5 Ways to Update Your Estate Plan After a "Gray" Divorce

Deciding to end a marriage as an older adult is increasingly common. If your marriage ended later in life, you could be part of the “gray” divorce trend.

AARP reports that Baby Boomers, those born between 1946 and 1964, are the generation with the highest divorce rates. Divorce among older adults in the United States has been on the rise since 1990. By 2019, 36 percent of divorces involved people 50 and older.

The demographic trend of individuals 50 and older ending their marriages is known as gray divorce. Gray divorce reflects societal changes. Today, divorce has less stigma. As women have gained more financial agency, they initiate 70 percent of divorces, per Psychology Today.

Additional factors contribute to divorce among older people. Because Boomers experienced more significant social pressure to marry, they tended to marry younger before becoming financially stable. While divorce rates decline with length of marriage for younger generations, older adults are increasingly choosing to end long marriages. Compared to other generations, they more often leave marriages of 10 years or more.

Gray Divorce Impacts Finances, Retirement

Gray divorce can affect your finances and plans for retirement and long-term care. Whether you have spent years building a family with someone and have raised children together, or this is your second marriage, divorce can present financial as well as personal challenges. Age-related complications of divorce can include retiring, managing a chronic condition, or supporting an adult child’s education.

According to AARP, the standard of living declines for both men and women who divorce over 50. However, the financial toll is greater for women. Women, on average, experience a 45 percent decline in standard of living compared to 21 percent for men.

Older people have less time to recover from the financial effects of divorce and rebuild their nest eggs. As a result, the dissolution of a marriage can be more costly for older individuals.

Changing Your Estate Plan After Divorce

The end of a marriage often changes your desires and expectations for retirement, as well as long-term care and estate planning. After a gray divorce, it’s a good idea to take steps to update your estate plan.

Here are five ways to modify your estate plan after divorcing later in life.

1. Change Beneficiaries

Most people select their spouse as a beneficiary for accounts and insurance. This can include the following:

• Retirement accounts, such as 401(k) plans and IRAs
• Payable on death (POD) bank accounts
• Life insurance policies
• Annuities with death benefits
• Investment accounts

Sometimes, divorce settlements require keeping a former spouse as a beneficiary. However, most people do not want their former spouse as a beneficiary.

Some states, such as Illinois, have laws that automatically revoke ex-spouses as beneficiaries. In most cases, you’ll need to change the beneficiary on your accounts and policies. Otherwise, your former spouse could receive your funds after you pass away.

To remove your ex-spouse as a beneficiary, you’ll need to go through each account or plan and update the beneficiary. For instance, you could change the beneficiary of your life insurance policy to your children or another family member, such as a sibling. To be thorough, review and update every account or policy that you hold.

Because payable-on-death accounts and insurance policies transfer outside probate or wills, you’ll need to revise your beneficiaries even if you change your will.

2. Create a New Will

When making a will, it is common to name one’s spouse as the primary beneficiary. If you already have a will leaving property to your spouse and want to change it, you’ll need to create a new will. You can name new beneficiaries, such as children, other family members, and friends.

Most attorneys will recommend creating a new will rather than attempting to revise an old one. Revisions are less likely to hold up in court.

3. Execute New Power of Attorney

In addition to your will, another important estate planning document to review is your power of attorney. Power of attorney documents allow you to name someone else as a surrogate decision-maker. This person can act on your behalf if you can no longer make decisions for yourself, such as if you are seriously ill in the hospital.

Two main types of power of attorney (POA) exist. A POA for property concerns financial matters; a POA for health care (or health care proxy) involves medical decisions.

Many divorced people no longer wish for their ex-spouses to be able to make decisions for them. If you have a power of attorney designating your former partner as your agent, you can create a new power of attorney naming a different individual, such as one of your adult children or another family member. Typically, the new power of attorney document states that you have revoked all previous powers of attorney. The revocation renders your old power of attorney invalid.

Consider notifying people of the change. When you change your power of attorney for health care, you should inform your health care providers and give them a copy of the new form. This way, they have the most current document on file. Also, consider informing your bank when you change your power of attorney for property and provide them with a copy of the new document.

4. Begin Estate Planning

Many people delay estate planning. According to Caring.com’s 2024 Wills and Estate Planning study, two-thirds of people do not have a will or any estate planning document. If you have not yet started estate planning, divorce presents an opportunity to think about what matters to you and create a plan for your future.

When you work with an estate planning attorney, you can develop an estate plan that suits your needs. Strategies such as trusts can help you avoid probate, making the process of wealth transfer easier for your family. A will makes sure your loved ones know what you’d like them to have.

Hospitals often turn to the spouse as a surrogate decision-maker. As mentioned above, divorced people can benefit from creating powers of attorney that name specific individuals to make decisions. Having a power of attorney that designates someone you trust can ensure you retain autonomy if your health declines.

When you work with an estate planning attorney, you can also discuss strategies to afford long-term care, such as purchasing long-term care insurance or applying for public benefits.

5. Plan for Long-Term Care

Divorce may have changed your expectations for retirement. Since the end of a union can take a financial toll, you may need to create a new plan to ensure you remain comfortable and can afford care as you age. Reflecting on where you would like to live as you grow older and what kind of care you might need can help you develop a plan.

People plan for long-term care in a variety of ways, such as the following:

• Investing in long-term care insurance
• Buying an annuity, which provides retirement income
• Moving into accessible housing or downsizing
• Choosing an assisted living facility or senior housing option
• Hiring a home health aide or housekeeper
• Creating a Medicaid Asset Protection Trust

Speak to Your Estate Planning Attorney

Whether you are making changes to an estate plan or creating one for the first time, your attorney can provide support. In addition to drafting a will and power of attorney, they can offer advice on navigating retirement and planning for long-term care. 

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

   

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

Securely Storing Your Legal Documents

Among your key estate planning documents are your will, living wills, powers of attorney, and medical directives. Securing these somewhere your survivors can easily access them is crucial. Consider storing other information, like birth certificates, marriage licenses, and medical records, in a secure spot as well.

Different Document Storage Solutions

Many people today are striving to become as paperless as possible. They may choose to store their data on memory sticks or an external hard drive. Others use online data storage services that keep this information in the cloud so that they can share files securely with loved ones.

Many still prefer maintaining paper records. Whatever form your documents are in, you can store copies in your home or a safe deposit box.

How you choose to store your relevant data depends on the amount of labor and time you are willing to invest. Going paperless is generally safe and convenient, and relatively easy if you've already scanned and saved your printed documents. Many people already have their information in a digital format.

Access to Digital Assets

Don't forget about your digital assets, such as your social media, email, online storefront, and smartphone passwords. From frequent flier miles to Netflix subscriptions, you want to keep these in accessible files for your survivors, too.

Digital documents require giving a trusted person access to online accounts to pay bills and close accounts. Your executor, trustee, or agent should be able to access this information in emergencies and after your death.

Scanning Your Digital Information

Some of your organizing will likely include creating digital copies of tangible documents. These might include your Social Security card, passport, and driver's license.

Scanning these documents doesn’t make them a legal copy. However, it will be easier to replace lost or stolen documents if you have a copy available. It also puts the information in an easily accessible format. That way, your loved ones will not have to rummage through your home to find the document.

Of course, keeping original documents in a fireproof safe or a bank deposit box is never a bad idea.

Organizing and Storing Your Estate Planning Documents and Other Important Files

You may not be comfortable using digital devices. Ask someone in your family to help you set up your digital file system and show you the basics. If you like, your documents can travel with you wherever you go, and you can also share this information with others.

Online file storage possibilities are many, but the most popular options include:

• Microsoft OneDrive
• Google Drive
• Apple iCloud

These services already offer free limited storage in the cloud; for additional storage capacity, you can purchase an upgrade.

If you prefer storing documents locally on a physical storage device, you must have a backup plan (or plans!). For example, your computer settings allow you to schedule backups automatically. Look for your system backup and restore options.

If you’re unsure, you can always ask a loved one or Google how to locate your computer settings for these features. Remember to run your backups regularly to keep your information up to date.

You can also purchase an external USB hard drive for file backups. Look for a 1- or 2-terabyte drive that can house all of your information and updates quickly. Smaller USB memory sticks also work, though you'll likely find they have limited space. Memory sticks might be enough for your needs and transport easily if you travel and want to keep your most important information on hand.

With any of these backup methods, you should have an extra drive to store identical information. Consider keeping this in a fireproof safe or a bank safe-deposit box.

Safely storing your financial and other valuable personal data is often a combination of these methods. For your loved one to access financial records, they will require:

• Usernames
• Passwords
• Social Security numbers
• Account numbers
• Online account URLs

Feel unsure about your ability to organize and safely store this critical data? Talk with an accountant or trusted advisor. They may be able to help you create a system before you go about copying or scanning your records.

Various digital storage systems and services are at your disposal, too. The mobile app Mind Your Loved Ones (MYLO) is one service that offers secure storage for your electronic files. It allows you to store critical medical information, health care directives, and other essential legal documents on your smartphone. With it, you can send information directly to health care providers, insurance companies, or trusted friends or family members.

MYLO gives you the option to do this via email, text, fax, or print. Storage is not cloud-based; the app stores your information locally on your tablet or smartphone for enhanced security.

Everplans is another available option, which you can start organizing and storing some key information for free. The premium plan charges a yearly fee, giving you access to a wider range of supports.

Whichever service you use, do your research first.

Help From Your Estate Planning Attorney

Estate plans and priorities change over the years. This is why it’s important to update your information every few years and after significant life events. Ensure that your executors, trustees, and agents will be able to find your information quickly when they need to do so. Consult your estate planning attorney to work with you on this.

They can provide checklists and other resources to assist with organizing and storing your legal documents. Have them do a thorough review of your assets and records and identify anything that might be missing.

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

   

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

Undue Hardship and the Medicare Penalty Period

If you are planning to apply for Medicare, you might not realize that you should think twice before transferring any of your assets.

If you transfer assets within five years of applying for Medicare, you could in fact face a penalty period. During this time, you would not be eligible for Medicare benefits. An exception does exist, however, if enforcing the penalty period could cause you, the applicant, an "undue hardship."

This exception is difficult to prove and rarely granted, but it may be possible in certain circumstances.

When You Apply for Medicare

A state Medicare agency must determine whether an applicant has transferred any assets for less than fair market value within the past five years. If any such transfers occurred, the state imposes a penalty period, as mentioned above. This is a timeframe during which the applicant would not be able to qualify for Medicare benefits.

Medicare applicants can fight this penalty if they can show that it would cause them significant difficulty or expense. Federal law provides that an undue hardship exists if the penalty period would deprive the applicant of the following:

1. medical care necessary to maintain the applicant's health or life or
    

2. food, clothing, shelter, or necessities of life.
    

The burden is on the applicant to prove that hardship exists. A nursing home can also pursue a hardship waiver on behalf of a resident.

Proving an undue hardship can prove difficult. The Medicare applicant needs to show that they can't afford nursing home care during the penalty period. They also need to demonstrate that without nursing home care, their health will decline.

In addition, states are free to define "hardship" as they see fit. Courts also vary on how they enforce the hardship exception.

For example, one 2014 appeals court in New York ruled that an undue hardship exception applied. It came to this conclusion even though the nursing home did not attempt to evict the applicant because she was insolvent. (In addition, no other nursing home would accept her.)

On the other hand, another case from 2013 out of New Jersey ruled differently. There, the appeals court considered a Medicare applicant whose son had transferred the applicant's assets to himself. The court ruled that the applicant in fact did not qualify for the undue hardship exception. It reasoned that the applicant had not proven that his health or life were in danger.

Consult With Your Elder Law Attorney

If you are thinking about applying for Medicare, work with your elder law attorney. They will have the expertise to help you navigate the application process. They may even be able to identify other public assistance programs for which you may qualify. At the same time, they can support you in arguing that you will face undue hardship.

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

   

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Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

40% of People Say They Don't Have Enough to Make a Will

Four in 10 people believe they do not have enough assets to make a will, according to Caring.com’s 2024 Wills and Estate Planning Study, which surveyed more than 2,400 individuals.

This statistic reflects a common misconception about estate planning: that it is only for the wealthy.

In reality, estate planning can benefit people across the economic spectrum. Involving more than passing on wealth, estate planning also encompasses planning for aging, illnesses, or injuries, which can be unpredictable. Estate planning allows individuals to make crucial decisions, such as who will care for their children if they pass away or what kind of care they would prefer to receive in their later years.

What Is a Will, and Why Do I Need One?

A will stands among the most basic of estate planning documents. In a will, you can specify who receives your possessions upon your death. This could include friends, family members, nonprofit organizations, or other entities. Having a valid will in place can help your loved ones avoid potential arguments over your assets, such as real estate or any items you had of sentimental value.

In this legal document, you also name someone to follow the instructions you have outlined. If you have minor children, you can appoint someone you trust as their guardian in your will. Likewise, you may put plans in place in your will for your pets should you pass away.

Keep in mind that you should update your will and the rest of your estate plan when significant changes happen in your life. For example, you may have recently welcomed a new grandchild, moved to a new state, or filed for divorce.

More People Are Saying They Do Not Have Enough Assets

The Caring.com annual survey sheds light on Americans’ views about estate planning, highlighting the misconceptions that may delay or prevent them from planning.

From 2022 to 2024, the proportion of people saying they lack adequate resources to execute a will rose by 21 percent.

Compared with respondents with higher incomes, those with lower incomes were twice as likely to report not having enough assets to make a will.

People with less education were also more likely to cite insufficient assets. Forty-three percent of respondents with a high school diploma or less education said they did not have a will because they did not have enough to leave anyone.

Few Americans Have a Will

Interestingly, 64 percent of people surveyed said having a will is very or somewhat important.

Despite this, only 32 percent have a will as of 2024 — a 6 percent decrease from 2023. In 2024, 14 percent more adults also indicated a lack of assets as a reason for not having a plan.

The Impact of Inflation

Increasing prices of goods and necessities have placed financial strain on households. Inflation has therefore shaped views on estate planning as well.

Some see rising inflation as a motivator for planning, while others see it as reducing the need for an estate plan because it magnifies their lack of financial resources.

• One in five people saw a greater need for estate planning because inflation made them worry about their loved ones’ financial futures.
• Nine percent said they believe there is less need for estate planning because inflation reduced the value of their assets.
• Eight percent said they do not need a will because they have sold their assets to combat inflation.
• Black Americans were the most likely to say inflation had affected their views of estate planning in a positive way.

Reasons for Estate Planning

While some never intend to create an estate plan, others delay planning, waiting for certain life events to take place.

Approximately one in four Americans report that nothing would prompt them to get a will. Forty-three percent cited procrastination as the reason for not making a will.

Many Americans wait for medical diagnoses, major purchases, retirement, or family changes before they start estate planning.

• Forty-three percent of people surveyed said they would make a will after a serious medical diagnosis or health concern.
• About a quarter of people indicated they would start estate planning after purchasing a home or retiring.
• Seventeen percent said that the death of a loved one would motivate them to start planning.
• Fifteen percent said they would make an estate plan if it were part of an employer benefit.

While many people wait for a motivator to start estate planning, it can be challenging to predict when an illness, injury, death, or significant life change may occur. Being proactive and creating an estate plan in advance of life events can offer a layer of protection.

Work With Your Estate Planning Attorney

Even if you think you do not have enough assets to make a will, there are many benefits to having an estate plan. Your estate planning attorney can support you in creating a plan for the future that addresses your needs. They also can help you prepare advance directives such as powers of attorney, appoint a guardian for your minor children, and plan for long-term care.

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

   

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com

 

A Useless Power of Attorney: Avoid Free Legal Documents

A power of attorney designates a trusted individual to make decisions or conduct transactions on your behalf. They could be related to personal finances, business operations, or medical needs and used for a single immediate purpose or an ongoing situation.

This may sound pretty straightforward. You might be tempted to download a free form to take care of it when looking for services online. But will that be enough to ensure the document is legally recognized, important matters are handled quickly, and your specific instructions are followed?

Understanding Powers of Attorney

Implementing Power of Attorney (POA) documents is an integral part of your estate planning process. All states recognize powers of attorney, but rules and requirements will differ from state to state. The POA document gives one or more individuals the legal authority to act as your agent on your behalf.

Depending on which POA you choose, you may limit the agent's power to a particular activity. This might include things like real estate sales or broader applications.

A power of attorney may give permanent or temporary authority to the agent you appoint. You can set the POA up to invoke immediately. Or, you can have it activate when a future event, such as a physical disability, occurs. The latter is a "springing" power of attorney.

Other types of powers of attorney include limited, durable, and general POAs.

For example, a general POA permits the agent to deal with any matters on your behalf that state law allows. Under such an agreement, the agent may sign checks, handle bank accounts, sell property, manage assets, and file taxes when you are unable. This POA has a wide latitude of authority. Therefore, there needs to be coordination between you and your agent to ensure your best interests are always represented.

The better-known powers of attorney are durable and take effect if you are incapacitated. The word "durable" means the powers will remain intact even when you can no longer manage your affairs. There are two types of durable POAs; one handles financial matters, and the other manages medical affairs, often called a health care directive.

You also may rescind powers of attorney. However, most states will require written notice of revocation to the named individual or entity.

Consider the following scenarios, when free, online powers of attorney don't prove as helpful as you may have hoped.

Financial Power of Attorney

Suppose a business colleague wants you to take care of their business operations. You become responsible for making critical decisions while they are out of the country.

They give you POA by using a free online legal document that promises to contain everything you need to comply with state law. The document seems noticeably concise. You wonder why legal documents need to be so lengthy and expensive in the first place.

When you go to your friend’s bank to transfer funds, the bank denies you access. You discover why: The bank requires different forms and rules for a power of attorney. Your friend had no knowledge of these requirements, and now you won't able to contact them for several weeks.

When you track them down, they must fill out additional forms with the bank and get them notarized before you attempt any more transactions. The legal document failed.

Health Care or Medical Power of Attorney

You receive a call about a good friend who has suffered a head injury and needs urgent nursing home care. He is looking at long-term care costs between $5,000 and $8,000 a month for rehabilitation. However, you know he lives on a fixed income of only $2,500 a month from Social Security. Medicare doesn’t cover long-term care services, and his income is too high to qualify for assistance from Medicaid.

On top of facing a financial crisis, someone needs to make decisions about the level and cost of care he can afford. Your friend doesn’t have the capacity to make them in his current situation.

You know what he has expressed in the past about specific treatments and efforts to prolong his life. You even witnessed the online form he used for a health care power of attorney.

However, his family members contest the document. Meanwhile, the doctors won’t listen to you without more specific advanced health care directives and a signed HIPAA release form. Another legal document failure.

The Dangers of Free Online Documents

How can online documents be legally approved for use by the public but insufficient when you need to use them? The POA documents that you may have believed would prove helpful in the scenarios above only offered general information for the most basic needs. With so many variables in finances, business, and medical situations, the language is often not specific enough to address the unique problem.

When you get a POA through an estate planning firm, each document contains wording regarding several circumstances and refers to other critical documents, like living wills and trusts. Additional details instruct the person you've chosen to act on your behalf when dealing with decisions regarding banking and medical institutions or personnel. For example, it may permit them to set up another trust, reorganize assets, open and close banking or investment accounts, and require health care professionals to comply with your medical wishes.

Connect With Your Estate Planning Attorney

A free online power of attorney could cost you valuable time, money, and frustration. Many other legal considerations determine how your power of attorney will work.

The best way to establish powers of attorney is to work with your estate planning attorney. They can go over common pitfalls and discuss options on how to avoid them. They also understand the criteria for identifying the individuals or agents to represent your interests.

When you rely on legal documents to get an important job done or simplify decisions in an emergency, it needs to work as promised. Consult with your estate planner to ensure you are prepared to handle any situation. The biggest benefit of having these matters settled before you have passed away or become unable to handle your affairs is allowing your family to care or grieve for you instead of being caught up in logistics.

Contact us

Questions? Contact us at Elise Lampert, Attorney at Law

   

Elise Lampert, Esq.

Law Office of Elise Lampert

9595 Wilshire Blvd. | Suite 900 | Beverly Hills , CA 90212

Phone: (818) 905-0601 / Email: elise@elampertlaw.com

https://www.eliselampert.com