According to prominent Pennsylvania estate planning attorney, Philip Levin, no matter the size of your estate, it is always worth planning for, and especially when emerging from a separation or divorce when your assets and standard of living can often times decrease. The reality is that after the marital estate has been divided in a divorce, spo
uses can have significantly less to work with than what they had when they were married.
How can they protect and maximize what they bring with them in a divorce mediation settlement, and also be able to adequately provide for their family who they may still be responsible for supporting after the divorce, should they die unexpectedly? To be sure, planning for a new financial life is not an easy thing to do on your own and Mr. Levin strongly advises divorcing individuals to consult with an estate planning attorney to review, revise and update your estate plan.
Meanwhile, as you emerge from your divorce, ask yourself:
Is Your Estate Plan Up-To-Date?
You can answer the following 6 fundamental questions about your estate to determine if your estate plan needs updating:
1. Have You Executed a Will or a Trust? Without having a will or a trust, you are relying on the Pennsylvania legislature (through the laws of intestacy) to determine how your assets will get distributed in the event of your death. Intestacy is the most costly and time-consuming method of passing your assets to your loved ones, and more importantly, may not carry out what your intent might have been regarding your assets.
2. If You Have Signed a Will or Trust, Has It Been Reviewed in the Last 2 Years? This is especially important after a divorce. Some spouses are so focused on getting their divorce that they forget to have their will or trust updated after the divorce becomes final. If they leave their ex-spouse as a beneficiary, this can cause an unjust disposition of their estate, and one they did not intend. Also, tax laws are always changing which may have an adverse effect on your estate if it is not reviewed consistently.
3. Are All Your Beneficiaries Over Age 18 and Financially Responsible? Under Pennsylvania law, children can inherit property at age 18 without restriction. Proper planning is crucial to preventing a younger beneficiary from squandering their inheritance, or losing it to creditors or predators.
4. Does Your Current Plan Provide Your Family With Asset Protection, Divorce Protection, and Lawsuit Protection? Assets are most commonly passed on to designated beneficiaries through an outright distribution under a will. However, once the inheritance is received, it can be claimed by one or more current or future creditors of your beneficiaries. You can provide protections for your loved ones by placing the assets beyond the reach of their creditors, including your son or daughter's ex-spouses, in the event of a divorce.
5. If You Have a Child From a Previous Marriage, Does Your Will Ensure That Your Child is Not Disinherited, in the Event That You Die Before Your Spouse? Second marriages present unique planning issues, especially if one or both spouses have one or more children from a prior marriage. Proper estate planning is critical to prevent undesired results, including the possibility of disinheriting your children.
6. Have You Prepared For the Cost of Nursing Home Care? The average cost of nursing home care in Pennsylvania now exceeds $78,000 per year, and the cost of long-term care is one of the fastest growing expenses. If your estate plan fails to take these costs into consideration, a stay in a nursing home may consume all or a significant portion of your assets.
Needless to say, the issues raised in these six questions only scratch the surface of all the complex issues involved in maintaining an effective, air-tight estate plan. This is why it is crucial to consult with a competent estate planning professional who can advise you on how you can best protect your assets and provide for your family most efficiently, and in the manner that you intend.
Philip Levin, with The Levin Law Firm, is a trust and estate planning attorney with over 30 years of experience. Mr. Levin is exclusively dedicated to helping his clients develop comprehensive estate plans designed to protect, preserve and pass property in tact, to the right people, at the proper time, and in a most tax-efficient manner. To learn more about his practice, you can visit his website at: www.levinlawyer.com.
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