It’s advisable to review and update your estate plan with any change in personal circumstances, financial circumstances, changes in the law, or just the passage of an extended time. But if you’re in the midst of a divorce, or contemplating one, this may be the furthest thing from your mind. Here are a few key reasons why you should make updating your estate plan a top priority:
Divorce can take a while. Divorce proceedings often take many months, and you wouldn’t want your soon-to-be-ex-spouse benefitting from or having any rights with respect to your estate if you were to die in the meantime. While beneficiary designations for certain assets cannot be changed once a divorce proceeding is filed, you may be able to update documents like a Will, Trust, Durable Power of Attorney, and Health Care Proxy at any time, whether or not your divorce is finalized.
Your estate plan may no longer reflect your wishes. In Massachusetts, a final divorce automatically revokes any beneficial provisions for and fiduciary appointment of your former spouse (or his/her family members) in documents like your Will and Trust, but leaves the rest of these documents in-tact. The “back-up” individuals named in your … Keep reading
The Price of Peace: a concept that arises in nearly every divorce matter, but you will likely never read about in any legal treatise on divorce law. You commonly hear about transactional costs (I.e. legal fees) and the cost of alimony or child support, but the price of peace is not commonly spoke of in mainstream divorce literature.
So what is the price of peace? To use a common lawyer answer, “it depends.” Generally speaking, the price of peace is a tangible or intangible cost for moving on. It is individual to every person or couple going through a divorce. It is that thing that a person is willing to forego in order to be done.
An example of a tangible price for peace is the following: Jane and John Doe are involved in heated negotiations to resolve their divorce matter. They have agreed on all matters, except they both want the new bbq grill that was purchased just before they separated. Recognizing that the transactional costs are steep, and that there is great value in resolving the divorce matter and moving on, Jane agrees to allow John to keep the bbq grill. The price of peace for Jane … Keep reading
Divorce is hard. Along with all the emotional upheaval associated with the end of a relationship, the legal wrangling and disputes over division of assets, allocation of liabilities, parenting plans and the appropriate amount of support can be challenging. When special needs children are involved, parenting and support issues become even more complex.
Special needs children can place extraordinary demands on their caretakers. In fact, taking care of a special needs child often becomes a full time job for one of the parents. The parent who sacrificed his/her career to care for the child is likely to be faced with on-going caretaking responsibilities beyond the child’s age of majority. Determining spousal support for the caretaker-parent must account for the lost career opportunities both in the past, as well as in the future.
Where a child suffers from a physically debilitating condition, there can be challenges involved in meeting the child’s daily care needs, equipment, and specialized treatments that need to be considered. Parents may not have the financial ability to have two sets of necessary equipment to allow a child to safely spend time in each parent’s home. This creates additional problems when it comes to fashioning a parenting … Keep reading
If you are getting divorced, you may find that your marital assets include interests in one or more trusts. It could be that you and your spouse established the trusts during your lifetime, or perhaps a family member created the trusts for the benefit of you or your spouse. Either way, you need to know what the trusts say. They may play a crucial role in the division of your assets or the support you will receive.
It is not uncommon for folks to know little about what the trusts say or do. It happens all the time and is no reason for embarrassment. It is a good idea to begin to read the trusts yourself and to ask questions about them. You should rely on the advice of a trusted estate planning attorney. If your divorce lawyer does not have an estate planning lawyer that he or she works with, you will need to find one. Here are a few tips in reviewing your trust:
Familiarize yourself with the terms. There are basic terms of the trust that you will need to know. (Hint: A lot of this information will be found on the first page of … Keep reading
My colleague, Jordan Bowne, recently explored the issue of whether the marital home should be retained by a party or sold when assets are divided in a divorce. Before getting to the point in the process where that decision can be made, parties often find themselves in the uncomfortable position of living together after their relationship has soured and contested litigation is underway. Going through a divorce is hard, but it is even harder when you are still sharing a bathroom with your soon-to-be ex. Clients sometimes think that one party is required to move out once a divorce matter is filed with the Court, but that is not the case. When the stress of living together gets to be too much, the question often asked is – how do I get my spouse out of the house?
The easiest, and best, option for separating is to have an adult conversation about who should stay living in the shared residence and who should move out. This will necessarily include consideration of finances in the short-term, how time and relationships with the children will be impacted, and how long the divorce process will take.
When a mutual decision is not … Keep reading
People often ask “Why do I need a trust?” Some folks think they can get by with a simple will. Here is why you probably need more than that:
- Estate tax savings. Depending on the size of your estate and your state’s tax laws, there may be a significant tax advantage to including trusts as part of your estate plan.
- Probate avoidance. If you fund your trust during lifetime, you will avoid probate. Avoiding probate means your family will not have to go to court to authenticate your will after your death in order to access your assets. It saves time and money.
- Planning for incapacity. Another benefit to funding your trust during life is that your successor trustee can access the assets for your benefit if you become incapacitated. If you are in the hospital or a long term care facility, who will pay your bills and manage your assets? If your trust is funded, the successor trustee can do that. Otherwise, your family may have to go to court to have a conservator appointed to oversee your assets.
- Limiting children’s access to their inheritance. If you have minor children, you want to make sure their inheritance is
… Keep reading
According to the Massachusetts divorce statute:
Judgments of divorce shall in the first instance be judgments nisi, and shall become absolute after the expiration of ninety days from the entry thereof, unless the court within said period, for sufficient cause, upon application of any party to the action, otherwise orders.
A “judgment nisi” means a judgment that comes into effect on a specified date unless within a certain time period cause is shown why it should not go into effect. For spouses getting divorced in Massachusetts, the nisi period results in the parties remaining married for 90 days after the Judgment of Divorce is issued. So what exactly is the reason for the nisi period?
The nisi period is a waiting period designed to allow parties to change their minds about the divorce, even those who have gone through protracted litigation and a trial. For couples who file an uncontested Joint Petition for Divorce pursuant to G.L. Chapter 208, Section 1A (instead of a contested action initiated under Section 1B), there is an additional 30 day waiting period between approval of their settlement agreement and the issuance of the Judgment of Divorce, elongating the wait to be single to … Keep reading
The First Crime in Space! Recent headlines from The New York Times and other prominent news agencies drew in readers stating that the first crime in space had allegedly been committed. The articles went on to discuss the thorny privacy and jurisdictional issues given that NASA was involved and the crime was purported to have occurred on the International Space Station, where astronauts from the United States, Russia, Japan, Europe and Canada orbit the Earth. At its heart, however, the supposed first crime in space is a bitterly contested domestic relations matter involving income, assets, custody of a child, and de facto parent status.
Summer Worden and Anne McClain (a decorated NASA astronaut who was tapped for the first all-female spacewalk, and is in consideration to be the first woman on the moon) were married in 2014. Ms. Worden has a son, who was born approximately one year before the parties met.
By 2018, the parties’ relationship had broken down, and Ms. McClain, who had no legal status as a parent to Ms. Worden’s son, approached a Texas Court asking for shared parenting rights to the child and “the exclusive right to designate the primary residence of the child.” … Keep reading
On July 8, 2019, the Massachusetts legislature approved changes to the law surrounding orders for health insurance coverage in cases where child support is ordered. The statutes impacted include G.L. c. 208 (the divorce statute) and G.L. c. 209C (for children of unmarried parents). The law, entitled An Act Making Appropriations For The Fiscal Year 2019 To Provide For Supplementing Certain Existing Appropriations And For Certain Other Activities And Projects, provides for, among other things, the following:
- If the Court enters a child support order, either parent may be ordered to maintain health insurance coverage for a child if such coverage is available at reasonable cost and is accessible to the child. Under the previous law, only the parent paying child support could be ordered to maintain coverage for a child, unless the parties otherwise agreed.
- Health care coverage is deemed to be reasonable in cost if the cost to the party ordered to provide health care coverage does not exceed 5% of the gross income of that party. Further, private health insurance shall be deemed not available at reasonable cost to a parent whose gross income does not exceed 150% of the federal poverty guidelines for the family
… Keep reading
As you know from my prior posts, I appreciate the interplay between divorce and estate planning. I enjoy working on cases where both worlds collide, and have been fortunate to be involved in some very interesting cases, which have involved irrevocable trusts.
A common misconception relating to irrevocable trusts is that they can’t be altered. This is not actually the case in many circumstances, and is important to remember, especially when family circumstances change, such as when a divorce arises.
A trust is irrevocable because either the donor (the person who established the trust) has died, or because the trust’s terms make it irrevocable. Changing an irrevocable trust can sometimes be done through a process known as decanting. When a trust is decanted, it is replaced by a new trust and the assets of the original trust are transferred to a new trust.
The Rhode Island decanting law lays out some specific requirements for an irrevocable trust to be decanted. Some of those requirements include the following. First, the terms of the original trust must allow for the trustee to make principal payments to one or more beneficiaries. Second, the trustee must exercise the power to decant via a … Keep reading