Protect Your Assets And Safeguard Your Wealth With Lindsey Paige Markus

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Episode Description

The two things everyone will face one day are death and taxes. Estate planning attorney Lindsey Paige Markus helps her clients plan for what will happen at their death and protect as much of their wealth from unnecessary taxes as possible. 

As a trusted advisor and bestselling author, Lindsey demystifies the world of trusts, asset protection, and tax planning, revealing how proper estate planning can safeguard your legacy and provide for your loved ones.

In this episode, Lindsey explains how estate planning goes far beyond just having a will. She discusses the power of trusts to protect assets from creditors and ex-spouses, as well as their ability to minimize tax liabilities. 

With major changes to estate tax laws on the horizon, Lindsey stresses the urgency for high-net-worth individuals to act now. She explores how certain kinds of trusts can be used strategically to protect wealth, even in complex situations like divorce. 

Lindsey also explains how proper estate planning can help couples who don’t want to divorce, but also don’t want to continue living in a traditional marriage, restructure their marriage in a way that preserves their wealth for their children. In this type of “legacy marriage” couples can continue to achieve their financial goals AND create a different kind of relationship that allows them to stay “married” but live life on their terms.

Show Notes

About Lindsey

Lindsey Paige Markus is a trusted advisor, best-selling author and committed philanthropist who is as passionate about her work as she is generous with her time, Lindsey heads Chuhak & Tecson’s 25-attorney Estate Planning & Asset Protection group. In her nationwide practice, Lindsey works closely with business owners and families to plan their estates, protect assets, transfer wealth and reduce tax liabilities.

Lindsey is the author of A Gift For The Future – Conversations About Estate Planning. Published in April 2022, which takes readers on a journey through the world of estate planning. In her easy-to-follow writing style that eschews legalese and needless jargon without sacrificing sophistication or thoroughness, Lindsey provides the ins and outs of every estate planning tool, from simple to advanced. She interweaves the family story of Jack and Diane, to guide readers through estate planning needs from the time they decide to marry through the birth of children, business growth, divorce and the complex formation of new families and relationships.

Connect with Lindsey

You can connect with Lindsey on LinkedIn at Lindsey Markus and on Facebook at Lindsey Paige Markus. To find out more about Lindsey visit her website at Lindsey Markus and learn more about Lindsey’s book at A Gift For The Future.  You can also connect with Lindsey through Chuhak & Tescon.

Key Takeaways From This Episode with Lindsey

  • Estate planning involves creating documents to guide clients through incapacity or death, aiming to minimize tax liabilities, avoid probate, and provide asset protection.
  • Asset protection in estate planning can shield inheritances from creditors, including potential ex-spouses in case of divorce.
  • Trusts are a primary vehicle for estate planning, offering more benefits than simple wills or online DIY solutions.
  • High-net-worth individuals need to consider both federal and state estate taxes, which can range from 23.8% to 50% combined.
  • The federal estate tax exemption is currently $13.61 million per person but is scheduled to decrease in 2026, prompting many to consider gifting strategies.
  • Spousal Lifetime Access Trusts (SLATs) can provide financial security for a spouse while maintaining some control over the assets.
  • Postnuptial agreements can be used to restructure financial arrangements in a marriage, often in conjunction with estate planning tools.
  • Divorce impacts estate plans, typically treating an ex-spouse as having predeceased, but beneficiary designations need to be updated separately.
  • Estate planning should be updated during or after divorce, in consultation with divorce attorneys to avoid creating conflicts.
  • Estate tax planning tools, such as life insurance trusts, can be incorporated into divorce settlements to benefit children and minimize tax impacts.
  • Lindsey Paige Markus is the author of "A Gift for the Future: Conversations About Estate Planning," available on Amazon.

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Protect Your Assets And Safeguard Your Wealth With Lindsey Paige Markus


 estate planning, trusts, protect, assets


Karen Covy, Lindsey Paige Markus 

Karen Covy Host


Hello and welcome to Off the Fence, a podcast where we deconstruct difficult decision-making so we can discover what keeps us stuck and, more importantly, how we can get unstuck and start making even tough decisions with confidence. I'm your host, Karen Covey, a former divorce lawyer, mediator and arbitrator, turned coach, author and entrepreneur. And now, without further ado, let's get on with the show.

With me today, I have the immense pleasure of talking to Lindsey Paige Marcus. Lindsey is a trusted advisor, bestselling author and committed philanthropist who is as passionate about her work as she is generous with her time. She heads Chuhak  & Tecson's 25 Attorney Estate Planning and Asset Protection Group 25 Attorney Estate Planning and Asset Protection Group. In her nationwide practice, Lindsey works closely with business owners and families to plan their estates, protect their assets, transfer wealth and reduce tax liabilities.


Lindsey is the author of A Gift for the Future Conversations About Estate Planning. Published in April of 2022, it takes readers on a journey through the world of estate planning. In her easy-to-follow writing style, Lindsey provides the ins and outs of every estate planning tool, from simple to advanced. She interweaves the family story of Jack and Diane to guide readers through estate planning needs, from the time they decide to marry through the birth of their children, business growth potential, divorce and the complex formation of new families and relationships. Lindsey, welcome to the show.

Lindsey Paige Markus Guest


Thanks for having me.

Karen Covy Host

I am so excited to have you and it's like we were just talking for a moment before I started to record this. I have so many questions that I don't know even where to start, but I'd like to start at the beginning, right, so you do estate planning, and I know a lot of people know, or think they know, what estate planning is. But for a lot of people they think, oh, I'll get a will, that's an estate plan. You and I both know that there's a little more to it than that. So why don't you start by explaining what is an estate plan and who needs one?

Lindsey Paige Markus Guest


Great. So I tease often that I live in the world of death and taxes, which isn't often a pick-me-up of a conversation, but it's inevitable for all of us right? No way to avoid it. A lot of people confuse the role of the estate planning attorney with the role of the financial advisor or wealth advisor. I don't do any investment management. I help create documents to guide clients through documenting their wishes in the event of incapacity or upon their death. And in the scheme of that, we're generally looking to do three things we want to minimize potential tax liabilities, circumvent the court process of probate and guardian estates and then, whenever possible, layer in asset protection and wealth transfer tax planning for beneficiaries. So it doesn't sound fun, but when you get into it really is, I promise.

Karen Covy Host


I'm glad you like it, because I know it's not for everybody. But you've intrigued me with the words asset protection. What do you mean by that?

Lindsey Paige Markus Guest


You know, I think in today's day and age we unfortunately live in a very litigious society. Historically, asset protection or creditor concerns, were really targeted mostly towards physicians and attorneys. Those of us who have to deal with malpractice concerns or headaches or nightmares, but in reality, the world that we live in has just become incredibly litigious, and so, whenever possible, we want to create an inheritance structure or a gifting structure so that what I end up leaving to my children or gifting to them during my life is there for them to use but is not reachable by a creditor. In your context of divorce, one of the most creditor concerns isn't just a malpractice liability or a personal injury lawsuit from a car accident, but really a future potential ex-spouse. And if the estate planning is properly documented, we do have the ability to very easily layer in asset protection so that the money is there for a beneficiary but not a creditor of a beneficiary, which could include a future ex-spouse trying to make a claim for maintenance or alimony.

Karen Covy Host


So, if I understand you right, what you're talking about is for let's use me as an example for my children that I would make a gift available, that the money would be available to them, but in the event that they got a divorce, their soon-to-be ex-spouse couldn't touch it. Is that what we're talking about?

Lindsey Paige Markus Guest

Exactly Correct?

Karen Covy Host

That's so interesting. So tell me more. How do you do that? How do you protect those assets in the event of the divorce of the children or potentially of me, or am I reading too much into it?

Lindsey Paige Markus Guest


I wish I could do it all. There are ways that I can do most, but not quite everything. So let's first talk about the kids, because that's very easy to address, either through gifting during your lifetime or through what you pass to them upon your death. The idea would be that, within the Karen Covey trust your revocable living trust that more or less is an extension of yourself and would pass to them after you're gone. It goes back to the old adage that not all trusts are created equal, so you want to make certain that your trust is drafted in such a way so that what your children inherit from you isn't going, as we say, outright and free of trust. Imagine I'm your daughter and I'm inheriting a million dollars from mom.


If I'm inheriting it outright and free of trust because I'm old enough, I'm pretty good with money and you want me to enjoy it the drawback to that is that a creditor of mine whether it be a malpractice creditor or even the potential for a future ex-spouse could try and go after it.


If, instead, the money is retained in trust and if you feel I'm mature enough to manage my own finances, I could even act as the trustee of the trust. But if we structure it like that, we have the opportunity to design it in such a way that a creditor of mine can almost never touch it, and in addition to that, there are huge wealth transfer tax planning tools available. So another drawback of me getting the money outright and free of trust is that, without even trying, I have a million dollars in what we would call my taxable gross estate, whereas if it was properly structured to pass to me through this trust, it could be designed so that it's there for me should I need it. But if I don't need it and I'm successful on my own and that million dollars grows to 5 million during my lifetime, it could then all pass estate tax-free on my death.

Karen Covy Host


Interesting. So the primary vehicle, from what I'm hearing you say, the primary vehicle for doing this is a trust. So in a trust, I know a lot of people they think about a trust and they think they know what it is and they also many people say, well, can't I just do that myself? Can't I go to LegalZoom or Rocket Lawyer and get a trust form and make a trust? What would you say to that?

Lindsey Paige Markus Guest


I think it goes back to what I was mentioning previously. They're not all the same. I think an individual can certainly go online and download a form to attempt to create a trust structure that would help them circumvent what we call the court process of probate on debt, which is the legal process we have to go through when someone passes away. However, I have yet to see a user-friendly domain offer trust vehicles that layer in the tax planning benefits and the asset protection that I described.

Karen Covy Host


That makes so much sense. I just want to put this out there for everyone who's watching or listening. I mean, you and I are both lawyers and we understand the pitfalls, we know where the holes and the potholes in the road are and we know how to protect our clients. Some basic document off of a website that's going to do the same thing is wishful thinking, and maybe in the future, maybe in 10 years, AI will be so amazing that that'll be possible. But for the present that's not possible. And what I see is the real drawback in your area of practice is that by the time someone figures out they've screwed it up, they're dead. It's too late. You can't fix it,

Lindsey Paige Markus Guest


so once in a while we can, so during. But it's much more. It's much more work and it's so easy to fix while someone's alive. but you're absolutely right it's, it's often too late. During my life, the framework of my estate plan is often governed by what we call a revocable living trust, a document that can be amended, revoked or changed during my lifetime. However, upon my death, that revocable trust becomes irrevocable and can't be changed. And that makes sense, because once I'm gone, I don't want you or someone else to go in and change the terms of my documents. There are now a myriad of ways that we can go in and amend an irrevocable trust, so we can't say that instead of the money going to Lindsey and her kids, it's now going to Johnny and his kids. But if the trustee and beneficiaries are all in agreement, the legislature has created tools we can use to navigate this. We can't always do it, but once in a while we can. But certainly nothing compares to the opportunity we have to do it right the first time.

Karen Covy Host


Yeah, that makes so much more sense, and I know one of the big areas that you help people with is tax planning, because when you die, there are taxes that your estate or your heirs may have to pay upon your death and also in any kind of a wealth transfer situation, whether it's death or divorce. If you don't do things properly, there can be enormous tax implications. So can you speak a little bit about what those tax implications are, particularly for high-net-worth people like people who have a lot of money to lose, have a lot more taxes to worry about.

Lindsey Paige Markus Guest


Absolutely have a lot more taxes to worry about, absolutely. So in my space of death and taxes, we often talk about the size of someone's taxable gross estate and it's a legal term of art from the IRS and think of it as the obvious assets on your balance sheet equity in your home, business interests, investments, retirement plan assets but one asset that's often overlooked is life insurance. I think the challenge we run into with life insurance in particular is that it's regularly marketed as being a tax-free vehicle. So if I have a $5 million death benefit on a policy on my death when there's a payout the $5 million death benefit on a policy on my death when there's a payout the $5 million is paid out income tax free. But the income tax rules are different from the estate tax rules that govern death. So, yeah, so it's not necessarily estate tax free. So even if it's a term policy that might be worth nothing today, if I die during that term and the $5 million is paid out, the IRS includes that in my taxable gross estate. So we have these moving targets of what my projected net worth will be, with also taking into consideration death benefits on life insurance. Then, based on the year in which you die, the government allows you to pass a certain amount of money tax-free, and we call that the exemption amount. What is exempt or free from taxation at the federal level this year, in 2024, it's very high.


It's $13.61 million. That's for each decedent. So if I was married, I would be able to pass $13.61 million and my spouse would have the opportunity to do the same. But then we also have to think about where am I living, what state am I living in, and does that state have its own estate tax or death tax regime? And some states have not only an estate tax, where the estate is taxed, but they can also have what we call an inheritance tax, where the people who get the inheritance are subject to tax.


Nothing's easy, right? Illinois, New York, Massachusetts those are three states in particular that I often joke are expensive places to die, because in Illinois, although I could pass 13.61 million right now at the federal level, in Illinois I can only pass 4 million, and yeah, it's crazy. And in Massachusetts it's only a million. New York is slightly higher, just below 7 million. But so we have these constant moving targets, and the reason why it's so important is because we spend our livelihoods trying to save and protect our assets and minimize income taxes. And if we fail to look at the big picture and recognize what the estate tax or death tax liability might be, we're missing it all, because the taxes can be anywhere from 23.8% to 50% when you combine federal and state level estate taxes.

Karen Covy Host



Lindsey Paige Markus Guest


Yeah, so for a lot of my high-net-worth clients. I tell them we either have to do more work or you need to just stop working. Take it easy live it up, spend it down.


But we're really in an exciting time right now, in my space, over the next 18 months, because the law is scheduled to change dramatically. We got to this exemption, or tax-free amount, at the federal level under the Trump administration. Trump passed legislation to double the exemption from $5 million to $10 million, adjusted for inflation, but he didn't have enough votes or support to make it permanent. So, as a compromise, in 2026, it's scheduled to drop back in half, so you got to die now. One option is to die now, right, or the law says we can either transfer the money by death or we can gift that amount during our lifetimes. So a lot of high net worth clients that I'm working with are in this race against time between now and the end of 2025, before the sunset hits to use it or lose it. I need to use the $13.61 million exemption or I lose it, and it's busy, I won't lie.

Karen Covy Host


That's interesting, and so if I'm a high-net-worth person and I want a gift to my children, why can't I just gift them $13.6 million?

Lindsey Paige Markus Guest


You can, there's no question. You can write a check. But if you write a check to them, the money that you transfer is not asset protected from their creditors and we're not layering in those wealth transfer tax planning benefits that we talked about before. So, ideally, we would create a trust, a gift trust that you transfer assets to during your lifetime for the benefit of your children during your lifetime, for the benefit of your children.


And that trust is asset protected and designed to be what we would often characterize as GST exempt. The acronym stands for generation skipping, transfer tax exempt. It's the fancy way of saying that if I don't spend it, whatever's there plus the appreciation, can pass estate tax free.

Karen Covy Host


Interesting. So what happens? These are all the things that happen on death. But how does divorce play into this? How does divorce throw a monkey wrench into your plans, or does it?

Lindsey Paige Markus Guest


I think divorce puts a monkey wrench, potentially, and flans across the spectrum. We just need to navigate it appropriately for each individual family. What we're seeing more and more is that a lot of clients want to do something for their children, but they never want to be in a position where I might have to ask my children for money back or I might have to ask them for help. So oftentimes we are doing something to children's trust, but more often than not, even with uber high net worth clients that have hundreds of millions of dollars despite their wealth advisory team running projections to tell them with 99.9% certainty they have more than enough money even once the gifts are made, they're scared, and we never want anyone to be scared or reluctant to engage in a recommendation. What they often feel more comfortable with is the idea of something known as a spousal lifetime access trust, a SLAT, where it's similar idea or concept to the gift trust for the children, but instead of me creating this for the benefit of the kids, I'm creating it for the benefit of a spouse and children, and it's our hope that the spouse won't need to use this money, but just in case he or she is in a position where they will never have to go back to the kids to ask for that money.


But anytime we're engaging in these kinds of gifts to trust unlike the revocable living trust that can be amended, revoked or changed, the more advanced planning tools the gift trusts are typically almost always irrevocable and can't be changed. So if I'm living a wonderful life with my significant other, with my husband, and we're madly in love and there's no sites of divorce at all, I might not have any hesitation in making a large gift to a trust. But if I look at the statistics of friends and family around me, I may get cold feet or, based on our history, I may feel differently, and in those instances, more and more, we're seeing couples start to talk about post-nuptial agreements, to look back and address how these gift implications might play out in the event of divorce. And that's where you and your team come in.

Karen Covy Host


Yeah, absolutely. But you raise really interesting questions about the whole postnuptial agreement, because what I'm seeing in my space, especially with families that have children and especially with higher net worth people who are getting to be later in life and they don't want to break up their estate, the money that they've built over the course of their lifetime, but their marriage fundamentally isn't working Right. So they need to restructure their marriage or their arrangement in some way. But both of them are understandably nervous about OK, if we're going to stay married on paper but have a different arrangement between the two of us, how can we secure the financial end of that arrangement so that neither one of us has to go back to the kids and say support me, so both of us have enough money to continue to live out the rest of our life in the way we want, but without either one taking advantage of the other? Is there any way to do that?

Lindsey Paige Markus Guest


Yeah, I think estate planning and gifting can play a significant role.


I've been brought in in a couple of post-nups for this very reason, so I'm a trained collaborative law fellow to come in and consult on the estate planning and estate tax implications of divorce.


And the couple was at a crossroads because they wanted to do just what you described but they didn't have a vehicle to do that. So imagine that the spouse that I create an irrevocable trust for the benefit of my husband and I put $3 million in there to give him peace of mind and knowing that money's there. But because I'm participating in the terms and conditions of the trust I can also help dictate what happens on his death. In other words, if he dies, what happens to that money? I want to make sure it's not going to, you know, his next girlfriend. I want it going to our children or I might want or need it coming back to me. And irrevocable trust can play a really beautiful role in helping to design that waterfall of funds and do so in a way that's incredibly tax efficient for the entire family unit.

Karen Covy Host


That's so interesting. So if I'm tracking this right, I, as the person who is trying to create this, I can do this irrevocable trust, but for the benefit of my spouse. So he's got some security, some financial security, but I still get to keep my fingers in how that works.

Lindsey Paige Markus Guest


I mean you don't get to keep your fingers in how that works, because the IRS, if they think you're working at or controlling it, they'll come back and they'll say Karen, we're not stupid, this is really yours. You never released sufficient incidents of ownership and control, but you can participate in the drafting of the document and help outline the terms and conditions for what goes on in the confines of that trust

Karen Covy Host


I see, and then, once that trust is done, it's irrevocable, not only by me, the person who put the money in, but also by my spouse. Is that right?

Lindsey Paige Markus Guest



Karen Covy Host


So this would be a way if a couple came to you and they were either older or they don't have to be older, but they're very high net worth. They want to restructure their marriage in whatever way that they want to do it and they want to have what I call a legacy marriage. Right, so they keep their estate as their legacy for their children and to take care of each other, but they change the personal arrangements between them. This would be a vehicle for them to do that?

Lindsey Paige Markus Guest


Absolutely. And there are some huge estate tax benefits to staying married. So if I'm divorced or if I'm a single person by choice, what ends up happening is immediately upon my death, to the extent that I have a taxable gross estate, I have more than the tax-free amount. We have to pay the estate tax upon my death or within nine months of death, at both the federal and state levels. If I am married, however, the IRS allows us to design the trust in such a way even the basic revocable living trust that we started our conversations with we can design them in such a way so that there will be no estate tax owed at either the federal or state level until the surviving spouse dies. And oftentimes this marital trust planning can be a wonderful way to provide additional assets to the surviving spouse and maximize the legacy that we can leave, from a tax planning perspective, for the children, who are the ultimate beneficiaries.

Karen Covy Host


Okay Now you mentioned a postnuptial agreement. Can you explain to the listeners A what that is, and B, how would that fit into this kind of a plan?

Lindsey Paige Markus Guest


So a postnuptial agreement is just like a prenuptial agreement, except it's executed after you're already married, sometimes shortly after, if the couple never got around to formally drafting and negotiating the terms of the prenup that they meant to do. But, as you described, in those situations that are arising more and more, we're seeing mature marriages, couples that have been together for decades, seeing mature marriages, couples that have been together for decades wishing to create a new business plan or legal framework for how things are going to work in this newly defined marriage. One of the key differences, though, between a prenup and a postnuptial agreement is this concept in contract law known as consideration. So if I'm marrying Brad Pitt and he asked me to sign a prenup, the consideration for me to enter into that agreement is the marriage itself. But once we're already married, what gives? And different states have different rules.


Not all states recognize postnuptial agreements, and in most of the states that I've looked into, this, as usual, it depends right. So what is sufficient consideration? Well, it depends on the terms and conditions of the agreement. Sometimes it is a gesture from one spouse to the other of taking an individual non-marital asset and making it marital, but that's something that varies dramatically from party to party. They're hard to do, though not just for the attorneys. I mean, the attorneys actually have the easy part of documenting it. I think it's hard in practice for a married couple to sit down and really address the considerations and contemplate the demise of their relationship, and that's what I've seen. I don't know what your experiences have been.

Karen Covy Host


Yeah, it is. It's very, very difficult. But the question is and you know, is it the demise of your relationship or is it a restructuring? And I think, and I found, that when you're talking about restructuring, instead of like killing, doing away with it, becomes a little bit easier to have the conversations and to achieve what you want to achieve. And let me just put this out there, this is not for everybody.


Some people just need a divorce, like everything has gone downhill. You need a divorce. But other people say, no, we have Our relationship between us isn't what we either one of us wants. However, we have common goals. We have common goals for our children. We have common goals for our money and we want to find a way to effectuate those goals and not have to pay a whole lot of our estate to divorce lawyers and go through that process for years and years. Wants to think they can be divorced in six months. It very rarely happens, especially when you have significant assets. You've got a lot to fight about, right, so it takes a while. People don't want to go through that. They say, no, can we bypass that? Achieve the goals that we want and just move on? But they want some security. So even in a state that doesn't allow the postnups, could you still do trust planning?

Lindsey Paige Markus Guest


Yes, absolutely. The gifting that we talked about previously has nothing to do with postnups. From time to time, those gifting documents are used or referenced as an exhibit or an agreement between the parties in terms of what's going to happen, but they're certainly they need not be hand in hand.

Karen Covy Host


That is that's so interesting. So it sounds like there are definitely tools for people to use. If, if this is really what they want to do, they can do it, I would agree, interesting. Now what if they do go ahead and they get a divorce? What does that do to their estate plan?

Lindsey Paige Markus Guest


So the revocable living trust, which typically works in concert with a special kind of will known as a poor over will, as well as the powers of attorney, those disability documents for financial and health care decisions. Those can always be amended, revoked or changed at any point in time. I haven't done an analysis of all of the states across the country, but in every state that I have looked up and it's been many upon divorce, the estate plan typically will treat the spouse as having pre-deceased. So in my delusional hypothetical where I'm married to Brad Pitt, if he dies before me, even if I don't update my estate plan right away, he will be deemed to have pre-deceased me. But that's really a band-aid because, as you know, and I'm sure you've talked about with countless clients and on your podcast before just because the divorce decree or estate plan says one thing, the beneficiary designations and life insurance and retirement plans govern and although Brad might be deemed to have pre-deceased me, his brother, my ex-brother-in-law or his family members might still be listed in areas of control or as beneficiaries of my plan and the law doesn't necessarily treat Brad and his entire posse as having pre-deceased me automatically. So I encourage anyone and everyone going through a divorce, update your estate plan.


It's so easy. It's nothing like the divorce process In the context of gifting. It's a little more involved because those documents are irrevocable. If we know that a divorce is contemplated at the time that we're engaging in the gifting, we can often draft contingencies so that I might want to leave $13.61 million in trust for Brad. But if we divorce in trust for Brad, but if we divorce he's on his own and then it immediately goes to the children. Or maybe that's part of our agreement, as we talked about Brad and I restructuring the terms of our marriage and our relationship, and maybe we agree that that 13.61 million that I'm setting aside in trust for him is then considered his individual non-marital property. So there are ways we can address it differently, but it is a consideration.

Karen Covy Host


You know, a question I get from my clients over the years that I've gotten a lot, is when do I do this right? I'm going through a divorce and nobody wants to be in the middle of a divorce and should something happen and they die, they have their soon to be ex-spouse but not ex yet inheriting everything that they've been fighting so hard to keep for themselves. So what would you say to them? Should they get a new estate plan and new documents during the divorce or after the divorce, or both?

Lindsey Paige Markus Guest


So I often try and defer to my fellow co-consul whomever's guiding them in the divorce process. Some are more I don't know, let's say aggressive than others, and you can imagine situations where, if Brad Pitt found out that I had amended and restated my trust to cut him out, what he might do or how he or his counsel may react to that. So I often consult with the divorce attorney representing our mutual client to make sure that nothing we're doing is going to create more conflict between the parties. But absent that, it's really easy for us to make the updates and changes. And even if my fellow co-consul says, you know what? I don't want you to formalize anything until the marital settlement agreement is done, I'm like, okay, not a problem, and I'd work with my client to prepare the framework so that as soon as the MSA is signed they're ready to sign their updated estate plan.


So there are different things we can do, but there are also a bunch of estate tax planning tools that can be incorporated and I would love more advisors to consider as part of the divorce process.


So oftentimes there is a reference in the MSA whereby Brad needs to agree that he is going to provide maintenance or spousal support to me or vice versa, where I need to provide it to him and as a security for that, in the event one of us dies prematurely, there might be a life insurance component. As you know from our conversation earlier, life insurance is income tax-free but not necessarily estate tax-free, and it could have a negative impact on my estate when I die if I'm the insured, and then another one on Brad's estate, ultimately hurting the children who we care about. So if an estate planning attorney with tax planning experience is brought in at the time that MSA is agreed upon, we can often talk to the couple and agree on a special gift trust or life insurance trust which could be the vehicle to hold that insurance to make it estate tax-free for everyone involved, ultimately leaving more to our children, which is what we want to do. But it all takes a little planning.

Karen Covy Host


That is such amazingly great advice, and especially having been involved in the divorce negotiations for more clients over the years than I can even count. And a big bone of contention is often who is the beneficiary? Okay, I'm giving you know. Yeah, maybe I'm the one that has to pay, let's say, child support, and so I have to maintain a life insurance policy to secure that child support, because if I die, I'm obviously not able to pay that anymore. Right, so and? But what I want to do is I want to name my children as the beneficiaries, because I don't trust my ex-spouse anymore to distribute the money properly. I don't think they're ever going to get it.


But you know, if I do that and they're three years old now, I'm dealing with probate and so my ex-spouse and guardian estates for each minor child. Yep, but I don't really want to put it in my spouse's name or ex-spouse's name, because I don't trust my ex-spouse. So this sounds using trusts as a vehicle sounds like it could be a really great option and avoid arguments.

Lindsey Paige Markus Guest


Absolutely. It avoids conflicts between the parties, it clearly lays out the terms and conditions and can also have a material effect on potential taxes.

Karen Covy Host


This has been so enlightening and so eye-opening and honestly, I think that so many people are going to get a tremendous amount of value from this. But if they do and they're saying, hey, where can I find Lindsey?

Lindsey Paige Markus Guest


Oh, please reach out. My email is [email protected]. Or if any of these topics piqued your interest and you want to read more, learn more. My book, a Gift for the Future Conversations About Estate Planning, is available on Amazon and you can usually get it in 48 hours, so I hope you enjoy it and I would highly recommend it and I love.

Karen Covy Host


Just as an aside, it has nothing to do with anything, but I love that you've named the characters Jack and Diane. I just think I got a kick out of it.

Lindsey Paige Markus Guest

That's me and my crazy sense of humor.

Karen Covy Host

But, Lindsey, thank you so much for everything you've shared and for those who are listening, Marcus is with a K, correct. Yes, so it's M-A-R-K-U-S. If you want to check out Lindsey, everything is going to be linked. The link to buy the book on Amazon will be in the show notes. Where to find Lindsey will be in the show notes. Everything will be there, Lindsey. Thank you so very much. I really appreciate this.

Lindsey Paige Markus Guest


As do I. Thank you for the time.

Karen Covy Host


You're welcome and for those of you who are out there listening or watching, please do me a big favor. Those of you who are out there listening or watching, please do me a big favor. If you like this video, if you like the podcast, give it a thumbs up, like subscribe, and I look forward to talking with you again next time.

Head shot of Karen Covy in an Orange jacket smiling at the camera with her hand on her chin.

Karen Covy is a Divorce Coach, Lawyer, Mediator, Author, and Speaker. She coaches high net worth professionals and successful business owners to make hard decisions about their marriage with confidence, and to navigate divorce with dignity.  She speaks and writes about decision-making, divorce, and living life on your terms. To connect with Karen and discover how she can help you, CLICK HERE.


divorce financial planning, estate planning and divorce, off the fence podcast

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