Estate Planning Ideas for Divorced & Separated Persons

By Kenneth A. Vercammen, Esq

If you do not write a Will, the government has already written one for you. Your assets go to whoever a state law says receives the assets, or to the government itself! A Will should be a statement to the things you truly care about: your children, your parents, your friends, your Church and charities.

As average Americans, we work 80,000 hours in a lifetime, or 45 to 55 years. In the havoc after a break up, many persons forget to have a

Will done to assure assets and decisions are taken out of the hands

or the ex spouse and ex spouse’s family.

In spite of all our resources and the assets we earn during our lifetime, the vast majority of Americans do not take the time to create the legal instructions to guide the court or a guardian upon their death. National statistics indicate that more than 50% of Americans foolishly die without leaving a Will. In the absence of a Will or other legal arrangement to distribute property at death, the problems often arise and a Judges decides who gets custody of your children and handles your money. This process is called the law of intestacy. The result can be lengthy delays in the distribution of your estate, court battles between relatives and your children being raised by someone you do not favor. Without a Will, your family will have to pay substantial costs for accountants, attorneys, bonding companies and probate fees.

In planning, make sure your assets go to your loved ones or favorite charity, not an "ex". Therefore, you may wish to do the following:

1) Have an Estate Planning Law attorney prepare a Will to distribute your assets to the people you care about the most. If you already have a Will, prepare a new Will and have the old Will revoked. (Your estate planning

1

attorney will explain this to you.) Usually a new executor is selected, who will also serve as funeral agent.2) Prepare a Power of Attorney to select someone to handle your finances if you become disabled. Have your old Power of Attorney revoked. This means your attorney or you should send notices to banks and your accounts to indicate the prior Power of Attorney is invalid.3) Select the correct beneficiary on assets you may own, such as stocks, bank accounts, IRA, and other financial assets. Make sure you see the actual change in beneficiary in writing. Don’t rely on a phone call from the company. Change passwords on all online accounts and notify them in writing that the former spouse is not permitted excess to records.4) Change your beneficiary under your own life insurance, whether whole life insurance or term insurance.5) Contact your employer's human resources and change the beneficiary on life insurance, pension, stock options or other employee benefits. Note that if you are not yet divorced, your spouse may have to sign a written waiver permitting you to change beneficiaries.6) Keep your personal papers at a location where an ex-spouse or the child's parent can't steal or destroy them. 7) If you have minor children, nominate someone under a Will to serve as guardian to the children. Although the surviving parent obviously has first right of custody of children, they may not even want custody.8) Make sure the trustee for any funds designated for your children is the "right" trustee. The former in laws may no longer be the best choice.9) Have your attorney prepare a prenuptial agreement, if you decide to get remarried, so your children can inherit your assets. ) You want your children, not new spouse, receives your assets if you pass away.10) In New Jersey, if you are still married and living with a spouse, under certain instances the surviving spouse has a right to "elect against the Will". The disinherited spouse may try to elect against the Will and try to obtain one third of the estate. Your attorney can explain how you can protect yourself and your children.

11) Have a new Living Will prepared to remove the ex and select a family member you trust with last medical wishes. The Living Will should contain new HIPPA language to advise doctors and hospital who should have access to medical information.

If You Have No Will:

2

If you leave no Will or your Will is declared invalid because it was improperly prepared or is not admissible to probate:

1. People you dislike or people who dislike and ignore you may get some of your assets.2. State law determines who gets assets, not you3. Additional expenses will be incurred and extra work will be required to qualify an administrator-Surety Bond, additional costs and legal fees4. You Lose the opportunity to try to reduce Estate Tax, State inheritance taxes and Federal estate taxes5. A Judge determines who gets custody of children. A greedy brother or crazy mother in law could ask the court for custody.6. It probably will cause fights and lawsuits within your family7. The procedure to distribute assets becomes more complicated 8. The parent of your children may try to control the assets of your children and not properly spend the money

ESTATE PLANNING TO PROTECT CHILDREN

There may come a time when an unmarried parent is unable, due to physical or mental incapacity, to take care of their minor children. If a parent dies, the minor children will need a guardian. In these circumstances, those caring for the children, as well as the courts will need direction. By writing and executing a Will, which includes instructions on guardianship one may select someone, either individually or jointly, with the legal authority to act for minor children and assume control over the assets of the children. Estate planning, which includes the execution of a Will, is just as important for persons with minor children as they are for senior citizens.

Guardians Most individuals appoint the parent to act as Guardian of the person and property of their minor children. It is suggested that your Will include a clause which provides that in the event the other parent predeceases you, or is unsuitable or ceases to act as Guardian of the person and property of your

3

minor children, you appoint a trusted family member or close friend to act as successor Guardian of the person and property of your minor children.

Trustee Select a trusted person, your close relative or friends, who will invest and hold your children's money. In your Will you can instruct the Trustee to apply amounts of income and principal as they, in their sole discretion, deem proper for the health, maintenance, education, welfare, or support of your children or other minors. Direct that the trustee shall accumulate any income not needed for the above purposes, paying and transferring the portion held in trust to the beneficiary upon his or her attaining the age of majority or whichever age you select.

Conclusion While the preceding article contains possible items to be discussed with your family, attorney and executor, the article is by no means exhaustive. A number of these items may not be applicable in your situation, and probably there are many others that are applicable. The essential element is to spend some time now considering what you should tell those most closely associated with you to facilitate their handling of your affairs upon your death.

About the Author:

← Kenneth Vercammen is a Litigation Attorney in Edison, NJ, approximately 19 miles north of Princeton. He is author of the ABA’s new book “Wills and Estate Administration”

He often lectures for the American Bar Association and New Jersey State Bar Association on personal injury, criminal / municipal court law and practices to improve service to clients. He has published 125 articles in national and New Jersey publications on legal topics. He has served as a Special Acting Prosecutor in seven different cities and towns in New Jersey. He has spoken on Wills and Elder law on numerous occasions to the Adult Community Schools in Metuchen, Sayreville, Old Bridge, South Brunswick and Edison/Clara Barton Seniors and Perth Amboy Seniors.

In his private practice, he has devoted a substantial portion of his professional time to the preparation and trial of litigated matters. He has appeared in Courts throughout New Jersey several times each week on many personal injury matters, Municipal Court trials, arbitration hearings and contested hearings. He is also a popular speaker for the American Bar Association's General Practice Section and Law Practice Management Section.

4

KENNETH VERCAMMEN & ASSOCIATES, PCATTORNEY AT LAW

2053 Woodbridge Ave.Edison, NJ 08817

(Phone) 732-572-0500 (Fax) 732-572-0030

website: www.njlaws.com

5