We interviewed Trusts and Estates attorneys, Noah Herbold and Tamsen Reinheimer, from the Law Offices of Mortensen & Reinheimer, about critical issues that should be addressed surrounding marital dissolution.
Q: What is the biggest mistake you see from newly divorced clients?
A: People who are newly divorced or are in the process are typically concerned about figuring out who will get what, and what they are going to do with what they got. These are very challenging decisions and difficult conversations. For example, who should get the former marital home when they pass? Is it the former spouse who is a Trustee? Perhaps it is property that the individual would rather have go to a foundation or memorial scholarship, but a family member wants it. Many individuals who have been divorced feel they have a lot of masters and they don’t want to offend anyone.
Q: Why is important to have an Estate Plan?
A: After divorce, finances are often not what clients want them to be. Estate planning can be a last priority for many people. People find excuses to put off planning, such as, “I just got divorced and now I need to get my earnings up before I create a plan.”
If there is no estate plan or living trust, the State will make the decisions. It is wise not to put off this important decision until later, even if you plan on increasing your wealth in the future.
If there is only a legal separation the “surviving spouse” may still be able to inherit. Or in the case in which either or both spouses have been married before, the client should consider the spouse’s or ex-spouse’s children.
The most important aspect of an Estate Plan is the Living Trust, which is the building block of an Estate Plan and completely avoids probate. This also provides privacy for the family and cost savings as probate is always backed up and slow, and can be expensive. A Living Trust can be amended anytime, including if and when an individual’s estate increases in size after divorce.
It is generally quick and easy to create an estate plan.
Q: What other information should those planning a divorce be aware of with regard to estate planning?
A: Before a client files for divorce, he or she should consult with an estate planning attorney and a family law attorney together. These are important issues not to be left to chance that these professionals together can help to navigate. the case is always beneficial.