The Summer Olympics, for the first time in an extremely long time, were postponed in 2020 as the world huddled from the coronavirus pandemic. Now that things are reopening and becoming more safe, especially thanks to the hard work of doctors, nurses, and researchers, the Olympics are back on!

They’re scheduled to take place Friday, July 23, 2021 through Saturday, August 8, 2021 in Tokyo, Japan. People are hyped over the Games, especially since we’ve been waiting for them an extra year. There will be fans there, but capacity is limited at 50%.

Postponement, limited capacity, and more reveal just how much life can change in an instant. What we think will last forever ends up just being a temporary feature in our lives. That’s right, we’re talking about the D-word: Divorce. 

Divorce: The Facts 

Few things take as much of a hard left turn as divorce. The statistics on marriage certainly look bleak, and the APA says that 40-50% of first marriages end in divorce. Second and third marriages fare even worse. Divorce is one of the most stressful things you can do, both financially and mentally. 

Financially, ending a marriage in Florida costs $13,500 if you have no kids (StateLaws.FindLaw.com). If you have kids, the average cost is $20,300 (StateLaws.FindLaw.com). Though this could be more or less expensive, depending on the issues that need to be resolved and the process of resolving them, divorce almost always costs in the thousands. 

Divorce and Estate Planning 

Divorce affects pretty much every aspect of your life, and that includes your estate plan. It’s a major life change, and you have to make sure that your estate plan reflects it. Taking your ex-spouse out of your estate plan is a must do. When you got married, you likely created an estate plan that involved your spouse. Now, it’s time to undo that. 

Revising Your Will

You’ll want to remove provisions that benefit your ex-spouse, and take your ex-spouse off the will as trustee and executor, assuming that you had them in that role. Make sure your ex doesn’t get any of your assets after you die, and don’t allow them control over your trust or estate. 

Update Power of Attorney

If you don’t want to be married to them, chances are, you don’t want them making decisions regarding your finances and healthcare if you’re too incapacitated to do so. If your old PoA named your ex to that position, revoke it. You can execute a new PoA, naming a relative, friend, advisor, or just someone you’re not divorcing. 

Update Healthcare Proxy 

There aren’t many people who would want their ex making decisions about their end-of-life care. If you had your spouse listed in a proxy position for those healthcare decisions, take them off that list and replace them with a non-hostile party.

Rethink Guardianship (If Necessary)

Sometimes, in a divorce, your spouse isn’t just a bad spouse—they’re a bad parent, too. If that’s your feeling about your spouse, you might want to name someone else as the guardian of your kids if something happens to you. For example, if your divorce is caused by your spouse’s substance abuse, they’re no who you would want as a guardian for your kids if you die. This will likely be a litigated issue that extends beyond estate planning. It’s very important to talk to a lawyer if this sounds like the situation you’re experiencing. 

Consider a Trust

If you don’t have a trust for your minor kids, that means that, if your ex is the kids’ guardian, he or she will have control over the kids’ finances until they reach majority (age 18). If you set up a revocable trust or a similar instrument, you can choose a trustee that isn’t your ex to control and access the money on your kids’ behalf if you die.

Life Insurance 

You might have an obligation to maintain your life insurance under the divorce agreement. Review this with your estate planning attorney to avoid litigation in the future.

Beneficiary Designations

Last but not least, don’t forget to take your ex-spouse off your retirement plan beneficiary designations. Your 401(k) or IRA designations should be consistent with the terms of the divorce agreement between you and your ex. 

The bottom line is that you need to include an estate planning attorney and maybe even a financial advisor, in addition to your divorce lawyer. Don’t let this estate planning update wait. Place it at the top of your priority list. Schedule an appointment with WFP today.

Well, it’s finally happening. It appears (knock on wood) that life is going back to normal after the COVID-19 epidemic. While there’s a good chance this disease won’t ever be fully eradicated, things are in control enough to allow places to open back up, even without masks. 

That is welcome news for small business owners, who have had it rough throughout the pandemic. Now that things are nearly back to semi-normal, are you prepared? Go through this checklist of paperwork for your business. Though not exhaustive, it will give you an idea of what you should have, as far as estate planning goes. 

The Basics 

A will and basic estate plan are a good place to start. A will talks about your wishes for what you want to have happen to your assets after you die. A power of attorney and healthcare directive, though both different, concern decision-making when you’re incapacitated. Without a last will and testament, the business will be divvied up according to your state’s laws. Having a plan in place ensures that someone you trust will inherit business property (or, at least, that your business’ fate will be what you want).

Tax Efficiencies 

A big part of estate planning involves tax laws. These laws are constantly changing, so you’ll be knocking on your lawyer’s and financial advisor’s door pretty regularly. Estate planning can help you legally minimize your tax burden. For example, you might be able to create a family limited partnership or divide your estate into several trusts as a way to minimize your burden. Even if you think that inheritance or estate taxes don’t apply to you, other considerations, related to your 401(k) are still at play. 

Family-Owned Company Issues 

Though family-owned businesses have their benefits, they also have their downsides. There are special concerns about keeping the business’ assets in the bloodline, and you don’t see these types of concerns when businesses aren’t family-owned. An estate planning attorney can help you quash fights and conflicts. Sometimes, having a third-party step in is exactly what FOBs need. Especially in today’s delicate, post-COVID times, you need to make sure you hit the ground running, not bogged down by familial drama.

Life Insurance 

One must-have for businesses is an owner with a life insurance policy. Usually, small business owners need to buy two life/disability policies: one that names their family as the beneficiary and one that names their business as the beneficiary. If you die, the policy will provide an income stream that will keep your company afloat in that difficult time.

Term life insurance covers you if your death occurs within a certain time frame, while whole life insurance, also known as permanent life insurance, is an investment, and it will remain in place for the duration of your life. You can add disability coverage separately or purchase it as a rider. 

Key person insurance works similarly to personal life insurance, but your company is the beneficiary, as opposed to a family member. If a “key person” in the business (generally the owner) becomes disabled or dies, the business will get a payout. Usually, the payout s equal to a multiple of the key person’s salary or the company’s profits. Key person insurance is often a lifesaver for mom-and-pop business, where the owner is critical to the day-to-day operations and success of the business. 

Succession Plan 

Of course, we can’t talk about estate planning for a business without discussing a succession plan. Your succession plan will delineate how your company and family will prepare for an ownership transition. The idea behind succession planning is simple: keep the business running until the new owner takes over or inherits the company. The written plan will contain how-to instructions and information about your business’ background, among other important details. 

Update When Needed 

Once you’ve gotten your business’ estate plan squared away and included all the documents you need to include, don’t just leave it and forget it ever existed. Update and review your estate plan every few years, and take a look at it again whenever you, your family, or your business experience a major life change. 

Contact an estate planning attorney today to review your current plan and ensure that it is comprehensive. As the country opens back up, remember that preparation is key.

The Fourth of July is here! Also called Independence Day, we celebrate this holiday as a way to celebrate America’s declaration of independence from Great Britain. The Declaration of Independence was adopted on July 4, 1776, and we haven’t looked back since. Though the British colonies took a little time to adjust, with the help of muskets and cannon-fire, they saw things America’s way. 

Centuries later, the Fourth is now a chance to let off fireworks, grill burgers and hot dogs on the barbecue, and spend time with family and friends under the red, white, and blue. It’s a shame life can’t always be fireworks and parties, and reality sets back in whenever the holiday is over. 

Planning for the Good Times

Though life can’t always be a party, there are some instances in your life where things will go really well. Marriages, new babies, and job changes are usually a cause to celebrate. Each one has its own ramifications, as far as estate planning goes. 

Marriage

When you’re a married couple, your responsibilities change, and that goes double if you have kids. Marital property is defined as the property you share with your spouse, that is jointly owned between the two of you. 

Example of marital property includes property that you bought with money earned during the marriage, property held by you and your spouse in certain legal structures, and gifts from family and friends that were meant to be shared between the two of you (wedding gifts are a common example of that). Active asset appreciation—the increase in value of marital property—is also on the list of marital property. Creating a prenuptial agreement, transferring shared property, and setting up trusts and wills are all things that you might need to do when setting up your married estate plan.

New Babies

With children comes even more responsibility. Naming a guardian for your kids is a worst-case scenario precaution. This would mean that both you and your spouse have passed away, and your children now are passing in custody to a relative or close friend. Talk to your proposed guardian before assigning them custody. You can update your will or other legal documents to reflect this change.

It’s also likely that you’ll want to name your kids as the main beneficiaries of you and your spouse’s estate. You can create trusts and other legal documents that will determine how their inheritance will be managed.

Job Changes

If job changes mean changes in income, 401(k), and insurance, those all might need to be reflected in your estate plan. A job change is usually a positive thing, assuming that it was of your own free will, but it doesn’t come without its considerations. Though not as major as a new spouse or new baby, you should still make sure that it is reflected in the plan.

And the Bad 

Obviously, the fun times don’t always last. That’s the beauty of life—there’s ups and downs, and, though the downs don’t really get easier, proper planning can make them more manageable. Sickness and death are two of the biggest “bad times” we can think of, and each come with their own part in your estate plan. 

Sickness

A power of attorney can help you through sickness. You appoint this trusted individual to ensure that your medical and/or financial decisions are taken care of, even if you’re too sick to handle them yourself. The PoA will pay bills, choose treatments, and manage your bank accounts until you’re back on your feet and able to handle those decisions yourself. 

A healthcare directive is also an important part of the decision-making process for when you’re incapacitated and unwell. If you’re too sick to communicate with doctors and nurses about your wishes, a directive will outline those. Usually, the decisions delineated in the directive pertain to end-of-life care or something equally as personal and serious. 

Death 

When you think of death, a last will and testament usually pops into your head. A will lays out where you want your assets to go after you die. Do you want them inherited, liquidated and used to pay off creditors, or something else? A trust is a way to pass assets on before you die, allowing those assets to avoid probate court. When thinking about your after-life asset transfer plan, talk to an estate planning attorney about what will be the most beneficial for your family.

Talk to a lawyer about your options for estate planning. Once you have a solid plan in place, you should update it every three to five years, or when you experience a major life change. Visit our website to learn more.