10 Estate Planning Ideas for Divorced
Persons
By Kenneth A. Vercammen, Esq
There
may come a time when a parent is unable, due to physical or mental incapacity,
to take care of her 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 moms with minor children as
they are for senior citizens.
Where there’s No Will …
If you do not write a Will, the State 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. You
can consider remembering your church or school.
As
average Americans, we work 80,000 hours in a lifetime, or 45 to 55 years. 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 die
without leaving a Will . In the absence of a Will or other legal arrangement to distribute
property at death, the State must step in to administer the estate and decide
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.
If You Have No Will:
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 you
3. Additional expenses will be
incurred and extra work will be required to qualify an administrator-Surety
Bond, additional costs and legal fees
4. You Lose the opportunity to try to
reduce Estate Tax, State inheritance taxes and Federal estate taxes
5. 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 family
7. The procedure to distribute assets
becomes more complicated
8. The father of your children may try to control the assets of your
children and not properly spend the money
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 Elder 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 attorney will explain this to you.)
2) Prepare a Power of Attorney
to select someone to handle your finances if you become disabled. Have your old
power of attorney revoked.
3) Select the correct
beneficiary on assets you may own, such as stocks, bank accounts, IRA, and
other financial assets.
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) If you are not divorced or
separated from the father, keep your personal papers at a location where an
ex-spouse or the child's parent can't 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.
9) Have your attorney prepare a
prenuptial agreement, if you decide to get married, so your children can
inherit your assets. ) If you get married, have a formal prenuptial agreement
prepared by an attorney so 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 like 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.
ESTATE PLANNING TO PROTECT YOUR CHILDREN
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 father predeceases you, or is
unsuitable or ceases to act as Guardian of the person and property of your
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, a 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.
Children born after you sign the Will
Many people
direct that the provisions of their Will also applies to afterborn children. Accordingly, if you have
any additional children subsequent to the execution of this Will, then wherever
you have designated only your named children, you intend that all of your
children shall share equally in the relevant provisions of your Will.
In addition to having a formal Last Will
and Testament individuals are encouraged
to have a Power of Attorney and also Living Will. Moreover, we also recommend
they plan ahead and write messages to their family and anticipated executor
detailing their specific desires regarding funeral and burial. Written
instructions to your family and executor containing information and guidance
will minimize uncertainty, confusion, and possible oversights following your
death.
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 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.
Since 1985, his primary concentration
has been on litigation matters. Mr.
Vercammen gained other legal experiences as the Confidential Law Clerk to the
Court of Appeals of Maryland (Supreme Court), with the Delaware County, PA
District Attorney Office handling Probable Cause Hearings, Middlesex County
Probation Dept as a Probation Officer, and an Executive Assistant to Scranton
District Magistrate, Thomas Hart, in Scranton, PA.
Call our office to schedule a confidential
appointment 732-572-0500
KENNETH VERCAMMEN & ASSOCIATES, PC
ATTORNEY AT LAW
2053 Woodbridge Ave.
Edison, NJ 08817
(Phone) 732-572-0500
(Fax) 732-572-0030
website: www.njlaws.com
