How to Manage your Estate when Divorcing with Children
Manage your Estate when Divorcing with Children Attorney Ocean and Monmouth County
Read on to learn more about things to consider when you are estate planning while undergoing a divorce and children are involved.
Getting a divorce isn’t an easy process for anyone. Amid the legal and financial navigation that must be done, there is the mental and emotional upheaval that such a transition takes on the individual. Add that equation to children’s presence in such a major life change, and the results can be completely overwhelming. Managing your estate and the division of assets in a divorce is a high-impact process, and as such, having the support of a skilled and experienced estate planning attorney at this time is crucial to your personal and financial wellbeing. It also helps you rest assured that your financial wellbeing is secured while you focus on moving forward with your children.
Carefully consider your beneficiaries.
In this time of vast transition that you are undergoing, it is important to seek an estate planning attorney’s advice so that your decisions at this crucial fork in the road are of the highest integrity. One mistake many newly single divorcees make is that they name their young children as their outright beneficiaries when removing their spouse as their main beneficiary. Why is this a bad idea? Well, it’s more than just a bad idea. It’s actually illegal. Young children are not legally allowed to own assets. In the case that a child is named inheritor of estate property, it must be overseen by what is called a guardian of assets. This person is usually appointed by the court to be the surviving parent. That means that in the case that you die, the other will be responsible for carefully guarding the children’s inheritance. Can they be trusted to do so? In many cases, a divorce is not an amicable one. Even in the case that it is, one may not ensure that the surviving parent would properly care for the young child’s inheritance until they are old enough to receive it. Consider this carefully. Consider what a child – or a recent adult, at age 18 – would do with the inheritance. If you provide an outright inheritance and the surviving parent does properly care for it, the young adult may not.
The way to navigate this scenario if you do want to name your children as beneficiaries of your estate assets is to name a trust for your children as your beneficiary – not them directly. This keeps both your assets and your children’s decision-making capacities safe. While it does require initial fees to set up a trust, the benefits far outweigh the costs, as you maintain a great deal of control in what happens to the inheritance and when.
For example, who has access to the trust is closely protected. Specifically, your ex cannot gain access to the funds. Additionally, you name the trustee who will carry out your specific legal instructions. And, the assets within the trust can remain in it for the entirety of your children’s lifetimes; it doesn’t need to be withdrawn at the time you have named that your children have access to it.
Another reason a skilled estate planning attorney will confirm that it is not a wise idea to directly name your children as inheritors of any assets during the course of your divorce is that, depending upon the circumstances of your child’s life, the inheritance may not go to them in the way it was intended to. This is protected in the case of trust. For example, if your adult child is married, they may decide to name their spouse as a joint beneficiary. This means that, in the case of a divorce, because the inheritance is now a marital asset, the spouse would be entitled to a full half of the inheritance.
It is always wise to set up an estate trust for your children when you divorce.
If you want to maintain control of the assets you intend for your children, whether they are children or adults, an estate trust is a clear choice. It allows you to control who the trustee is and specifically how your assets will be divided among your children. Additionally, you can control the timeline, meaning that your children may not have access to the entirety of their inheritance at age 18. Finally, you choose what relationship your ex has with the trust, which may be none.
Retain an Experienced Monmouth County Estate Planning Attorney Today
At Peter J. Bronzino, Esq, our estate planning attorneys support clients in Brick, Sea Girt, Asbury Park, Wall, Manasquan, Neptune, Spring Lake, Brielle, and more all estate planning matters, especially during the important transitional time of divorce.
To meet with a firm member for a confidential consultation regarding your concern, please contact our Brick, NJ offices by calling (732) 812-3102 today for a free and confidential consultation.