OWM NEWSLETTER
AUGUST 2014

ATTORNEY SPOTLIGHT

REBECCA A. HOBBS

Rebecca A. Hobbs, Esq., is an associate attorney with the law firm O’Donnell, Weiss & Mattei, P.C. Ms. Hobbs focuses her practice in elder law, special needs planning, estate planning, estate and trust administration, and Veteran’s benefits.  Ms. Hobbs is accredited as a United States Veterans Administration Attorney. She is also a member of the National Academy of Elder Law Attorneys (NAELA) and the Pennsylvania Association of Elder Law Attorneys (PAELA). She is an active member of the Montgomery County Bar Association and the Pennsylvania Bar Association (PBA). She serves on the PBA Charitable Organizations Committee and the PBA Legal Services to Persons with Disabilities Committee. She is also a graduate of the Tri-County Chamber of Commerce Leadership Class of 2013-2014. As an elder law attorney Ms. Hobbs is able to provide exceptional legal guidance while also understanding the sensitivity and compassion needed for assisting families in a time of crisis. Ms. Hobbs resides in Phoenixville with her husband and two children.

Phone: 610-323-2800
Fax: 610-323-2845
Email: rhobbs@owmlaw.com

 

VICTORIA S. HOLLISTER

Victoria S. Hollister, Esq., is an associate attorney with OWM Law, concentrating her practice in all areas of Family Law.

Ms. Hollister is a graduate of Penn State University and Temple University School of Law. She is a member of the PA, Montgomery County and Berks County Bar Associations.

Ms. Hollister is the mother of three daughters and resides in Berks County.

Phone: 610-323-2800
Fax: 610-718-1365
Email: vhollister@owmlaw.com


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The material in this publication was created as of the date set forth above and is based on laws, court decisions, administrative rulings and congressional materials that existed at that time, and should not be construed as legal advice or legal opinions on specific facts. The information in this publication is not intended to create, and the transmission and receipt of it does not constitute, a lawyer-client relationship.

Estate Planning After Divorce

Estate planning is an essential step in the divorce process. Careful attention must be afforded to the complex issues that may arise when dealing with an estate plan where a divorce action is pending or has been finalized. Your estate plan should be reviewed and updated after the initial filing of the divorce complaint as well as after the final decree of divorce has been entered.

In order to have a framework for discussing divorce estate planning, it is important to discuss generally how the divorce process works in PA. For the purpose of estate planning, it is important to know when “grounds” have been established for a divorce. Reaching this stage of the proceeding will invalidate the provisions for your spouse in your will as well as automatically changing some beneficiary designations. To establish grounds in a no-fault divorce, both parties must agree that the marriage is “irretrievably broken” and 1) ninety (90) days from the date the divorce complaint is filed has elapsed and both parties have filed affidavits of consent to the divorce; or 2) the parties have been separated at least two years, one party files the necessary affidavit and the other party doesn’t object to the divorce being finalized.

When someone divorces in Pennsylvania, there are statutory provisions for ex-spouses named in estate planning documents. Generally, there are three estate planning documents: (1) Last Will and Testament; (2) Financial Power of Attorney; and (3) Health Care Power of Attorney with a Living Will. Additionally, whenever discussing an estate plan, your non-probate assets which contain a beneficiary designation must also be reviewed.

Powers of Attorney and Advance Directives:

Upon the filing of a divorce proceeding, the designations of your spouse as your agent under your Financial and Health Care Powers of Attorney are revoked unless it clearly appears from the document that the designation was intended to continue to be effective notwithstanding the filing of an action in divorce. However, if you named a successor agent after your spouse, the successor agent will be able to step in.

Last Will and Testament:

Upon grounds for divorce being established, any provisions in your Last Will and Testament favoring your ex-spouse are invalidated. This can become a tricky area where there is a potential for minors to inherit from your estate. Careful drafting techniques must be used to create a testamentary trust or inter-vivos trust for the benefit of the minors.

Should you pass away in the interim period where a divorce is pending but grounds have not been established, and you have not changed your will, your spouse will still inherit your estate. In Pennsylvania you can disinherit your spouse; however, your spouse can claim a one-third elective share against your estate.

Other areas your will should address after divorce include appointment of a guardian. It is important to clearly state your reasons for believing whether your ex-spouse is the appropriate guardian for your minor children. Although this nomination may not be controlling if your ex-spouse is still living, the court will take your wishes into consideration.

Beneficiary Designations:

Any designation of a spouse as a beneficiary of a life insurance policy, annuity contract, or other contractual agreement, such as an IRA, becomes ineffective upon divorce in Pennsylvania or if the owner died during divorce proceedings after grounds for divorce have been established.

Employer-sponsored benefits are treated differently. Most plans are controlled by Employee Retirement Income Security Act (“ERISA”), a federal law. With an ERISA controlled plan, the beneficiary designation will control, regardless of the stage of your divorce proceedings or the terms of your divorce agreement. Furthermore, if the employee is married at the time of his death, his spouse will receive 50% of the money, regardless of what the beneficiary designation says. If someone else is the named beneficiary, the beneficiary will receive 50% and the spouse will receive 50%. A spouse always receives 50% of an ERISA-governed account unless that spouse has completed a Spousal Waiver and another person or entity (such as an estate or trust) is named as the beneficiary. There are only limited exceptions to this rule. ERISA also controls most employer-sponsored life insurance plans.

Estate Planning Checklist for Divorce:

  • Review all estate planning documents, including your Will,
    Powers of Attorney, Trusts, and any Advance Directive/Living Will;
  • Create a minor’s trust if you have minor children who will inherit
    from your estate;
  • Review all beneficiary designations;
  • Review your designation for successor custodian/trustee of your
    children’s college savings plans and custodial accounts; and
  • Verify guardianship for your children is included in your Last Will
    and Testament.

To schedule a consultation to update your estate plan or to review your divorce documents, please call Rebecca Hobbs, Esq. or Victoria S. Hollister, Esq. at 610-323-2800 or email us at rhobbs@owmlaw.com or vhollister@owmlaw.com. Also, please watch OWM’s August 2014 Legal Talk Program regarding Estate Planning After Divorce on our website here.


Upcoming Events

OWM Law sponsoring First Friday celebration in Phoenixville on 9/5/14 and 10/3/14.

Kathleen M. Martin, Esq., and Rebecca A. Hobbs, Esq., speaking at Chestnut Knoll, 1041 E. Philadelphia Ave., Gilbertsville, PA, on 9/25/14 regarding VA benefits (contact Jodie Daniels at jdaniels@chestnutknoll.com or at 610-473-8066).

David A. Megay, Esq., speaking at Chester County Night School Seminars (6:30p.m.-8:30p.m.) at Owen J. Roberts High School, Pottstown, PA, on 9/24/14 entitled "Starting Your Own Business" and on 10/29/14 entitled "Buying and Selling Real Estate in PA" (contact Chester County Night School at 610-692-1964 or online at www.chestercountynightschool.org).

Kathleen M. Martin, Esq., speaking at Chester County Night School Seminars at West Chester at Henderson High School, West Chester, PA on 10/1/14 and at Owen J. Roberts High School, Pottstown, PA on 10/15/14 entitled "Elder Law Issues," and at Owen J. Roberts High School, Pottstown, PA on 10/29/14 entitled "Beyond the Simple Will"(contact Chester County Night School at 610-692-1964 or online at www.chestercountynightschool.org).

David A. Megay, Esq. speaking at a SCORE Business Planning Seminar on 10/30/14 at 7:00 p.m., at New York Plaza, Suite 102, 244 High St., Pottstown, PA (contact SCORE at 610-327-2673).

Watch Legal Talk, brought to you by OWM, on PCTV, Tuesdays at 8:30 on Channel 28, and Thursdays at 9:30 p.m. on Channel 98, or on our website here.

Read Legal Ease every first and third Sunday in the Pottstown Mercury and on our website here.

O'Donnell,Weiss & Mattei, P.C.

41 E. High Street
Pottstown, PA 19464
610-323-2800
Fax: 610-323-2845

347 Bridge Street, Suite 200
Phoenixville, PA 19460
610-917-9347
Fax: 610-917-9348

www.owmlaw.com