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Estate Planning After Divorce

Posted by attorney Andrew Singer

I've been answering a lot of questions lately about how to plan after a divorce. A divorce can make planning (and life in general) more complicated. There are separate households to deal with, potential conflicts among ex-spouses and new spouses, and children from previous and new marriages, as well as step-children to provide for. It can be a challenge to determine how to divide assets among all of the parties involved and how to come together on issues such as guardianship of children. In California, if you die without a will or trust in place, the court is required to distribute your property as determined by law. That means all of your community property will go to your current spouse and any separate property (property you brought into the marriage or received by gift or inheritance while married) will be split between your current spouse and your biological and adopted children. These default rules may not be how you'd like to see your property distributed. You may want to leave something to your step-children. You may want to leave more to your children from a previous marriage if your current spouse has more assets than your previous spouse. If your new spouse has less substantial assets you may want them to receive a larger portion of your estate. If your children from a previous marriage are adults and you have young children or step-children with your current spouse, you may wish to leave more, or everything, to your current spouse. Estate Planning attorneys often use the estate tax marital deduction as a tool to pass assets free of estate tax to your spouse when you die. This may not be the best planning tool, however, for a second marriage. Using this could mean that your children from your previous marriage could end up with nothing. Instead, there are better strategies that can allow you to provide for your spouse with income from a trust throughout their lifetime, and you can allow them as much or as little control over the trust as you like. When they die the trust can pass the remaining assets to your children from your previous marriage or in any other way that you choose. Another concern of planning after divorce is guardianship of your children. It's best to try to make a joint decision about who you and your ex-spouse would like to raise your children if something were to happen to both of you. The last of you to die will be the one whose will and guardianship choices are controlling. So, as difficult as it may sometimes be to come to an agreement with your ex-spouse, for your peace of mind, it can be best to decide together who you'd like to be the guardian of your children. You also may want to consider how the inheritance you leave to your children will be managed. Without thoughtful estate planning, your ex-spouse would control money you leave to your minor children. If this is not what you would want you can establish a trust for your children and choose another person to act as trustee. The trustee will be obligated to ensure your ex-spouse uses any funds distributed to him or her only in your children's interest. There is a lot to consider in planning after a divorce. It's best to work with an attorney who understands the complications and can walk you through the difficult decisions.

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