When Alabama families think about finding an attorney to help them with their estate plan, their first instinct is usually to contact an estate planning attorney. At first, this might seem like a fine idea, especially since estate planning lawyers have considerable experience with wills, trusts, powers of attorney, etc. However, some estate planning lawyers have only limited family law experience, which could prove an issue. Because family law and estate planning intersect in so many surprising ways, a family law attorney in Alabama may be able to offer unique guidance during the estate planning process. Here’s how.
Understanding How an Estate Plan Is Threatened by Divorce
A family law attorney understands the potential consequences of divorce better than most. Although divorce can affect many aspects of financial well-being, it can be particularly threatening for beneficiaries. For example, an ex-wife or ex-husband may attempt to access funds never meant for them, something a family law attorney may be able to address.
Additionally, some estate planning tools offer excellent protection against divorce. For example, family law attorneys frequently prepare prenuptial agreements for their clients. A prenuptial agreement, often called a “prenup,” is a contract between two people created before they get married. It typically lists each person’s assets and liabilities and outlines how they will be handled should the couple divorce later.
A prenup may also address the respective spouses’ inheritance rights upon the other spouse’s death. A prenuptial agreement might explicitly state, for example, that a spouse will never have access to any trust or inheritance left behind by their ex.
On the other hand, certain types of trusts are inherently protective against the negative consequences of divorce, and a family law attorney can offer guidance in this regard. If someone chooses to create a trust as part of their estate plan, selecting the right trustee could help avoid inheritance falling into the wrong hands. A responsible trustee will not allow a spouse to access funds designated for another beneficiary, especially if you grant that trustee considerable decision-making power. Another obvious step is to make a trust irrevocable to provide more permanent, reliable protection from divorce.
Spendthrift trusts could also prove beneficial in this situation. Married couples might approach a family law attorney to discuss what would happen if one of their children divorced. In this scenario, estate planning and family law attorneys often recommend spendthrift provisions.
A spendthrift trust facilitates gradual disbursements instead of a single, lump-sum payment. This can prevent your adult child’s ex from gaining access to the family wealth, for example. A “drip-feed” system provides your adult children financial support without allowing an ex to intercept the funds.
Some families are particularly concerned about protecting the rights and futures of their special needs or disabled children. When adult children require additional protection, consulting an attorney about setting up the correct type of trust and choosing the right trustee is especially important. A family law attorney can advise regarding the rights and responsibilities parents have concerning special needs or disabled children even after the children reach the age of majority.
Finally, a family law attorney could offer critical insights into the tax implications of divorce and estate planning. Mitigating certain taxes is a high priority for those approaching their estate plans in Alabama, especially high-net-worth families. However, estate planners should also factor in the tax implications of a potential divorce, as this might complicate existing estate plans.
For example, income from a trust could become a factor during property division, child support, and alimony calculations during an Alabama divorce. A spouse might be a stay-at-home parent with no work history. Under normal circumstances, this spouse might expect to receive alimony, child support, and a significant portion of the marital estate.
But what happens if this spouse draws a considerable income from a trust fund? How might this affect support and property division calculations? On paper, this spouse may seem less financially vulnerable than they appear at first glance and is yet another example of an estate planning issue that a family law attorney can help with.
Addressing Powers of Attorney and Healthcare Proxies in an Estate Plan
Another considerable issue is the possibility of incapacitation during the marriage. This subject is difficult for many spouses to think about, but it is an important part of estate planning. In many cases, people choose their spouses to make medical decisions on their behalf if they become incapacitated. Perhaps the most obvious example is whether to remove a spouse from life support if they fall into a comatose or vegetative state.
While choosing your spouse for this difficult role might be the obvious choice when you’re married, what happens if you divorce? Suddenly, you face a situation where a bitter ex controls whether you live or die, which most people would agree is not ideal. Family law attorneys can address these difficult questions.
Even if a couple is happily married today, there is no telling what the future might bring. A family lawyer might be able to help spouses choose more appropriate options for healthcare proxies and powers of attorney. And for those who have already decided to divorce, a family law attorney can assist you in revoking prior powers of attorney or healthcare directives and walk you through the process of updating those documents.
Keeping Children Safe With an Estate Plan if the Unthinkable Happens
Family law attorneys may offer unique insights regarding the children if both parents should die. Guardianship of children should be an important part of any estate plan, assuming the children are still minors. While an estate planning attorney may only think in terms of numbers and tax consequences, a family law attorney may be more likely to take a more humane approach.
Parents can work with family law attorneys to select family members or friends to take guardianship of the children if they pass away. Lawyers can help parents choose the most suitable candidates while creating a plan for there to be enough financial support for childcare needs.
Estate Planning for Blended Families
Blended families often struggle with some of the most complex estate planning issues. They often include children from both the current relationship or marriage and the parties’ prior relationships or marriages, making it potentially difficult to determine inheritance in these situations.
There are also considerable tax implications for blended families, and certain estate planning tools may prove less effective due to the complex factors surrounding the children in these families. How to approach this in the manner most beneficial to your situation is something worth discussing in more detail with a family law attorney.
How to Find a Family Law Attorney in Alabama to Help With Estate Planning
Both family law and estate planning depend heavily on every family’s unique needs. Online research and tools only provide vague guidance and lack human insight. At Summit Family Law, our team of family law attorneys has extensive experience addressing estate planning issues as they pertain to family law matters. We can do the same for you. Call us at our Huntsville or Birmingham offices today or schedule a consultation.
