There are times I wish my client’s story was not so sad. The client comes in, and they had just been served with divorce papers and they were in treatment for cancer. They were not calling their soon-to-be ex a jerk, so I won’t either. Apparently, the marriage had been on the rocks for a while.
My client was optimistic about their prognosis, but there was a chance that they could die before the divorce was final. My client did not want their half of the community property to go to the soon-to-be ex; they wanted everything to go to their child from and their children with the soon-to-be ex.
Unfortunately, part of a divorce are ATROS. ATROS are Automatic Temporary Restraining Orders. Among the things automatically prohibited are transferring assets or changing beneficiaries. This means that even though they could sign a Trust, the Trust would be empty.
If you have been to one of my online workshops, you have heard me explain that a Trust works like a wagon; the person in charge (trustee) can only manage the toys in the wagon (assets in the Trust). My client had a problem. The solution was for me to contact the divorce lawyer. The divorce attorneys were able to agree and each of the divorcing spouses were able to create their own Trusts so that if either of them were to die their assets would go to whom they wanted. The best part of this is they are slowing the divorce process so that my client can wait until their treatment is over to change insurance.
If you are getting a divorce, you might want to think about estate planning.
