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Post Divorce Estate Planning

TYING UP LOOSE ENDS After the dissolution of a marriage, the last thing most people want to do is think about estate planning. With all the ups and downs associated with separation and divorce, it certainly is not a fun thing to plan for the distribution of property after one’s death. And yet, viewed from a different perspective, this fundamental life changing event can be a particularly good time to reflect on what is important to each of us and how we would like to be remembered by those who follow us. With some thoughtful preparation, recently divorced people can use the immediate post-divorce period to draft some basic estate planning documents consistent with their new legal status. The severing of the legal relationship between spouses has a major impact on estate planning. In Maryland, following a final divorce, the provisions made by the writer of a will regarding his or her former spouse are revoked by operation of law, unless there are alternative provisions in his or her will or there is language in the final divorce order to the contrary. While this affords us some measure of protection, as one might expect, relying solely on the legal default mechanism contained in the Estates and Trusts Article of the Maryland Code is likely not sufficient. Single people with minor children may have special concerns about the management of funds on behalf of their minor children. And as a general matter, because property is not exclusively passed through a will, it is essential to pay careful attention to titling of assets and forms designating beneficiaries for certain property such...

Estate Planning: Choosing Your Personal Representative

In thinking about those who are to receive our possessions after we pass from this earth, many of us weigh and balance this decision carefully. For example, it is not uncommon during the estate planning process for people to create extensive lists of their tangible personal property – including jewelry, tools, art, furniture, and other important items – and designate specific items to many different individuals. It is also not uncommon to name various individuals or charities to receive sums of money specified in a will. While deciding how to distribute our property is a key decision in preparing a will, it is equally important to think through the choice of a personal representative. A personal representative, who may also be called an executor, is the individual who is responsible for paying the final bills and taxes of the decedent, distributing the property of the decedent in accordance with his or her wishes, and generally interfacing with appropriate governmental agencies to ensure that all the business affairs of the decedent are conducted appropriately. It is important to remember that a personal representative is a type of fiduciary. When acting as a fiduciary a special relationship is established. One party places trust, confidence, and reliance in another. A fiduciary has a duty to act for the benefit of the party who nominated or appointed him or her. In the context of estate planning, at its most basic, a personal representative must be able to account for every dollar that flows into the estate and every dollar that flows out of the estate. The goal of the personal representative is to...

The Legal Divorce

No matter how long spouses have lived apart, no matter what the financial arrangement between spouses is, and no matter if spouses interact with one another or lead completely separate lives, a married couple cannot be legally divorced without an order from a court. At a minimum, to obtain a legal divorce, one spouse must initiate a divorce action by filing a complaint in court alleging specific facts to meet certain statutory requirements and must subsequently prove his or her case before a judicial official. While a legal divorce requires certain action by the court, the manner in which divorce litigation proceeds is greatly influenced by the behavior of the parties. Most people seek an “amicable” divorce, but the legal way of framing this procedure is either as a “contested” or an “uncontested” divorce. Interestingly, the overwhelming majority of family law cases settle before a judge has to make a decision. In cases with protracted litigation, a judge’s decision may be the only way a case can resolve. With this in mind, it is important to understand how the “emotional divorce” and the “financial divorce” affect the “legal divorce.” The likelihood of a procedurally simple legal divorce is greatly enhanced if parties make the effort to work through emotional and financial issues ahead of a formal filing with the court. In particular, a comprehensive and clearly written marital settlement agreement that is reached by the parties can serve as a map to remind the parties of their obligations to one another and to their children. While it may be confusing to enter the realm of contracts and courts, depending...

The Financial Divorce

Generally speaking, there are three interrelated aspects of divorce: the emotional divorce, the financial divorce, and the legal divorce. While each phase of the divorce process has its distinct characteristics, for many people it is usually the financial aspect of divorce that provokes the greatest anxiety. Transitioning from one household of composed of two adults to two households composed of one adult in each household can be a major undertaking that may require a new evaluation of income and expenses, along with an overview of assets and liabilities. This anxiety is typically enhanced when children are involved in the re-organization of the family. It is not unusual for people to panic when facing this situation. While panic may be an understandable reaction to the prospect of divorce, cool and calm collection of information while facing a new financial situation is an effective way to reduce anxiety and prepare for a new living situation. To the extent possible, it is a good idea to become a bookkeeper and become well informed about recurring monthly expenses. Many people simply do not know with great precision where they spend their money or how to budget effectively. To become more aware of spending habits, it is very useful to do something as simple as keeping receipts in an envelope each month for each and every item that is purchased (including coffees at Starbucks!). In this way, an accurate picture can emerge. Similarly, it is important to know sources of income which can typically be determined by reviewing pay stubs, tax returns, or attachments to a tax returns such as a W-2 form or...

The Emotional Divorce

At the start of the new year it is common for many of us to face the challenge of an unknown future while reflecting on our experiences of the past.  This is especially true as we contemplate our choices about the structure of our families.  For most people, the decision to remain in a marriage or to disengage from a marital relationship is a radical change that may promote serious anxiety.  To address the anxiety that comes from this uncertainty, I have found it useful to consider three intertwined yet distinct aspects of divorce: the emotional divorce, the financial divorce, and the legal divorce. As I have come to understand it, an emotional divorce occurs when a spouse truly realizes that there is nothing more that can be done to ameliorate the unhappiness that he or she feels in relation to the marriage.  This unhappiness can be manifested in many ways: constant bickering, stony silences, or eruptions in physical violence.  Typically, at the root of this unhappiness is a profound difference in basic values held by each spouse.  An emotional divorce often – although not always – precedes a financial and legal divorce which I will discuss in future newsletter articles. Thinking about the signs of a healthy relationship may be useful in determining whether or not a spouse believes an emotional divorce is either happening or has occurred.  Here is a brief– and non-exhaustive – list of some elements that mental health professionals suggest are signs of a healthy relationship between spouses: Sensitivity to the feelings of the spouse; Respect for the spouse’s opinions and values; Acceptance of...

The Presidential Debates: Legal Lessons Learned

With the beginning of fall, we see that the days are growing shorter and that we are all collectively counting down until our elections finally take place.  Along with the millions of words written in all sorts of media, on the evening of September 26, we were able to observe both the Democratic and Republican presidential nominees confront each other in real time without much filtering from either their campaign organizations or the media.  Just the two of them – Hillary and Donald – plain and simple.  I watched with fascination – not only to learn more about the candidates – but to see what I could glean to enhance my law practice. The split TV screen allowed viewers to see the differences between the candidates.  I was struck with the calm and cool expressions on Hillary’s face in comparison to the highly animated and agitated expressions on Donald’s.  It seemed as if every time Donald was challenged – either by Hillary or occasionally by moderator Lester Holt – you could see his discomfort.  His anxiety appeared also to be apparent with his frequent head shaking, wiggling eyebrows, and incessant sniffing and gulping of water.  In contrast, when Donald spoke, Hillary’s face remained smooth and unruffled.   She did not interrupt his commentary, although he often interrupted her. In lieu of eye rolls when Donald made some patently false assertions (quite notably about the issue of “stop and frisk” as an effective and legal police tool to reduce crime), Hillary did smile, but she did not appear to me to be particularly frustrated. How does all of this relate to...