In this interview, divorce‑mediation attorney Scott Levin talks with tax, estate‑planning and asset‑protection lawyer Rod Hatley about how estate planning intersects with divorce. Hatley explains the concept of a “divorce will,” which lets a spouse direct their half of community property to children or other beneficiaries rather than the former spouse. He discusses the limitations of existing living trusts during the pendency of a divorce and why the optimal time to create or revise a full estate plan is after the marital settlement is finalized. The conversation covers practical steps for clients: establishing separate living trusts for each spouse, using pour‑over wills, naming guardians for minor children, and setting up powers of attorney and healthcare directives. Hatley also addresses co‑ownership of real estate after divorce, recommending that each spouse hold their share in a personal trust and own the property as tenants‑in‑common to avoid community‑property complications. He highlights the importance of incapacity planning—how a living trust can prevent the need for a conservatorship—and the benefits of trusts in avoiding probate, compared with wills which always require probate. The interview concludes with Hatley’s contact information for prospective clients.
Chapters
Hi, everyone. This is Scott Levin, Chief Peacekeeper. I'm an attorney mediator that helps people divorce outside of court amicably, and with the hope that they don't hate each other at the end, especially if they have kids. Always good to be able to co-parent. I'm honored today to be joined by a friend and colleague named Rod Hatley. Rod is someone that I've worked with and known for A long time, and I can't think more highly of Rod. Can you introduce yourself? And thanks for being here.
Yeah, thanks, Scott. Thanks for the opportunity. I'm Rod Hatley. I'm a tax, estate planning, and asset protection attorney based here in San Diego. And my philosophy— and I actually have this trademark— estate planning viewed through the lens of asset protection, because we want to make sure that when we're planning our clients' estates, that we're at least giving some thought to Protecting those assets so that when they get downstream to the kids or the grandkids or whatever, they're protected from later lawsuits and/or divorcing spouses.
Yeah, and, and you— and Rod, if you look online, of course, uh, the, uh, he has 5-star reviews all over the place. And but just in the legal, uh, network, uh, obviously we run in, uh, you know, there's— San Diego is, uh, is not a huge community. It's actually feels kind of like a small town if you aren't It really is. From outside of San Diego, and the legal community is tight and small, and Rod's reputation is really top of the line. So I think, you know, I kind of wanted to introduce the, the, the, the, the where family law and estate planning kind of intersect.
Sure.
Working in mediation, my clients often are making obviously decisions about assets. And debts moving forward. And some of them have estate plans in place already that need to be revised, obviously, if they're, if they're divorcing, and some don't have estate plans. But now that they will be 2 separate individuals, it's a time to look into it. So my guess, Rod, my first question for you is, if I have clients going through divorce and they're working in mediation, when do you think the time— when do you think is the best time for them to reach out to you? So that they can make, you know, the best decisions during the divorce and obviously after.
Okay, great question, Scott. I think there is something that's called a divorce will. So let's say mom and dad are getting divorced. Mom may have particular desires. In other words, she wants to not provide for her soon-to-be former husband. And so she can do a will That will say, basically, if something happens to me, then I want whatever my half of the community property is, I want it going downstream to my kids.
Hmm.
And, you know, now let me back up just a moment. Now, if a married couple has a living trust in place, which we hope that they do, but if they do, that we can't change that because there's an automatic stay when you file that divorce petition. So, but that there is no, there's no prohibition against saying, look, if something happens to me as one of the spouses, then I want to leave my half of the community property and any separate property that I have to my children. I don't want it going to the other spouse. So that can certainly be done.
Great information.
I've seen that done in other cases before. So anyway, that's one way to deal with that. Now, Once the divorce becomes final and the marital settlement agreement is signed off on, et cetera, the parties go their separate ways. Perfect time, especially for, let's say, the wife, if she was not the primary breadwinner, to get a plan in place. If she's also the custodial parent, she really wants to make sure she's got a good plan in place. She may have been awarded the home, or maybe if the home was sold, she will possibly use those proceeds to buy a home for herself and the kids. And so that should go into the trust. And also she should nominate in her will, pour-over will, who the guardians for her kids would be. I mean, obviously the surviving, you know, if the husband survives, I mean, he'd be the obviously the natural choice. But should he not be available, then she could say, well, yeah, I would want the kids to go to whomever. These people would raise them and love them. instill the values that I hold dear to them, etc. So that can be a way to proceed. So, so it's kind of like 2 time periods here. One is during the pendency of the divorce. A divorce will could be undertaken. And then, of course, when that matter concludes and the dissolution is finalized, then it'd be a perfect time to do a regular full-blown estate plan, including All the other documents that we, you know, would want, like a power of attorney, healthcare directive, HIPAA. And if there are minor kids, I mean, we can do some great planning for them too. So if they have to, if mom isn't around, then there's a way for the kids to be taken care of, go to the hospital, etc. So hope that that makes sense.
Yeah, obviously we're just going to have a few questions today, but you can hear how, how knowledgeable and easy Rod breaks things down. Rod, Some of my clients desire to continue to co-own real estate together after the divorce. That's something that happens basically if they want the kids to stay in the house with one parent but continue to co-own the property. From your perspective, if a couple were to do that, would there be an estate if they didn't have estate plans in place, or if they had estate plan trust in place during Prior to the divorce, but they were going to continue to co-own property. Are there any unique issues there that you that you see?
Well, I mean, you know, certainly it's a counseling issue, and that probably would have come from you to determine. You know, should should the spouse that you're representing should he or she continue to co-own property with the other spouse or the soon-to-be ex-spouse? It could make sense, and if it's agreeable. And ideally, if they're working with you, it is agreeable, then, you know, it may not be a bad idea, although the pitfalls are, well, you know, you'd want that property owned, and I'd recommend each of the spouses have a living trust to own their respective half of property.
So in that case, if they each had a living trust, if one passed on while the co-ownership was taking place, similar to the divorce will, they could designate their interest to pass down how they'd like.
Right, because it's not going to go by way of community property because it's all been severed.
Correct.
Yeah, they could definitely have their respective trusts own it as, you know, tenants in common. And then of course, the spouse who died, assuming he or she had a living trust that owned his or her portion of property, let's call it a half, then they can, you know, leave a specific bequest in that Trust documents saying, this is where I want my half of the property to go, which could be to say the children, the joint children that they have together.
So, and that's really the purpose of a trust generally for people that don't really understand them. Generally, it's a way for you to designate how you want your assets or anything else that you own to pass down in the event of your death. Is that the— is that how would you—
And let's get just a little more.
more granular. Yeah.
I don't want to get too deep in the weeds here, but there are really 2 things that we have to be concerned about. First of all, you know, incapacity, mental incapacity as a result of an injury or disease. A living trust becomes effective now when you sign it. And if I pick on— picking on myself, if I became incapacitated mentally, then I've already got a plan in place. I don't have to— someone doesn't have to put me in front of the probate court judge downtown and say, Your Honor, this is Rod. He's incompetent now to manage his affairs. Please appoint me to be his conservator, which is really a guardian for a grown person. But so that's one concern. The other concern is passing on, and we will all die at some point. So having a plan in place takes all the guesswork. And, you know, I've been through a 7-year probate after my father passed away, and that's not what my father wanted, but my father had leukemia. So at that point in his life, he was making emotional decisions, and you can understand why. So, if we can get out ahead of this, we can frame up a great plan that'll avoid the conservatorship. So no probate, and also avoid the death probate when someone passes away. So, and here's the big insight: wills only become effective when you die. They don't take effect— well, you sign them now, but they won't spring into effect until you pass. They don't provide any avoidance of conservatorship. And that sort of thing. So, and it guarantees probate too, because wills have to go through probate. So, but trust don't. So anything done by the trust will avoid the conservatorship, avoid the probate, and it just leaves everything in the hands of the family, which I think is a much better answer. Again, anytime I can keep a client out of a probate court situation is a good day in my book.
And that's great. And Rod, we'll wrap up now, but can you— how can people find you? Where do they go to learn more?
Thanks, Scott. Go to the— find us on the web, www.hatleylawgroup.com. And for those who would like to schedule a 15-minute breakthrough call, that's to find out, you know, would we be a good fit to work together, 858-465-8001. 858-465-8001.
All right, Rod. Well, thank you so much for being here. Really great information. I love the divorce— I love the divorce will that you mentioned. That's real smart. And I actually need to integrate that a lot more in my practice because although my cases are relatively, you know, people work actively with me for, you know, 2, 3 months. So it's not the long-term litigation that you see. Any divorce lawyer that's watching this that has those 2, 2.5-year divorce cases routinely going on, I mean, obviously anything can happen in that period. And that divorce will is really, really smart. Great, great insight.
