What is Estate Planning in Divorce?
Latrice Knighton is an award-winning divorce attorney, life coach, and speaker. She solves problems using her experience and legal knowledge to offer practical advice.
Jacqueline Messler works for Davis & Kuelthau and practices areas as an attorney that deals with estate planning.
There are lots of issues that pop-up during divorce like custody, placement, and division of assets. In the end, we get all of those things accomplished but then there’s a question: what is next?
Today, the hope is that you we get you guys ahead of everything by starting to think about estate planning.
What is a “estate planning”?
Estate planning covers a couple of broad areas. It covers preparation of wills, preparation of trusts, preparation of a prenuptial agreement, preparation of a postnuptial agreement, financial powers of attorney, and many other things.
It typically consists of wills or trusts, and then the powers of attorney.
What is the difference between a will and a trust?
A will is a document that is going to cover what happens to your assets that are subject to probate. Probate is that court overseeing process that administers someone's estate after death.
A will allows, if the parent(s) die, the parents to say who will then take care of the minor children after they had passed away.
If the parents are divorce they are able to nominate someone else to become the parent, assuming the other parent is unfit to have custody and placement of the child.
A revocable trust is the typical estate planning document that is being talked about. The trust is an entity that acts sort of like a Limited Liability Company (LLC). It’s an entity that you create during your lifetime that basically says: “as the creator of the trust, I have control over it and I can revoke and modify it”.
If you put your assets in the name of the trust, you are the trustee (money manager) and it doesn’t complicate the management of filing of your assets as long as it's a revocable trust.
The main difference between a trust and a will is that when you have assets that are either currently titled in the name of the trust during your life time or passed through your trust, then those assets will not be subject to the court process.
How do you help families with guardianship?
Some types of guardianship that I help with are usually if money is left to a minor child, whether that be through inheritance or an insurance policy, so that the parents have to request guardianship of the child so that there is financial oversight as to what happens to that money once it’s paid out.
Another one that I do is if there is a special needs child and the parent may be talking about how they need to be able to make decisions, decide where the child is going to live, what kind of medical treatments will the child have, and some other things the parent might not be able to control once that child turns 18 years old.
The last most common one I see is with the children of aging parents when they do not have health care power of attorney or financial power of attorney when seeking guardianship of the parents to be able to make decisions for the mom or dad.
What are powers of attorney?
The power of attorney is a document where the principal of the person is appointing an agent to make decisions for the principal. The two most common would be with financial and health care decisions.