Changes in tax law that were passed at the end of 2017 resulted in a large number of people attempting to finalize their divorces before these laws became effective at the beginning of January, 2019. One substantial change is that under these new tax laws, alimony is no longer deductible by the payor and is no longer taxable for the receiver. These changes have had a substantial impact on both sides of alimony payments following a divorce. There are also, however, a number of other changes that people performing estate planning following a divorce should consider. The following reviews some of the most important changes in the law that will impact your estate planning and your divorce.
Updating Health Care Power of Attorney
A healthcare power of attorney document allows a person to appoint another person to make healthcare decisions for him or her in case of a coma or other incapacity. If you want to avoid having your former spouse make these types of decisions on your behalf, you need to accurately update your estate planning documents to reflect these changes. You should make sure that you still have a power of attorney document, however. In many cases, people find it appropriate to create a power of attorney appointing a friend or relative to make healthcare and financial decisions in case the individual becomes incapacitated.
Properly Revise Your Trust and Will
Following a divorce, it is often critical to revise your trust and will to remove your former spouse if he or she is listed as an executor or trustee of your estate. This is assuming that you do not want your former spouse to receive any assets after you die, which while often true, is not always so.
Reconsider Guardianship for Minor Children
One of the most complicated estate planning issues faced by recently divorced couples is how to determine who will take care of minor children in case one of the parents becomes incapacitated. In the case of many divorcees, a former spouse will be appointed custodian of the minor children unless the court determines that the individual is unfit. When a former spouse has a substance abuse problem or has committed acts of domestic violence, it is often critical to appoint someone else who can take care of minor children.
Create a Trust for Minor Children
If you have not created a trust for minor children and a former spouse is the children’s guardian, he or she will have control over the children’s finances until they reach the age of 18. Many divorcees do not want a former spouse having this type of control over the lives of the children. For this reason, it is often a wise idea to consider creating a revocable trust to control the funds received by your children. `
Speak with an Experienced Estate Planning Lawyer Today
No matter if you are facing a divorce or navigating any other type of issue in your life, it is critical to make sure that your estate planning documents are adequately updated. It can be helpful to obtain the assistance of an experienced estate planning lawyer. Attorney Jim A. Lyon has substantial experience helping people navigate the estate planning process. Contact attorney Lyon today to schedule an initial free consultation.