Essential Estate Planning Moves to Consider If You’re Getting Divorced in California

As you go through the challenging transitions of a divorce, it is difficult to grasp all the details and moving pieces. While you may not be thinking about the future financial implications divorce can have during this life transition, there are many essential estate planning moves to consider if you’re getting divorced in California. Your spouse is likely named on many documents in your estate plan, so you’ll need to update them to reflect your current wishes.

Estate Planning Moves to Consider After Divorce

Divorce can be a tumultuous time in your life. With the many legal documents, hearings, and changes of homes and life routines, it may seem like the last item on your list is to review and update your estate plan. However, this should not be overlooked or go unprioritized. Your financial future is your security, so it is essential that you assess and address your long-term goals to ensure they are aligned with your current realities. Consider the following tips:

• Make a New Will: This is a good opportunity to make a new will and update your beneficiaries. While many jurisdictions will not allow an ex-spouse to inherit after there is a legal separation or divorce decree, it is crucial to update all important documentation with current information.
• Change Your Power of Attorney and Health Care Agents: If your ex-spouse was your designated agent in powers of attorney for healthcare and/or financial decisions, it is necessary to revoke those powers. Take the initiative to determine an updated agent whom you can trust to make decisions on your behalf.
• Review and Update Beneficiary Designations: Update any beneficiary designations on your retirement accounts, life insurance policies, bank accounts, IRAs, annuities, and any other assets or accounts that have your ex-spouse as the beneficiary.
• Initiate Asset Protection Strategies: Take steps to safeguard your wealth by creating things like asset protection trusts. Before getting remarried, consider creating a prenuptial agreement. It is never too soon to employ protection tools and strategies to safeguard your future.
• Speak With a Lawyer: Consult an experienced estate planning attorney to ensure your estate plan accurately reflects and supports your post-divorce goals and wishes while also complying with relevant regulations and laws. It can be hard to understand the full scope of possibilities and responsibilities that are essential to consider after a divorce, so the support of an estate planning professional can prove vital.

What Is Included in an Estate Plan?

An estate plan is a powerful set of legal documents and strategies that are designed and implemented to manage and distribute an individual’s assets and personal affairs during their lifetime and after their death. There are specific types and levels of tools individuals can employ to protect their wealth and their wishes through estate planning. When going through a huge life transition, such as a divorce, it is an important and pivotal moment to review these items:

• A Will: A will is an essential piece of an estate plan, as it is the legal document that outlines and details how you want your assets to be distributed after your death. Wills often include provisions for minor children by naming a guardian to care for them in the event of your incapacity or death.
• A Trust: Trusts are similar to wills in that they detail how assets and future financial planning are handled, but different types of trusts initiate action while you are still living and provide benefits such as minimizing taxes, the ongoing management of assets, probate avoidance, and more.
• Power of Attorney: Estate planning involves giving someone power of attorney. This is an individual who is legally allowed to make health and financial decisions on your behalf if you become incapacitated.

FAQs

Q: How Can Divorce Affect Estate Planning?

A: Divorce can affect estate planning in many ways, especially if your spouse is listed as a beneficiary on your will, trust, retirement accounts, or life insurance policies. While divorce may automatically revoke a spouse’s beneficiary status in certain jurisdictions, this is not always the case. Divorce often requires the division of marital assets, and if a couple has a majority of shared or joint assets, this can have serious implications on estate planning.

Q: How Do I Keep My House in a Divorce in California?

A: To keep the house in a divorce in California, there are a couple of ways a spouse can proceed. The most common arrangement is by buying out the other spouse in order to keep the jointly owned property. If there are minor children living at home, the custodial parent may get exclusive access to the house for an allotted period of time.

Q: How Does a Divorce Affect a Will in California?

A: Divorce can affect a will in California in many ways, such as impacts on asset distribution, the appointment of fiduciaries, guardianship arrangements, and more. While divorce may automatically remove a spouse from being entitled to your will, it is vital to adjust your will after a divorce to ensure your assets are protected and distributed according to your current needs and wishes.

Q: How Do I Prepare for Divorce in California?

A: You can prepare for divorce in California in many ways, such as by preparing financial documents like bank statements, tax returns, and other relevant financial records, as well as by documenting your assets and property.  Spend time educating yourself on the divorce laws and policies in your jurisdiction.

For example, California law requires one spouse to be a resident for at least six months before filing. Seek legal advice to understand your rights and responsibilities as you move towards divorce.

Contact a California Estate Planning Lawyer Today

If you are going through a divorce or any other major life transition, it is time to update and re-assess your estate plan. At the California Law Firm of Robert G. Petrovich, Attorney at Law, we are ready and prepared to support you at this time. Our trust and estate lawyer has developed a detailed knowledge and understanding of estate planning law, and we have collaborated with and supported generations of clients. Contact us today to set up a consultation.