No matter which parent is in my office, they are inevitably going to ask me “Does it even matter if I choose a guardian? Won’t her other parent get custody anyway?”  In most situations, yes, the other parent will be the natural guardian of the child.  However, I still advise my clients to select a guardian and at least one alternate to serve in the event that both parents pass away.

There are a couple of reasons for this.  One is, you never know what will happen.  Your former spouse could predecease you and you want to be sure you’ve nominated someone.  You could predecease your former spouse, but in the event that he or she passes away while your child is still a minor and there is no other document nominating a potential guardian, yours would be used by the court to determine what the parent’s intent was for their child.

Additionally, if you and your former spouse can agree on guardians to serve if neither parent is around, you can both make provisions to name that person, which again provides valuable guidance to the court.

“It doesn’t matter anyway” is an easy excuse to use to put off making a plan, but doesn’t your child deserve better than that?

This is a common question from my clients, and something that often holds people up from making a plan.  The simple answer is: not necessarily.  The more complete answer is below.

1. Check the Divorce Agreement. The first thing to do is check your divorce agreement or parenting plan. Often there will be instructions in there about any money you may be required to leave the other parent, in the form of life insurance or other provisions.  There may be a requirement that one or both parents fund a trust for the child.  If you aren’t sure what the terms mean, you should check with your divorce attorney and definitely bring the agreement to the meeting with the estate planning attorney.
2. DIY Estate Planning.   What I often see people doing is naming their minor child as the beneficiary of their life insurance policy or retirement accounts, as a form of do-it-yourself estate planning.  They mean well and figure that their child will be provided for with this money.  What they may not understand is that a minor child cannot inherit outright and a conservator will need to be appointed by the Court to handle the money until the child turns 18.  Most often, the surviving parent will be appointed the conservator and have full control over the money.  And the child will have full access to the funds the day they turn 18.  If either one of these things does not appeal to you, you need to go a step further.
   The other way that people often attempt to do their own estate planning is to name a sibling or parent as the beneficiary of these policies with an informal agreement to use the money to care for the child. This carries its own risks because the funds could be open to claims against the sibling by creditors, could get mixed into a sibling’s divorce, or could be at risk if a parent is on Medicaid or other public benefits.
3. Estate Planning On Your Terms. The best way to insure that your wishes are honored even after you have passed away is make a legal agreement with someone you trust to handle the funds for your child in the way you instruct them to and to set the ages at which your child will be able to access the funds themselves.  Your estate planning attorney can help you decide the best option in your situation and according to your budget – whether it’s a fully funded revocable trust, a testamentary trust or some other method.

The key is to not let your concerns hold you back from putting a plan in place.  Your attorney should walk you through all the options and answer all your questions before the documents are finalized.  Then you can rest assured that your child’s inheritance will be managed by the people of your choosing according to your instructions.

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Estate Planning, Probate and Trusts involve complex areas of law. Individual circumstances must be considered before any advice can be given.  The general information above is not to be construed as legal advice, which can only be given after consideration of the unique facts of each matter. Please seek the advice or counsel of your attorney, financial advisor or CPA as it may be appropriate.

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Surviving Divorce…The Road Ahead Workshop

Legal, Financial and Credit/Debt advice for people who are divorced, divorcing or contemplating divorce

        When faced with divorce only one thing is certain: CHANGE. Managing such dramatic life changes without a strong support system can be overwhelming. That is why we have assembled an interactive, two evening Workshop with legal, financial and mental health divorce professionals to help you strategize your new life and address these important issues. Please join us.

At the workshop, we’ll discuss:

 Hosted by:
 Gail P. Otis, Family Law Attorney

Leanna Hamill, Estate Planning Attorney

Gabrielle M. Clemens, JD, LLM, Certified Divorce Financial Planner

Lisa Machoian, Ed.M, Ed.D , Child Psychologist, Author

Katharine Greeley, BS, MBA, Credit Management/Mortgage Financing

 RSVP to Leanna Hamill at 781-749-2284.  Space is limited. Refreshments will be served.  This workshop is complimentary.

Many times the terms used in the divorce agreement regarding the trust are not clear – for instance if "minor children" is used in one place and "emancipated children" is used in another, which was meant?  If it refers to a providing for funds for a "secondary education" does this mean only at an accredited school, or would a trade school qualify?  Trying to interpret the answers to these questions after the divorce is final so that the trust can be drafted to comply with the agreement can be time consuming and costly.  In addition, if the other party disagrees with how the trust was drafted based on vague language in the divorce agreement, that can lead to more costs and time with the divorce attorneys hashing out what their clients meant in the agreement, and the estate planning attorney having to redraft the trust. 

Checking in with an estate planning attorney when you are including language about a trust in a divorce agreement can save you and your client a lot of time and hassle, and the estate planning attorney might bring up some issues you hadn’t thought of with regard to the trust. 

You are nearing the end of your divorce, the final hearing or settlement is in sight.  The last thing you want to do is hire another attorney, write another check out of your bank account which may have taken quite a hit during the divorce.  But, you must.  You need to see an estate planning attorney, to make sure that those things you fought for in the divorce are protected, and that your wishes are honored.   And, rest assured, visits with an estate planning attorney do not involve any court visits, there are no "opposing parties" and generally estate planning attorneys do not charge by the hour. 

You should meet with your estate planning attorney to form your plan before the final divorce hearing, so that the documents can be signed as soon as possible after the final hearing.  This is because during the 90 days after the final hearing, you are still married, and if you pass away during this time without a new plan in place, your soon0-to-be-former spouse could inherit everything.

After your divorce, in addition to signing your new estate planning documents, you should also make sure that you have changed the beneficiaries on any life insurance policies, 401(k) plans, IRAs, and any other accounts that may have had your former spouse listed.  If you have set up a trust, your estate planning attorney can assist you in making sure that the trust is properly named as the beneficiary of these accounts.

For thoughts on this subject from a Family Law Attorney’s perspective, visit the Massachusetts Divorce and Family Law Blog written by Attorney Steven Ballard, who posted about this on Saturday. 

1. If you have signed a health care proxy naming your spouse as the person to make medical decisions for you, you should revoke it and sign a new one appointing someone else.   Notify your spouse that you have revoked the HCP naming them.  Make sure that anyone who knows of the old HCP (such as your doctor) is given a new one.  If you have not signed a HCP, sign one, and make sure your doctor has a copy and carry a card in your wallet indicating who your new health care agent is, and where your HCP is located.
2. Remove your spouse from any Power of Attorney documents that you’ve signed appointing them and notify any entities that may have received a copy of the old Power of Attorney so they know it has been changed.  The POA is a powerful document which can give the holder the right to access bank accounts that are in your name alone, get financial and sometimes medical information about you and even sell real estate that is your name.  It is vital that you sign a new one if you do not want your spouse to have this power. 

During this time you should also be thinking about your estate plan after your divorce. If you would not want your former spouse to be in charge of the money that you will leave to your minor children, you will need to set up a trust, with someone else as trustee.  This can be a sibling, parent, friend or even a bank or other financial institution.  Your estate planning attorney can explain what the responsibilities of the trustee are, so that you can make the best choice, and can help you determine when the best time to sign the new documents are.

Tune in tomorrow for "Post-Divorce Estate Planning Tips".

For further thoughts see the New York Probate Litigation Blog.