Legal Documents You Should Share With Your Family

When you pass away certain information dies with you, such as where you keep your legal documents and what the contents of those documents are. Keep in mind written documents matter: The basis of our lives is run by contracts. But if those contracts cannot be found your wishes and desires could be confounded. Here are some suggestions regarding sharing and not sharing certain legal documents:

 

Prenuptial and Postnuptial Agreements should always, always, ALWAYS be shared with multiple family members. These are not recorded anywhere, so if you and your soon-to-be-ex-spouse mysteriously lose your copies you need to contact your former attorneys. And remember: Attorneys in New York only have an obligation to hold onto legal work product for seven years, so they may not have copies (and they too may accidentally lose their copy before seven years).

 

Health Care Proxies should always be shared with your Health Care Agent so he or she knows his or her responsibilities and the person will also have the opportunity to tell you if he or she doesn’t want the obligation. Remember that this is potentially a long-term unpaid job that is emotionally draining and labor intensive.

 

Deciding whether to share your Last Will and Testament is a bit more difficult and depends on your family members’ demeanors. If you intend to give uneven distributions to your family, or even disown certain members entirely, you likely don’t want to use your Will to achieve this end, as you should instead use trusts and TOD accounts to accomplish this. The big issue with a Will is that it evokes feelings of need and greed, and once the “cat is out of the bag” you can’t stuff him back in.

 

If you have left a Trust to an individual you should share the document with both your trustees and all of the beneficiaries, as well as the account information of assets owned by the trust, and make sure to do so before you die (or leave instructions with your attorney to send the information). All too often I get calls from prospective clients claiming they are beneficiaries to a Trust, but don’t have a copy of it or don’t know what it owns. Much like a Prenup, Trusts are not recorded anywhere, so if they are lost or the trustee and the beneficiaries have a falling-out there are potential conflicts that seem to inure against the beneficiary’s interests.

 

As a rule, I suggest you NOT share information on your net worth, the nature of your assets, copies of your statements, etc. with your family. Leave this information with your attorney instead. Alternatively, leave a list of who your trusted advisors are (attorney, accountant, financial advisor). This will allow you to leave a “Treasure Map” without having to disclose what your assets (the “Treasure”) are at that point.

 

 

 

DISCLAIMER: Attorney Advertising. Please note that prior results do not guarantee a similar outcome. This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

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What and When Should I Tell My Kids?

Parents who have gone through the estate planning process typically ask what information they should share with their children and when. The answer requires balancing many factors, but can be boiled down to a simple concept: Take responsibility and own up to your decisions, and don’t leave it to your kids to fight about it.

First, if a child has been left out of a Will or is receiving less money than other siblings you may want to tell them so, and why. Clearly this is not a universal approach, but taking responsibility and informing them up-front allows the child to reconcile this fact. This will also help minimize your other children having to deal with the dispossessed child’s bitterness in the future, or feel as though they have to resolve it by giving their sibling some of the bequest you have left to them. While this does give the child time to plan a legal offensive, you (as the person with the money) have many more weapons at your disposal, such as trusts and accounts that avoid the publicity associated with Probate. Of course, you should NOT inform them there is a secret trust you have created to dispossess them. If there is open acrimony between that child and his or her siblings let the other siblings know your plans.

Next, if you have named a child as your health care proxy or power of attorney you should inform them of this when you believe they are responsible enough to handle your health and financial needs. You should also let the child who has not been named know. If you are about to have invasive surgery or are diagnosed with a terminal illness you should inform them if they are your living agents and give them copies of your power of attorney and health care proxy, and you will want to tell them where your Will is located.

I suggest never talking about estate planning matters with minors; the topic is a bit too grim for them to stomach. Conversely, if your parents are your designated agents you should let them know immediately.

Lastly, let your children know your attorney’s contact information. This will allow them to contact your attorney when you are in need of him or her.

 

 

DISCLAIMER: Attorney Advertising. Please note that prior results do not guarantee a similar outcome. This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.

Your Prenup: How Your Family Law Attorney Betrayed You

If you have a prenuptial agreement, chances are that the family law attorney who represented you betrayed you and didn’t even realize it.

 

I often tell clients to get a prenup if they are getting married later in life, and insist my older clients pay for their child’s prenup. And soon thereafter, much to my dismay, I see yet another prenup that unintentionally-yet-completely screws my client if his or her spouse dies unexpectedly.

 

Prenups serve one vital purpose: “Split Money.” There is usually a financial disparity between the parties when the couple marries, so the wealthier spouse naturally wants to protect his or her money from the other spouse’s financial grasp after a short marriage. So the prenup says who gets what if the marriage ends quickly. This makes sense since many marriages fail within 5 years, often leaving the couple with somewhat different financial circumstances than when they entered.

 

But what if a spouse dies unexpectedly, especially early in the marriage? Many family law attorneys automatically enter a second non-necessary aspect into the prenup regarding “Death Money” that denies the surviving spouse any of his or her spouse’s property without a Will (under “Intestacy”), an automatic spousal right to 1/3 of the deceased-spouse’s property (the “Right of Election”), and even minor-yet-important property such as the deceased spouse’s car, personal property, or small sums of cash in a bank account (known as “Exempt Property”). Basically, your matrimonial attorney just ensured you get nothing if you are in a happy marriage but unexpectedly and tragically lose your spouse.

 

Many family law attorneys insist a prenup must deal with both Split Money and post-mortem property. They claim that all that needs to be done is add a statement to the prenup ensuring an unexpected death will not invalidated the remaining spouse’s estate rights, or that they can include a clause stating the couple may draft a Will or Trust to supersede the prenup. And my response is “Be real guys: You rarely include an unexpected death clause in your prenups, and almost never tell your clients to draft a Will or change beneficiary forms after you get paid your retainer.”

 

Let’s face facts: A family law attorney is there to protect you if your spouse chooses to leave you, whereas an estate attorney is there to assist you if the unexpected occurs; one should not try to fill the other person’s role. By the time a loving couple has finished the decidedly-unromantic and taxing discussions regarding a prenup they usually have no strength left to update a Will or beneficiary forms until they have a child. Unexpected death can happen at any time, and now the prenup denies the breathed spouse of all the deceased spouse’s property. Do yourself a favor and educate your family law attorney to not automatically add a Death Money clause in your prenup.

 

 

DISCLAIMER: Attorney Advertising. Please note that prior results do not guarantee a similar outcome. This site and any information contained herein are intended for informational purposes only and should not be construed as legal advice. Seek competent legal counsel for advice on any legal matter.