Adults Kimberly Foss and I facilitated a session and open discussion on Gray Divorce and Recoupling: Considerations after 50 . In recent years, gray divorce and cohabitation among those over 50 have seen a steady increase – making it even more important for financial advisors to be aware of the unique legal and financial planning issues that arise when an older adult introduces a new partner into their family unit. When crafting a comprehensive plan for retired clients, consideration must be given to implications such as Estate Planning, Healthcare Planning, and ensuring their financial interests are protected when entering a gray divorce or recoupling. Here’s a great resource from Empyrion Wealth Management
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