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San Francisco Estate & Family Law Blog

Divorce mediation, planning for future valuable during breakup

Negotiating a settlement as part of the dissolution of a marriage can seem like a confusing, unsettling, uphill battle. However, the divorce mediation process may help to make the process faster and less acrimonious. In addition, a couple of other tips may help people to protect their best interests once their divorces have been finalized in San Francisco.

First, researching options for health insurance right away may be a wise move for a spouse who is no longer covered by his or her now-ex-spouse's medical insurance plan. One option is to apply for COBRA. However, the coverage available through COBRA is temporary, so the spouse will ultimately have to search for his or her own policy.

Wise to include virtual currencies in estate planning

Cryptocurrencies are gaining increasing attention due to their high, yet constantly, evolving value. Those who have chosen to invest in these digital currencies in San Francisco may be excited about creating wealth with them. However, their virtual wealth my end up in unintended hands if they do not take estate planning seriously.

Unlike other types of investments, virtual currencies can easily be purchased on an exchange without the need for personal information. This is part of the appeal of cryptocurrencies: their secretive nature. However, the downside is that the potential heirs of cryptocurrency may not end up getting the funds if the cryptocurrency investor has not recorded details about the wealth properly.

The complications of same-sex divorce

It wasn’t easy – or legal – for same-sex couples in the entire United States to gain the right to marry until 2015. And now what many of these couples are finding out is that if they want to divorce, it’s not easy, either. Same-sex divorce is filled with complications related to asset division, child custody and spousal support, and these complications typically aren’t faced by heterosexual couples.

Heterosexual marriage has been part of our society for centuries. When such couples decide to divorce, lawyers and judges typically maneuver and deal with the break-ups with some ease and regularity. However, that’s not the case with same-sex divorces, because same-sex marriage has been around a relatively short time. In a way, the courts are finding themselves in uncharted territory with same-sex divorce.

Smart estate planning involves updating documents in 2018

With 2018 in full swing, now may be a wise time to look at an existing will if you live in San Francisco. Other estate planning documents are also important to go over and update. After all, the United States has a new tax law now, and new tax laws bring changes in the area of estate planning.

Asset owners would benefit from double-checking to make sure that their wills spell out their current wishes, not the wishes they had five or 10 years ago. For instance, perhaps a divorce has occurred within the past few years. Crossing an ex-spouse off of the beneficiary list and replacing him or her with another close family member is critical to make sure that one's assets end up in the proper hands.

How will community property play into my divorce mediation?

One of the fist questions people having during a divorce is, "Will I lose everything?" Despite how movies and TV shows might depict asset division, divorce mediation will not lead to one spouse receiving the vast majority of marital property. Divorcing couples in San Francisco can expect to receive a roughly equal portion of their marital assets.

California is a community property state, which can simplify division in the sense that both people know what they will receive -- approximately half of their community property and retain the separate property. Some assets such as retirement accounts earned before and duriing marriage can be mixed community and separate property. However, getting to that point, is not always so easy. Before asset division can even begin, all marital property must be identified and valued. This is customarily done by exchanging court required Preliminary Disclosure Documents stating each party's disclosure of both separate and community assets and debts and current income and expenses.  Failure to disclose is serious, and undisclosed assets and debts will not be distributed or divided.  The party failing to disclose may be subject to sanctions for non disclosure. 

For this reason, careful consultation with counsel during the disclosure process is usually recommended before or during mediation, especially when there is a possible mixed asset or debt.

I'm a beneficiary, can I start trust litigation?

Living trusts can play an important role in estate planning. Either revocable or non-revocable, these trusts are created during a San Francisco person's lifetime and can help avoid probate, making the time following his or her death less stressful. Unfortunately, not all living trusts are sound in nature, and trust litigation may be necessary.

A grantor -- the person who creates the trust -- must transfer property into the trust and establish a trustee. The trustee will manage the trust on the grantor's behalf, ensuring that property is properly managed and, if applicable, distributed after the grantor's death. It is possible to challenge these trusts, but a legal standing must first be established.

Do I need to create a QDRO during divorce mediation?

Qualified domestic relations orders are commonly used documents for divorcing San Francisco couples. These documents are typically used when dividing a marital retirement plan, and allows individuals to make withdrawals for the purpose of asset division without incurring related fees or penalties. Making withdrawals without a QDRO can be costly or may even lead to the wrong beneficiary of life insurance policies receiving funds. However, a federal appellate court recently determined that a man's divorce decree could be used in place of a QDRO, which could have certain implications for the future of divorce mediation.

The man finalized his divorce in 2006, and their divorce agreement outlined that both parties would continue to maintain their employer-based life insurance policies, which would benefit their daughter until age 18 or her high school graduation. The man's life insurance policy listed an uncle as the beneficiary at the time of his divorce. He never updated the named beneficiary, and died back in 2013.

Divorce mediation: Can my ex take my inheritance?

Inheritances are usually much more than just a chunk of change or some old furniture passed on after a person's death. To heirs, inheritances often have significant emotional and financial value and, for some, may be one of the few links a child has to a deceased parent. However, as San Francisco couples approach divorce mediation, some may begin to worry about how their inheritance will be handled.

For those who received an inheritance prior to saying "I do," they will usually not have to include it in asset division during divorce proceedings. Still, individuals should still take precautionary actions to protect their inheritance. Including it in a prenuptial agreement is a smart choice for many, and keeping it separate from community property -- including joint bank accounts -- can help preserve an inheritance's status as separate property.

On the need to update your will

If you are putting together your estate for the first time, then one of the first matters you should address is your will. Many people live most of their lives -- or even their entire lives -- without a will. In the absence of a will, a person's estate goes through the traditional probate process, and that can lead to many family members and beneficiaries losing out on critical assets that they may have deserved, or even been promised.

With a will, though, your last wishes are preserved and implemented by the administrator of your estate. The assets and property contained in your estate will be passed on to the appropriate family members, loved ones, and other beneficiaries and organizations that you designate.

How to challenge a trust and what to expect

It sounds like it could have come from the pages of a John Grisham novel. Rather than leaving a will, the deceased, your grandfather, created a trust. As it turned out, this trust specified just two beneficiaries for his considerable estate. Your grandfather left you—his only living relative—$100,000. However, his live-in housekeeper of the last two years is set to receive $4.75 million and controlling interest in his business.

Something doesn’t smell right and you decide that contesting the trust may well be your best course of action.