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Archive for Sunday, October 28, 2001

Home sale after divorce not unusual

October 28, 2001

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Q: My husband and I divorced last year, but, with all of the emotional upheaval, I did not even think about any kind of estate planning until recently. I am 53 years of age, have no job skills, and did not work outside the home during the marriage. I received the house and contents, $2,300 per month alimony, my car, and $275,000 from my ex-husband's 401k plan, which is now in my new IRA. I cannot afford to continue to live in the house which is what I fought so hard for in the divorce and need more cash. I am looking to complete my will and various powers of attorney; however, since I no longer have a husband, what do I do about appointing a person as my agent? What is the common practice?

A: Not unlike others in your situation, fighting for a house that two of you enjoyed, but that one of you cannot afford, often leads to a sale shortly after divorce. Since it is your primary residence, you should be able to exclude the first $250,000 in capital gains and clear that in addition to your cost basis. Then you can find a residence more in line with your budget.

Spouses do not have a corner on the market when it comes to choosing an agent to make your financial and health care decisions should you become incapacitated. Since this is a very important decision, before you choose that person, you should thoroughly discuss your intentions and desires with those whom you trust. If you do not have children whom you can appoint, you might want to consider siblings or, in some circumstances, a third party such as a bank or trust department.

After you sign the documents, you should give your agent a list of your health-care desires, including your feelings about life support and extraordinary life-prolonging medical procedures. Then if your agent is later called on to make decisions, he or she will be able to act effectively on your behalf and, hopefully, eliminate family disputes that can occur during these trying times.

Unlike your will, your health-care documents should not be placed in a safe-deposit box. Instead, we suggest that you give your agent, your doctor, and close friends copies because the documents will do you no good if the folks at the hospital don't know they exist. We suggest that you talk with your doctor to make sure he or she understands your desires and use the opportunity to introduce your partner to this important health care provider.

Since it may be somewhat dangerous to give a third person full access to your finances, your financial power of attorney should probably be of the "springing" type that is, the authority under the document "springs" into existence if and when you become incapacitated. These documents should be drafted to fit your needs and should not be purchased on line or in a store.

Q: I think my wife is having sex with a close friend of ours. His wife and I have been suspicious for a number of months. She and I hired the same lawyer who suggests that we hire one detective and split the cost. Is this possibly a conflict of interest? Does the detective have to catch them in the act?

A: First of all, it is not necessary to find two people engaging in a sexual act to prove adultery. You must show an opportunity and the inclination to be intimate, which can be proved by either direct or circumstantial evidence. We see no conflict in you and your friend's wife working together and sharing expenses.

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