Leah Hadley [00:00:01]:
Welcome to Intentional Divorce Insights. I'm Leah Hadley, Certified divorce Financial Analyst, accredited financial counselor, and the founder of Intentional Divorce Solutions. I'll be your guide through the complexities of divorce finance and emotional wellness. Join me as we uncover practical tips and empowering insights to help you navigate your divorce with clarity and intention. Hi there and welcome back to Intentional Divorce Insights. I'm so happy that you are here with us today with we have a phenomenal guest today. This is Lauren Klein. She is a Florida native and has been specializing her law practice for over the last decade in tax planning, elder law, and probate administration.
Leah Hadley [00:00:44]:
Prior to co founding Flourish Law Group, Lauren's prior roles included tax consultant with Deloitte and attorney with Holland and Knight's Private Wealth Services Group. Always love to find a financially savvy attorney. It's just so nice to have you here, Lauren. Lauren is an Adjunct professor of Wills and Trust with St. Thomas University Benjamin L. Crump College of Law and a Florida Fellow of the American College of Trusts and Estates Council. She is also the founder of the Wealthy Lawyer $quad, a community and coaching program curated for pre law and law students and new lawyers, and the host of the Wealthy Lawyer $quad podcast. She was recently awarded the prestigious Corporate Council's Women Influence and Power and Law Award for Mental Health and Well Being Initiative.
Leah Hadley [00:01:34]:
Welcome Lauren. Thank you so much for being here with us today.
Lauren Klein [00:01:37]:
Thank you so much for having me. I'm looking forward to this conversation.
Leah Hadley [00:01:41]:
Absolutely. So, Lauren, when people are facing a divorce, a lot of them are really struggling with how estate planning kind of fits into this process, right? Fortunately, we have lots of people who have done a great job of doing estate planning with their former spouse. Now, obviously there are a lot of people who haven't done that, but for those who have, especially for those who have trusts in place and things like that, a lot of times they're wondering, as I prepare for my divorce, what should I know from an estate planning perspective? I'm hoping you could help us with that.
Lauren Klein [00:02:16]:
Absolutely. And there's a lot of different things to think about, but one of the first things that they'll want to consider is whether they can even work with the attorney that drafted the estate plan. So it depends on who that attorney represented. But typically with with married couples, you're working with one estate planning attorney. And usually in the engagement letter there's what we call a conflict of interest waiver, saying, you know, spouses might have a conflict of interest inherently for various reasons, and so oftentimes that attorney may not be able to represent one spouse against the other because there would be that inherent conflict. But I would always reach out to that attorney. You know, obviously it also kind of depends on how friendly the divorce is. But obviously make sure you have copies of everything.
Lauren Klein [00:03:05]:
And then just maybe ask them, you know, are you able explain the situation, explain the, you know, the nature of the divorce? Because we all know not all divorces are the same. And say, are you able to help me? And if not, do you have a recommendation or two of someone who can help me? And then I would just schedule a meeting with them and just get an understanding, the lay of the land, if you will, as to what your plan says, what the rights in your state are. Sometimes some documents are no longer valid once the divorce has been filed for, unless the document says otherwise. Some documents, depending on your state, may treat a spouse as having pre deceased once the divorce is finalized. You want to get an understanding of at each stage before, during and after the divorce, what is the impact on the documents, who receives assets, who your power holders are. Because it can vary state to state and document to document. For example, here in Florida, once you file for divorce, that durable power of attorney that allows, usually a spouse is the first agent, not required. But often that's what people do to act financially, you know, financially, legally.
Lauren Klein [00:04:22]:
For that principal, we call it the second divorce is fine, is filed for, that is severed, that agent can no longer act. So that would be my first step. Just kind of take a step back and see where do you stand and what do you need to do next.
Leah Hadley [00:04:38]:
That's super helpful. And I know a lot of people will ask me, Lauren, can I just talk to my divorce attorney about these estate planning issues? And I personally am a big proponent of utilizing attorneys that specialize in the area of law that you have questions about. But can you talk a little bit about why that matters for estate planning in particular?
Lauren Klein [00:05:00]:
Yes. So there's something that happens when you graduate from law school. All of a sudden all of your friends and family want to ask you every sing legal question, which, especially when you're, you're a young attorney, you're like, I actually don't know anything. I didn't learn, I didn't learn how to practice law in law school. But as you kind of pick your niche and you begin to really get good at what you do, you know, whether it's family law or trust in the states or criminal or bankruptcy, we usually, you know, back in the day, lawyers kind of were jack of all trades. That's not really the way things work, work anymore. Because the law is complex. Each area of law can have a lot of pitfalls.
Lauren Klein [00:05:39]:
And so most, but not all, most family law attorneys are very, very specialized and amazing at what they do, you know, and they might even have different specialties. But most, not all, most family law attorneys are not trust and estates attorneys. So they might know enough to be dangerous. They certainly know enough to say, hey, here's a great trust and estates option or go find someone you know that you can work with. But they usually don't know the ins and outs of the impact on inheritance on the laws of intestacy, which is, you know, how you inherit if you don't have estate planning documents, they don't understand probate avoidance, they don't understand most of the time tax laws and how the overall structure impacts the tax implications. I mean, heck, a lot of trust in estates lawyers don't understand that. And that's okay. We all know our specialties.
Lauren Klein [00:06:36]:
Not every trust and estates attorney is a tax attorney like I am. But there's a lot of things I don't know too. Right. It's, it's just we all have our specialties. So I would always recommend especially, especially, especially if it's a high net worth client. But even if it isn't, getting a team together that you know can communicate and collaborate on your behalf, including the family law attorney, the trust and estates attorney, the financial professional, the c. To make sure that everyone is really looking out for your best interest and there isn't something that slips through the cracks.
Leah Hadley [00:07:11]:
And I really like to look at an estate planning attorney as part of your ongoing team. Right. Your family law attorney is there to support you through the divorce process. For most people, that's going to be one time in their life. You know, maybe it's another time. But estate planning laws change, tax laws change. Right. There are reasons why you want to have your estate planning documents reviewed by your attorney every so often.
Leah Hadley [00:07:37]:
So this is a person that you want to have in your corner. It's not like your financial planner where you're not going to be meeting with them quarterly, but you do want to have them engaged as part of your team going forward as well, right?
Lauren Klein [00:07:49]:
100%. And so when you're looking for a good trust and estates attorney, one of your questions should be what is your process for us staying in touch and making sure things are updated that I'm aware of any changes in the law? For example, we, we've borrowed a lot from the financial world. I was a finance major, intern at one of the big brokerage houses. My law partner was in wealth management for years. So we stole a lot from your world. We do annual touch points for every client because what happens is 20 years go by, clients don't understand why or what is happening within their estate plan. And so they just, they think they're good. And oftentimes that's just not the case.
Lauren Klein [00:08:31]:
So it's really important to have that ongoing relationship. And it's really important that I think that your team all likes each other and works really well together because then everyone's coming together to support you as the client rather than, like, egos and butting heads.
Leah Hadley [00:08:47]:
Yeah, absolutely. Absolutely. So I'm curious, Lauren, are there any mistakes that maybe you've seen people making in the early stages of divorce that might work against them later in the process related to their estate plan?
Lauren Klein [00:09:01]:
One of the things you really want to be cognizant of is, and this is again, why the team needs to talk, seeing what you can and can't do, do as far as retitling assets or even changing beneficiary designations is going to be state specific. And so you're going to want to talk to your entire team to make sure that you're not doing anything that is either, you know, going to make the judge upset or maybe even be contrary to what, you know, you're allowed to do. That's a big one for sure. And then the other thing is sometimes people wait until the divorce is finalized to update their documents. But I would be very cautious about waiting. I would start the process once the divorce, either either before or once the divorce is underway. Because if something happened to. Let's.
Lauren Klein [00:09:48]:
Let's say that I'm getting divorced and it's going to take a year and a half. Now I'm 40, so hopefully nothing happens to me, but I have two young children. If something happened to me during the pendency of that divorce process, my husband would still be, as my estate plan stands, he would be my primary beneficiary. And that may not be what I want. You know, maybe I want it to be my children. Now, there might be state laws that don't allow you to disinherit a spouse until the divorce is done. But we're lawyers, you know, so there's always workarounds. We, in Florida, we have something called the elective share, where a spouse must inherit at least 30% if they file for it.
Lauren Klein [00:10:31]:
So what we do is something called an elective share trust. So if that, if the Unlikely occurred, I'll kill myself off. That's what I just do all day. I pass away. My husband files for the elective share claim, his 30%. It goes into this trust that there at least there's some protections as to how the money can be used and who it goes to after his lifetime. Even if he goes and gets, you know, a hot young girlfriend or wife and has a bunch of kids, you know, more power to him. But I don't want my money going down that way.
Lauren Klein [00:11:01]:
So there's definitely a lot of things to think about. Even, you know, I think a lot of people, when they think estate planning, if they're thinking about it at all, they think will, maybe they think trust. They don't always think like power of attorney and health care surrogate who is going to make decisions for you during that divorce and after you go into the hospital and you need someone to be able to communicate with the doctors or make a decision on your behalf. You want that health care surrogate updated to reflect who you want to be named. And so there's no issues, you know, with HIPAA or other laws where they're, you know, medical information can't be shared or decisions can't be made. So that's what I would say. You know, look at the assets as a whole, see what can be retitled, if anything, see how the documents should be updated. Especially if it's a contentious, long drawn out divorce.
Lauren Klein [00:11:49]:
You know, you want to protect your, your assets if you have children, whether they're minors or adults, you know, that's, that's something really to think about.
Leah Hadley [00:11:57]:
Absolutely. And the healthcare one is one that we talk with clients about a lot who are in a contentious divorce. Right. Because for most people, if you're in a situation that is high conflict like that, you probably do not want your spouse to be making the decisions around your medical care. And so making sure that you have thought through and consulted with your attorney to figure out what your options are can be really important. It's amazing, Lauren, how many people through the process I see have medical issues arise. The process is so stressful. Right.
Leah Hadley [00:12:31]:
That if there were anything underlying, obviously I'm not a doctor, but I see things come up all the time when people are going through this stressful process. And what happens, Lauren, if they haven't done anything around maybe updating their healthcare
Lauren Klein [00:12:44]:
surrogate, it depends on the state, but your spouse may still be the one who can make decisions, who can receive health care information. I mean, I'm, I'm currently happily married and I hope it always stays that way. But I can imagine if I was going through a divorce and I was dealing with a health issue, I wouldn't want him to know about it, especially if it was kind of stemming from the divorce. That just feels like a violation, you know, of. Of my own privacy. So. Yeah, that's a really, really good point. It is crazy how connected the mind and the body are and how bad stress is for.
Lauren Klein [00:13:17]:
For us. So I, I'm so happy you bring that up with your clients because it's something that people just don't usually think about when they think estate planning.
Leah Hadley [00:13:25]:
Yeah, absolutely. The other things that people often don't think about when it comes to estate planning is how important estate planning is after the divorce, before you get remarried. And we talk a lot with clients about how critical this is to make sure that things are handled the way you want to, especially if you had children from your first marriage. So could you talk a little bit about some of the things that you see, Lauren, and maybe some of the pitfalls that people can avoid?
Lauren Klein [00:13:52]:
This is such an important topic. And I, you know, I think when someone has gone through, at least with our clients, my experience has been once someone has gone through a divorce and they're, you know, they're, I don't want to say jaded, but they've seen what can happen, and now maybe they have, you know, they have children. Once you have that blended family, it is so, so imperative to make sure you get a prenuptial agreement in place. And it doesn't have to be this very unromantic, you know, kind of thing where you're saying, oh, we're definitely going to get divorced. It's not that it's saying, let's go into this marriage with a roadmap of if, God forbid, either one of us passes away or there is a divorce, that we know what's going to happen. Because with any situation, if there is either no estate plan or inadequate estate planning, you know, bad things happen. Probate, which is like court process, that's very expensive and very drawn out and very administrative. And just a lot of what estate planning is, is avoiding that.
Lauren Klein [00:14:53]:
That's with any family. But if you have a blended family, let's say you're coming together to two new spouses to be. You have your respective children, you probably have real estate, you might have businesses, you certainly have more assets than you probably did that first go round. What is going to happen if the divorce or the marriage fails or, you know, someone passes away because the state law might say half goes to a spouse, you know, or it might, for example, like if you. We have a lot of prenups where there's business interests in real estate, what's going to happen? Who's going to manage it? Even if you want to leave things to both your children and your stepchildren, just having a trust and estates lawyer who will walk through each asset with you and say, okay, let's walk through these scenarios. What would you want to happen? Does that make sense? Here's what would happen. If you don't do anything, it becomes so important, because once you get married, you. You obtain marital rights and you also have marital obligations.
Lauren Klein [00:15:54]:
So it's different in every state. But in Florida, we have homestead law, which is a law that pertains to our primary residence. And for all the Floridians listening, we all know the property tax cap, that's big. But there's also creditor protection and there's restrictions on dissent and devise when you are married, and it may not go the way that you want it to in a blended family, it might be a life estate for the surviving spouse and then to the children. That may not be what you want to happen. And so it's really important that you understand what those marital rights mean and what you want to waive in order to have a plan that meets your goals as a family. There's also that elective share that I talked about earlier. And what I always tell.
Lauren Klein [00:16:39]:
We have. We have a lot of prenups going on right now. What I always tell the clients is, listen, this is a. This is the floor. This is not the ceiling. You can give each other the world if you choose, within your estate planning documents and your beneficiary designations. All you're saying is, I don't have to do that. I don't have to have a spouse sign off on a transfer of my home, even if they're not on the title because we've waived that requirement.
Lauren Klein [00:17:06]:
Things like that, that people just don't. They don't know. Like, why would you know if this is not your profession and your specific area of expertise? So incredibly, incredibly important. Great question.
Leah Hadley [00:17:18]:
Yeah. I love the way that you were talking about the prenuptial agreements, and I love that you have a lot going on right now. I think that's fantastic because it means people are being intentional. Right. My thought on prenuptial agreements is you're entering a prenuptial agreement or an agreement if you're getting married. Right. Like, you have an agreement in place, the prenuptial agreement allows you to have a voice in what that agreement says. It allows you to work together to come up with what that agreement is going to be for your family.
Leah Hadley [00:17:50]:
But the agreement exists whether you sit down with an attorney and draft it together or you just accept what the state is providing for you. Right. It's just like an estate plan. You have an estate plan whether or not it's one that you've chosen for yourself and for your family, or whether it's one that the state has chosen for you. Right. And so it's so powerful to come together with your partner and say, hey, this is what we are committing to together. We're being thoughtful, we're being mindful and intentional around these financial decisions. And just like you said, Lauren, it's not preparing for a future divorce, but it's.
Leah Hadley [00:18:22]:
It's being intentional about coming to an agreement, about what is the financial agreement that we're making together in this marriage instead of just doing it by default.
Lauren Klein [00:18:31]:
Yeah. And, you know, I think, you know, we all know, I think at this point that one of, if not the main reasons marriages usually fail is something to do with money.
Leah Hadley [00:18:39]:
Yeah.
Lauren Klein [00:18:40]:
And so you are literally setting yourself up for success by starting out this marriage with a very open and honest conversation. And it's funny, because we have had people come back to us and say, now that I've done this, I am more excited to get married. I feel more confident in our relationship and our ability to talk about money, to talk about hard things, you know, and so it's funny because people have kind of this stigma. I think the stigma is going away, but once they go through the process, not always, you know, but oftentimes they're like, wow, that was really, really great. And we do have some that are like, one spouse has a lot more money than the other. It can get very contentious. That's kind of a different situation. It's still important that they do it, but it's usually when people are kind of coming in on that same playing field or similar playing field that they're like, whoa, that was really good.
Lauren Klein [00:19:34]:
I'm really glad we did that. Truly. Like, people have said that to us multiple times.
Leah Hadley [00:19:38]:
I believe it. Absolutely. Because it gives you the clarity. Right. Otherwise, you're entering into this unknown agreement, but it gives you the clarity. You know exactly what you're agreeing to. Right.
Lauren Klein [00:19:48]:
Especially for women to have financial confidence and empowerment is. Is everything. You know, it really is.
Leah Hadley [00:19:54]:
So what is the most expensive mistake you have seen somebody make because they waited way too long to update their estate plan after a divorce.
Lauren Klein [00:20:04]:
I mean, I think one of the worst situations that I've seen so far was it wasn't even a client because there wasn't anything we can do. But a son called us, and he said, hey, my father just passed away. He had, you know, a house in Boca. He had millions of dollars in a brokerage account. And him and my stepmom entered into what are called I love you wills. So I love you wills are basically, I give you everything. You give me everything.
Lauren Klein [00:20:30]:
And it just goes to our individual name, and that's it. And it was a blended family, right? Dad, stepmom. So dad passes away. Stepmom survives her will, said that after she passed, it would go to the stepson. But as soon as dad was gone, she changed the will. And so the son called us looking to hire us and said, what? What can we do? What can we file? What? And I'm like, does she have incapacity? Is there undue influence? He's like, no, no, no. I'm like, there's nothing you can do.
Lauren Klein [00:21:03]:
Those assets that were intended to ultimately, whatever was left be your inheritance are now. It sounds like they're going to someone else entirely. And I think if, you know, if we brought dad back and was like, is this really what you had intended? The answer would be no. You know, so most of the time in a blended family, that's why having trusts are important, because it could have said, you know, maybe everything to stepmom, but in a trust, and then it goes to son or maybe, you know, 75% to ma stepmom, and 25% to son or son. Something. Something intentional. But once. Once the person's passed, like, it.
Lauren Klein [00:21:41]:
It's too late. And that was. Honestly, that one has stuck with me and my law partner. Like, we tell that story all the time because it illustrates what can really go wrong. And then, unlike the less, like, kind of scandalous side of things, just every probate we do, I always look at it, and I'm like, wow, if they had just done this, this, this, and this, we wouldn't be here right now. We wouldn't be dealing with months and months of dealing with judges. And especially in Florida, probate is very antiquated. You have to file, like, a notice in the newspaper to give creditors notice.
Lauren Klein [00:22:12]:
You have to wait certain time periods before you can do certain things. You have to open an estate account. Like, it just gets even for simple probate. It's really Messy. And so that's why I'm very big on education about what probate is and how to avoid it, because the general population simply does not know, does not understand. And that's okay, not a judgment, but it's. It's like, hey, get that information. So you again, are opting out of what the default is, you know, and
Leah Hadley [00:22:41]:
I, I will say, you know, first of all, your first example that you shared of that stepson who had reached out to your practice, unfortunately, I have seen that many times in my practice. So I just want to say that is a very common example of what Lauren is sharing. And so it's also a very, very good and important reason for us to be really mindful and present and thoughtful and at least consult with attorney around what your your wants to. What your desires are to make sure that you do have that documented the way that you want it documented, because it can be completely avoided. The other piece that Lauren was just talking about, you know, there's a huge transfer of wealth happening in this country right now. The population is aging, right? And so the aging population is leaving their assets. We are just seeing more inheritances than I've ever dealt with in my practice. And the spectrum of what we see from.
Leah Hadley [00:23:33]:
My mom passed away last year and had everything buttoned up tight. It was so easy to execute her estate versus people who haven't done any of the work, whose family members are searching between different bank accounts and insurance institutions and investment firms and just trying to go through this process of figuring out what was even there, let alone dealing with probate and having to go through that process. Very expensive, very draining. I mean, it's just exhausting for so many people who have just lost somebody close to them to be dealing with it. And it can all be avoided. And I think that's so powerful to be educated and to know, hey, I can take the steps that I need to avoid this entirely and make it very easy on my family. And a lot of times people will say, well, why am I spending the money now? Right? Because I'm just saving the money for them. Who, you know, they're the ones that are going to deal with probate.
Leah Hadley [00:24:26]:
They can just deal with it, right? But it's about leaving a legacy that's meaningful for you. Right? And part of that is you can either leave a situation that's very easy for your family or your loved ones to handle or something that's very complicated and create a lot of tension in the family. Right? And so if you think about not just the Financial legacy that you want to leave. But what, what do you want? What values do you want to share with the people you're leaving behind? You know, what are you really leaving behind? It makes you think about it a little bit differently. And for a lot of people, that's kind of the opening into the conversation. Because, Laure, and I'm sure that you deal with this all the time. People don't want to talk about death and estate planning. Right.
Leah Hadley [00:25:04]:
This is a conversation that most people want to avoid at all costs. So what would you say to those people who just don't even want to deal with this?
Lauren Klein [00:25:12]:
The same thing that I always say, which is estate planning is an extension of your financial plan. That. That's all. That's all that it is, you know, and I think once people reframe, because I'll say to, you know, potential clients, clients, family members, friends, person in line at Publix, like, whoever I'm talking to, listen, like, you work really, really hard every day to build a great life for yourself, build a great life for your family. So why, why would you have this entire exposure and, and just open, you know, issues. It doesn't, it just doesn't make sense. You're basically signing over a check to lawyers and courts and giving your family a headache. And I have to say I've heard a reduction in the, well, I don't want to, you know, why am I going to pay for it kind of thing.
Lauren Klein [00:25:59]:
We've heard less of that. We still get that from time to time, which is a good thing. You know, I think people are just becoming, with the Internet and AI and social media, more, More savvy, which I think is honestly, you know, a good thing for the most part. But I would just say it's. It's an extension of your financial plan and you are literally leaving an extra exposure. And why, why would you do that? Why would you do that to your family? Why would you intentionally leave. Leave a mess, Leave that treasure hunt? Yeah, we have people in our probates all the time. They're like, okay, so where's the database to see where all of mom's assets were? Where.
Lauren Klein [00:26:33]:
Where's that database? And I'm like, think about that logically. Like, if all of us had all of our financial information somewhere that anyone could find, like, that's a terrible, terrible idea. And they're like, oh, yeah, I guess. So now what? I'm like, now you wait until you get your letters of administration, however long it takes the judge to get that over to you. And then you go on a treasure hunt. Go on a literal treasure hunt. Unless mom or dad or spouse or sister or whoever had their team had all of their assets documented, were meeting with their financial professional and their estate planning attorney and maybe their CPA on an annual basis, making, making sure beneficiary designations were updated, make sure they understand what their net worth is, how they, if they're taxable from an estate tax perspective or not. Did they maybe move a bank account? You know, I do an annual money date, if not more frequently with my own family.
Lauren Klein [00:27:27]:
And last year I was like, oh, shoot, yeah, we moved that money into a money market when we sold that investment property. And did I put that in the trust? Because my husband had set it up. And, you know, he's not, he's not a lawyer. He's not, he knows, but he's not, like, right, you know, obsessed like I am. And I was like, oh, no. We had an exposure for like two months. You know, it was fine. We're young.
Lauren Klein [00:27:47]:
But if you're not keeping your eye on the prize, it can really lead to issues. So again, not to be a dead horse, but it's an extension of your financial plan. It's not doom and gloom. It's actually empowering. It's asset protection. It's. It's making sure that you are being financially savvy.
Leah Hadley [00:28:03]:
Absolutely. Oh, Lauren, that was fantastic. Thank you so much for your insight today. I think this is going to be really helpful for our listeners. Where can they learn more about you or reach out to you if they need support?
Lauren Klein [00:28:15]:
Absolutely. So one of the best places to find us is our website, flourish law group.com. we have like a contact us button. We have a couple downloads that you can get from there as well. If you want to learn more just about estate planning. We are only licensed in the state of Florida, but I always welcome anyone who's listening. If you're not in Florida or if you want, I'm in South Florida. My partner's in the west coast of Florida.
Lauren Klein [00:28:39]:
If you need someone that's not us, I'm always happy to send a recommendation to make sure that you get connected with the right person. I'm also very active on Instagram at Lawyer Lauren Klein and Flourish Law Group. So follow us, check us out. We try to do some fun things on there and I'd love to connect with anyone that has questions.
Leah Hadley [00:28:59]:
Excellent. Thank you again, Lauren, for being with us today and for our listeners. Thank you so much. I hope you found wonderful value as I did in my conversation with Lauren today and we will see you next week. Thank you for joining me on Intentional Divorce Insights. It's a privilege to share this time with you. I hope each episode offers valuable guidance to navigate your journey. If you find our content helpful, please leave a review to help the others discover the benefits of intentional decision making in divorce.
Leah Hadley [00:29:29]:
Until next time, take care and continue to embrace your path with intention.
