After your divorce is finalized one more legal step needs to be taken: your will and trust after divorce. Newly divorced women (and men) should have their wills, trusts, and powers of attorney rewritten. The new documents should reflect your new life. You will want to provide for your children while ensuring that your ex does not receive any assets. And, you will want to ensure a trusted friend or family member is in charge of ensuring that your wishes are fulfilled.
There are several reasons to prioritize a new will and trust after divorce. First, it ensures that you decide who receives your assets and under what circumstances. If you do not have a will and trust, Illinois law determines who receives your property. This is done through probate, and it’s expensive. So, if your assets go to probate, it will cost you because the state will take court costs and attorneys’ fees out of your assets.
Second, a will and trust allows you to decide who will have guardianship over your children, along with who will oversee the finances on your children’s behalf when they are minors and young adults. Without a will and trust, a judge will decide who will be the guardian of your children, and again, this would be done via probate, which means more money. The bottom line is, having a will and trust after divorce allows you to plan for an efficient and cost-effective administration of your estate.
What is the difference between a will and a trust?
People tend to use the terms “will” and “trust” interchangeably. However, they are very different legal documents. A will is a document that contains the directions as to how your estate will be administered. It does not become effective until after your death. If you only have a will, your heirs may need to go through probate court to administer your estate.
A trust, on the other hand, is a separate legal entity and its purpose is to own property for the benefit of others who are called trust beneficiaries. A trust can own property. Assets that are owned by the trust to avoid probate. Transferring your assets into a trust takes the probate process out of the equation so that the transfer of assets from one generation to another is more efficient.
A trust also centralizes your assets enabling the successor trustee to more easily step in and manage your finances in the event of incapacity. Please keep in mind that when establishing a trust, a will is still required. It is a simple pour over will, which names guardians and executors and directs that all property transfer to the trust upon death.
One of the hurdles to establishing these documents may be all the confusing terminology. Here are some of the terms you might see when researching estate plans:
Trustee of Revocable Trust: Individual or company that administers a trust upon incapacity or death.
Guardian: Individual who has physical custody of a minor child.
Trustee of Children’s Trust: Individual or company who administers the finances of a child or young adult. The trustee of the children’s trust can make payments to the guardian. The trustee of the children’s trust can be the same person as the guardian or a different person.
Withholding Provisions: Language in the Children’s Trust that dictates how long the children’s funds must remain in trust and under the control of the trustee. Common language is for children to receive 50% of their inheritance at age 25 and then the remainder at age 30.
Power of Attorney for Property: The person who can make financial decisions in the event of incapacity.
Power of Attorney for Health Care: The person who can make health care decisions in the event of incapacity.
Establishing a will and trust after divorce can feel like a confusing and complicated process. I am here to help. I will take the time to explain the different options and decisions newly divorced individuals need to consider. I also want to mention that obtaining a new will and trust after divorce is a fixed cost. In other words, unlike your divorce attorney, I will talk with you for however long you need, and it won’t cost you anything beyond that fixed fee. My goal is to make this final legal step a positive experience, so that you can exhale, and have peace of mind that your wishes will be carried out.
Prior to establishing Emily Rozwadowski Law, LLC, Emily served as managing partner of Spencer & Rozwadowski, LLP. Emily handled all estate planning matters for the firm for over twelve years before venturing out on her own. She also gained extensive estate planning experience while working as an associate at Wolf & Tennant in Chicago. In addition to her law practice, Emily is an adjunct professor at Purdue University Global where she teaches students working toward a bachelor’s degree in Legal Studies.
Emily received her bachelor’s degree from the University of Wisconsin-Madison. She majored in journalism and wrote for the Daily Cardinal. Emily received her Juris Doctor degree from Loyola University Chicago. While at Loyola she was the news editor of the Public Interest Law Reporter and was a member of the Loyola negotiation team.
Emily is a member of the Illinois State Bar Association, Lake County Bar Association, and several other business and women’s networking groups. She lives in Highland Park with her husband and two sons. When not practicing law or teaching, Emily loves to attend concerts, read a good book, and try new restaurants with her family and friends.
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