At some point when I was in law school, I had a realization.
No matter the state of the economy – and how good or bad things may be – someone is getting rich somewhere.
I studied historical economic markets. Someone, somewhere, is always making money on a rising stock (or, in the case of a short sell, a falling stock). Some business is always performing swiftly. There were people who amassed large fortunes even in the Great Depression.
(Speaking of the Great Depression, and in the spirit of continuing to include interesting recipes on this blog (even though it’s a law blog), I found this recipe for Depression Cake online. Depression Cake was a common dessert during the Great Depression; most recipes do not use sugar, milk, or eggs, because they were scarce and expensive during the Great Depression. Anyway, try it out. Who knows? With the economic climate these days, it may become popular again.)
I also read cases – and saw a glimpse of the amount of litigation there is in the country.
Where Party A and Party B are separate entities in a given set of economic circumstances, three outcomes are possible: 1.) A wins, B loses.
2.) B wins, A loses.
3.) C – the assortment of attorneys for Parties A and B – wins.
Even among attorneys, however, the effects of economic collapse are felt. Presently, I know a lot of lawyers who are actually not faring so well right now. Many are out of work, and most others have seen their practices want for business. Additionally, a recent American Bar Association survey indicates that 69% of attorneys in the United States report that they will be negatively impacted by the recession – with a whopping 19% expecting to lose their jobs entirely.
Nonetheless, in the decaying fields of economic downturn, there are patches to be found where the grass is greener.
The American Bar Association puts out a monthly publication known as the ABA Journal. This month’s issue (billed on the cover as a “SPECIAL RECESSION ISSUE”) features a piece about Eleanor Breitel Alter, who heads up her law firm’s family and matrimonial law department (in other – more relevant –
words, she’s a divorce lawyer).
While bankers and lawyers and others pinch pennies, Ms. Alter finds her divorce practice to be doing just fine, thank you. “Moneyed spouses” whose jobs and/or stock have “gone to the devil” – as Ms. Alter puts it – are flocking to get divorced – when they might otherwise have waited – in an attempt to limit a court’s determination of their earning power. Additionally, people who are already divorced are bombarding Ms. Alter’s office with requests to get a permanent divorce order or separation agreement changed – in light of the economically bleak times.
Aside from the intellectually droll revelry to be had in observing Ms. Alter’s circumstances (i.e., a successful divorce attorney whose surname is a homonym for the sacred table at which her clients once wed) (get it?), it is clear from the article that, as the economy changes, people are making changes in their own lives that impact their assets and their families.
This leads me, albeit somewhat circuitously, to the topic of estate planning.
Anytime you marry, remarry, divorce, annul, or otherwise change your marital status, your estate plan may be dramatically impacted.
For starters (and I am going to type in all caps now to emphasize the drama of this point): MARRIAGE ALMOST ALWAYS VOIDS YOUR WILL.
When you marry, with rare exception, any will that you have becomes null and void. Once this happens, you need a new will unless you want your estate plan to be governed by intestacy.
Intestacy is a fancy lawyer word for “the government gets to decide who gets your stuff, regardless of your wishes.” Many, many trees have been killed in publishing the complex laws that dictate how an estate is distributed in intestacy. And regardless of how it turns out, the lawyer (“C”) will definitely win.
(Intestacy can be especially distasteful when a person dies with no next-of-kin remaining. If this happens in Massachusetts, for example, the deceased’s property goes to the state government.)
Intestacy, quite obviously, is usually a bad idea. The advice I would typically give to a client is to pony up the dough to fix up a will now so that his/her loved ones don’t have to deal with a probably more complex (and probably more expensive) probate process later.
Divorce does not a void a will, but it does treat the divorced spouse as being already dead. This means that, when a court interprets your will, they will totally ignore anything that mentions the spouse you divorced. This probably seems like a good thing.
The problem arises, however, when alternative arrangements are not made. Let’s look at a basic example. Jack has a simple will that leaves everything to his wife, Jill, and names Jill as his executrix. A year later, Jack and Jill divorce. Several years after that, Jack dies – without ever having updated his estate plan. Now, the court will distribute all of Jack’s property will be via intestacy. Additionally, because no executor/executrix has been appointed (remember that Jill is treated as predeceased!), probate may be delayed because of the process of appointing an appropriate administrator for Jack’s estate. Time is money, and probate delays can be costly. This is not a good thing (except for “C”).
With rising divorce rates among society’s better heeled, estate plans will be impacted across the board. Naturally, if you are divorced, or considering getting married or divorced, contact an estate planning attorney to review your estate plan. Your estate planning attorney can help you make sure that your assets are distributed according to your wishes – no matter what happens.
A young man asked an old rich man how he made his money. The old man leaned back in his chair with a hefty sigh and replied, “Well, my boy, it was 1932 – in the middle of the Great Depression. I was down to my last nickel.” “I invested that nickel in an apple. I spent the entire day polishing that apple until it shined like never before. Then, at the end of the day, I sold that apple for ten cents.” “The next morning, I invested those ten cents in two apples. I spent the entire day polishing them and sold them at 5:00pm for 20 cents. I continued this system for a week, by the end of which I’d accumulated a fortune of $25.60.” “Then my wife’s father died and left us two million dollars.”
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