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
Ah, home sweet home. Home is your happy place where you can rest and unwind. It is the place you selected to start your family and where you and your family make memories. There is justifiably so much sentimental value tied up in the marital home, which is why deciding on the final disposition of the home is one of the most daunting, but important decisions to make during the divorce process.
If you’ve owned a home in Massachusetts for more than a few days, chances are that it has gone up in value since you purchased it. Massachusetts has seen its median sale price for homes skyrocket by over twenty percent in the past five years, with total appreciation rates of nearly thirty percent during that same period. So, in addition to that sentimental value, it is also likely that your home has a lot of market value, which can be both a gift and a curse in the context of a divorce proceeding. Sure, more money is great, particularly when each party is (in)voluntarily reducing her/his total net worth by roughly half in the divorce, but these high values of real estate often dwarf the rest of … Keep reading
The federal estate tax (sometimes called the death tax) is a one-time tax that is imposed at death. If you die with a certain dollar amount of assets, an estate tax return may be required and a tax may be due. If a return is required, it is due 9 months after the date of death.
Sometimes clients confuse the estate tax with an income tax, but it is not a tax on income. It is a transfer tax. Essentially, it is a tax on the wealthy imposed at death.
When does it apply?
In 2019, a federal estate tax is due for all estates with assets of $11,400,000 or more. If you die with a gross estate under $11,400,000, no estate tax is due. If your gross estate is over $11,400,000, you pay a tax on the overage. In general, the tax rate is between 18% and 40%, but it gets to 40% pretty quickly.
The large exemption amount is due to the recent changes in the tax laws that took effect in 2018. The federal estate tax amount used to be $5 million adjusted for inflation. It is now $11 million adjust for inflation so it increases … Keep reading
To the recent high school graduates from the class of 2019, congratulations! For the parents (particularly divorced or divorcing parents) of the recent high school graduates from the class of 2019, I hope you’ve saved some money.
High school graduates are going off to college at increasingly high rates. Unfortunately for parents and students, the cost of tuition, room, and board for colleges and universities has skyrocketed within the past decade. Some schools are now topping out at a whopping $70,000 per year for these costs. I apologize in advance to our readers who expected a quip about the recent college bribery scandal; as a proud alum of the University of Southern California (was not on the crew team), I will limit this discussion to the publicized retail cost of colleges and universities. Go Trojans!
For family law attorneys, the issue of college costs is invariably at the forefront of our minds when dealing with any case involving children of college age and younger. Even divorce agreements in which a child is only a toddler will often mention at least some aspirational language regarding the parents’ mutual desire. Such as for little Jimmy to “have the opportunity to attend … Keep reading