We Really Can Learn Something from the Kardashians
If you watch TV, look at the magazines in the checkout of the grocery store or just live in America, you are probably (painfully) aware of the Kardashians, the family that is famous for being famous. Khloe Kardashian, the third daughter, is married to Lamar Odom. Lamar Odom is currently in a coma in Las Vegas. So, what can we learn from this, other than don't take drugs?
Despite a long, televised break up, Khloe and Lamar are still legally married. (They signed divorce papers in July, but the California courts are so backed up the divorce hasn’t been finalized.) This means she has all the rights of any spouse and is apparently making the decisions regarding his health care. Is this what he would want? Maybe. His two children are minors and his mother passed away when he was twelve. His grandmother who raised him is also deceased. So, this may be the best choice for him.
However, most of us would not want our estranged spouse making medical or financial decisions for us. We also would not our estranged spouse to receive our property at our death. There are steps you can take to avoid this.
First, after consulting your attorney, terminate any joint accounts. Assets held as joint tenants with rights of survivorship automatically pass to the surviving owner(s) if one owner dies.
Next, amend your will and/or trust agreement or sign a new one. Most people will want to delete any gifts to a spouse and remove the spouse as executor and trustee. Some people choose to leave the spouse as the trustee for any minor children. This will depend on the situation. If you want to protect your estate as much as possible, create and fund a "living trust." A living trust is a revocable trust agreement that becomes irrevocable at death and generally replaces a will. If assets are in your name at death and pass under your will, your spouse can "renounce" your will and take one-third of your probate estate. A spouse cannot renounce a trust agreement.
Third, review your beneficiary designations on all assets, particularly life insurance and retirement plans. If you named your spouse, change the beneficiary. If you have any employer sponsored plans, such as a 401(k), you will not be able to name a beneficiary other than your spouse without your spouse's consent. For these plans, make sure to change the beneficiaries as soon as the divorce is final.
Fourth, sign health care documents and a power of attorney for property. Health care documents should include a power of attorney at a minimum. A health care power of attorney allows your agent to make decisions for you up to, and including, the termination of life support (if you authorize termination). It is broader than a living will which addresses only the issue of life support.
If you do not have a health care power of attorney, a guardian of the person, who is appointed by the court, can make medical decisions for you. If you do not have a power of attorney or a guardian, the Illinois Health Care Surrogate Act. provides that certain people have priority in making your medical decisions. They are: (1) the patient's spouse; (2) any adult son or daughter of the patient; (3) either parent of the patient; (4) any adult brother or sister of the patient; (5) any adult grandchild of the patient; (6) a close friend of the patient; (7) the patient's guardian of the estate.
A HIPAA (Health Insurance Portability and Accountability Act) authorization works with the medical power of attorney. It allows medical providers to release otherwise confidential information. If you have an authorization naming an estranged spouse, you will likely want to revoke it.
A power of attorney for property covers financial matters. Every adult should have a property power of attorney, as there is no such thing as a "property surrogate act." One spouse cannot simply transfer the property of the other. A power of attorney and/or a trust agreement will generally address any issues. If not, a guardian of the estate will need to be appointed by the court.
As mentioned above, every adult should have powers of attorney, whether single, happily married, going through a divorce or otherwise. They can be particularly important for couples who are not married. If a couple is not married, one partner can only make medical decisions for the other as a "close friend" who comes after adult children, parents, adult siblings, etc.
The bottom line is that you need to update or create your estate planning documents when you are faced with a major life change. This includes divorce, but also includes marriage, the birth of a child, the death of a family member, etc. If not, you could be at the mercy of someone you are divorcing, a former partner or an estranged family member.