Takeaways from UNtied’s Expert Call on Wills, Trusts and Estates expert call with Catherine Sloane, Trust & Estates Attorney at the firm of Walden Macht & Haran, LLP
1). You can and should update several documents even before you are officially divorced.
a). Will. While you cannot completely disinherit your spouse, you can limit what portion of your estate they receive. Note that it can become tricky if all of your assets are shared. You can also change your executor, your trustee, as well as any backup beneficiaries (such as spouse’s relatives).
b). Power of Attorney. You can also change your designated Power of Attorney who will make financial decisions should you become incapacitated.
c). Health Care Proxy. Change the person you wish to be responsible for making your healthcare decisions if you become incapacitated.
2). If you and your spouse shared a Trust and Estates attorney when originally creating your wills, you will need a new attorney to redraw your documents (unless that attorney is permitted by your spouse to work only with you going forward). Important to note that your Healthcare Proxy can be done without an attorney if necessary- forms can be downloaded from the State Health Dept.
3). If you are close to completing your divorce agreement, check out the existing documents that you have (assuming you’ve drawn up a will at some point). Wills often include a divorce term that states “in the event of divorce, this document shall read as if my spouse predeceased me.”
3). At what age can one of your children take on either the role of health care proxy or power of attorney? Your decision, but generally, most kids are able to make healthcare decisions before the financial decisions.
4). Things NOT to do while you are in divorce negotiations:
Make big gifts from any marital account or asset
Change the beneficiary on retirement accounts
5). 2020 Estate Tax Laws
$11,580,000 lifetime gift exemption, you can give away without gift and estate tax
$15,000 annual exclusion, you can give up to that amount to anyone without owing tax
Gifts made directly to an institution (ie. College) is exempt from gift tax.
Remember most (but not all) states also levy estate taxes.
6). Probate v. Non- probate assets. What is your taxable estate? The only assets that pass through your will, are assets in your name only without any designated beneficiaries. Very important to review all the beneficiaries of your retirement account, etc.
7). Most divorce agreements stipulate that new estate docs need to be drawn up within 18 months, but many never get it together to actually do it. Similarly, there is often a stipulation in a divorce that the higher earning spouse takes out a life insurance policy. If this is the case, there should definitely be a stipulation that allows the other spouse to be certain it is paid monthly.
8). If you are a single parent, consider drawing up a Life Plan to help your designated guardian should you die unexpectedly. This might include your important values, rules and principles.
9). Make sure you keep your documents in an organized way so that people can find them if something happens to you! Your health care proxy should be copied and shared with your doctor and your designated “agent” (ie. The one who will make your healthcare decisions if you are not able to). Take it with you if you are going in for major surgery or to the ER, etc.
10) Catherine Sloane gives each of her clients the following list she calls The Vault, which includes all important info your executor and guardian might need in the case of your death.