Kansas & Missouri Estate Planning

Helping Your Elderly Divorced Parents

Divorce is simply not a young person issue. In fact, boomers struggling to help their elderly divorced parents are starting to offer evidence that there are issues and unpleasant surprises awaiting those families who have not planned ahead.

The evidence has been slowly coming in for a while, of course, but recent articles have helped to publicly put the pieces together for us. For example, consider a recent article in Reuters titled "Double the trouble when divorced parents get old."

In broad strokes, marriage is and has been an important institution for us. Not only does it order our daily lives, but it organizes our longtime finances as well. On the other hand, divorced persons simply have to plan that much more for their own old age, especially when it comes to the question of living alone and perhaps shouldering medical care by yourself.

More often than not, this actually is an issue for the adult children of divorced parents. After all, it's already an era that calls for more and more care from children, but taking care of Mom and Dad is an entirely different concept when they are no longer together or there for each other.

Takeaway: for divorced individuals, this is simply something more to consider in your planning for the future, and for families this is a necessary issue to address.

Reference: Reuters (October 22, 2012) "Double the trouble when divorced parents get old"

Potential Postnuptial Possibilities

Marriage is, in very real sense, a contract to be together for life, through thick and thin. Hopefully, that's not a difficult choice. But what about all of the other "stuff" that can get in the way of such plans?

The stuff that can throw a monkey wrench into a marriage include things like children from a prior marriage, separate assets and estate plans, and, yes, even inheritances. So, even if you did not work out agreements regarding such stuff before exchanging vow, there's always a potential cure after the fact. Enter the postnuptial agreement.

According to recent studies and a article in Private Wealth titled "Postnuptial Agreements On Rise, Lawyers Say," you may never have considered a postnup, but an increasing number of people have and are. Across various incomes, married couples have found them to be valuable tools. There are many reasons to support this trend, even between spouses who otherwise would not ordinarily commit such agreements to paper.

Then again, even if you not a newlywed, you may want to ensure even your children make the best of themselves and their future inheritances. Accordingly, postnuptial agreements can provide a practical pre-condition for an heir and spouse to adopt as part or your estate planning.

Reference: Private Wealth (September 12, 2012) "Postnuptial Agreements On Rise, Lawyers Say"

Are Prenuptial Agreements in Vogue?

Regardless of who you are, what you do, who your loved ones are, and what you own, planning for your family and for your assets is a necessary and ongoing activity. Estate planning is a process, not an event.

What if you and your family situation happen to be a little more complicated than most? This is especially significant as more people are getting married later in life, or for a second or third time. As a result, they have more income, assets, and obligations when they arrive at the altar. So it is no surprise that prenuptial or premarital agreements are becoming a more frequent topic of discussion among to-be-weds.

The recent murmurs about prenuptial agreements come like most financial news these days, by way of Facebook's newlywed Mark Zuckerberg. A recent article in CBS MoneyWatch titled, "Why Mark Zuckerberg needs a prenup," makes the case for his need for a prenuptial agreement.

Bottom line: Zuckerberg and his millions (or whatever his net worth is today) aside, the prenuptial agreement has its place in an era of mixed families, divorces, remarriages, and all the other increasingly common family structures today.

Reference: CBS MoneyWatch (May 19, 2012) "Why Mark Zuckerberg needs a prenup"

Trusts – Better Robust Than Bust!

 

Trusts are like pocket knives, in a way. Even a fairly basic pocket knife can make your life immensely easier, especially in a pinch, but a particularly well built and expansive pocket knife is an actual survival tool. So it is with trusts.

When it comes to trusts, however, why settle for a basic trust when a robust trust can provide essential protection for your loved ones?

An article in this month's issue of Financial Planning Magazine contained a lesson in the robust set of provisions that can be crafted into a single trust. In addition, this article illustrates the difficult space between divorce and the trust (and that's one more area where a robust trust can make all the difference).

Depending on how you've structured it, a trust can last for varying lengths of time and offer the beneficiary/child various ways of accessing those funds. For example, you might use the trust to teach lessons, but don't forget that you're not always planning for the budding child... but also the future adult. Unfortunately, that future adult may have creditors who could attempt an attack on the trust funds.

More likely, however, a divorce and an ex-spouse will come into play, perhaps also children and child-support. How the courts treat your trust depends on numerous factors best considered at its formation and they certainly are worthy of your consideration before it's too late.

For more ideas (and at least one promising court case) read the original article. In the end, as with so many planning devices, everything hinges entirely on you, your family, and your unique circumstances.

Reference: Financial Planning Magazine (February 1, 2012) "Trust, But Verify"