Estate planning after divorce in California is an important step that many people overlook. Divorce changes more than your marital status. It can also affect who inherits your property, who manages your finances, and who makes important medical decisions if you become incapacitated.
Many people spend considerable time completing their divorce but overlook an equally important task: reviewing their estate planning documents.
If you have a living trust, will, power of attorney, or advance healthcare directive, your documents may no longer reflect your wishes after a divorce.
Does Divorce Automatically Change Your Estate Plan?
California law provides certain protections when a marriage ends. For example, Probate Code Section 6122 generally revokes provisions in a will that leave property to a former spouse or appoint that person to certain positions, unless an exception applies.
Most importantly, removing a former spouse from an estate planning role does not automatically appoint someone new.
That is why reviewing your existing documents after a divorce is so important.
1. Review Your Living Trust
If you and your former spouse established a joint living trust during your marriage, the trust may need substantial changes.
Consider the following questions:
- Who will serve as your successor trustee?
- Who should inherit your assets?
- Does your trust still refer to your former spouse?
- Have the assets awarded to you in the divorce been properly identified and transferred?
- Would a new individual living trust better reflect your current circumstances?
Depending on the trust provisions and divorce judgment, an existing trust may need amendment, revocation, or replacement.
An attorney should determine the appropriate legal approach when there are questions about trust ownership, division of assets, or the effect of the divorce judgment.
2. Update Your Will
Your will should reflect your current family circumstances and wishes.
Even though California law may automatically revoke certain provisions involving a former spouse, an outdated will can create confusion or leave important appointments unfilled.
Review the people named to serve as executor and any alternate appointments. Also consider whether your intended beneficiaries have changed.
If you have children, your will and living trust should work together to reflect your wishes concerning their inheritance.
3. Review Your Financial Power of Attorney
A durable power of attorney allows someone you select to manage financial matters on your behalf under the conditions stated in the document.
During marriage, many people appoint their spouse as their financial agent.
California law generally terminates a former spouse’s authority under a power of attorney following dissolution of marriage, subject to applicable exceptions.
If your former spouse was your only designated agent, you may need a replacement.
Preparing a new power of attorney allows you to identify someone you currently trust and name an alternate if appropriate.
4. Update Your Advance Healthcare Directive
An advance healthcare directive identifies the person authorized to make healthcare decisions for you when you cannot make those decisions yourself. It can also record your healthcare preferences.
Many married couples designate each other as their healthcare agents.
After divorce, it is important to review that appointment and select someone who understands your wishes and is willing to carry out the responsibility.
You may also wish to update emergency contacts and provide your healthcare providers with copies of your current directive.
5. Check Life Insurance and Retirement Beneficiaries
This is one of the most frequently overlooked areas of post-divorce planning.
Life insurance policies, retirement accounts, annuities, and certain financial accounts often have beneficiary designations that operate separately from your will or living trust.
Do not assume that your divorce automatically removes your former spouse as a beneficiary.
Life insurance and federally governed retirement plans can be subject to different rules. Your divorce judgment may also require you to maintain particular beneficiary designations or insurance coverage.
Before making changes, review your judgment and contact the appropriate financial institution or plan administrator. Seek legal or financial advice when necessary.
6. Make Sure Real Estate Ownership Is Correct
If your divorce settlement awarded you a home or other real property, the ownership shown in county records should be reviewed.
A divorce judgment does not necessarily mean that all necessary deeds have been prepared and recorded.
Depending on the circumstances, additional documents may be needed to reflect the ownership established by the judgment or to transfer property into a new living trust.
Real estate transfers can involve property tax, title, and other legal considerations. Questions concerning the appropriate transfer or its consequences should be directed to a qualified attorney or tax professional.
7. Protect Your Children’s Inheritance
For parents, estate planning after divorce can be especially important.
A living trust can establish instructions for managing an inheritance for minor children or young adults.
For example, a trust may provide for funds to be used for a child’s health, education, maintenance, and support while postponing outright distributions until specified ages.
You can also designate a trustee to manage those funds according to the trust instructions.
It is important to distinguish management of inherited property from custody of a child. A living trust does not override the surviving parent’s legal rights regarding custody.
8. Don’t Wait Until Another Major Life Event
Estate planning documents should reflect your life as it exists today.
Divorce, remarriage, the birth of children or grandchildren, changes in property ownership, and the death of a named beneficiary or trustee are all reasons to review your documents.
Even if your divorce was finalized years ago, it is not too late to examine your existing estate plan.
A Simple Post-Divorce Estate Planning Checklist
After your divorce, consider reviewing:
- Your living trust and successor trustee appointments
- Your last will and testament
- Your durable power of attorney
- Your advance healthcare directive
- Beneficiary designations on financial accounts and insurance policies
- Real property deeds and ownership records
- Trust provisions concerning children and other beneficiaries
A little attention to these documents now may help prevent confusion and unnecessary complications for your loved ones later.
TEAM Legal Document Services Can Help
For more than 30 years, TEAM Legal Document Services has assisted customers in Thousand Oaks, Ventura County, and surrounding communities with affordable legal document preparation.
We prepare living trusts, trust amendments, wills, powers of attorney, advance healthcare directives, and real estate deeds at our customers’ direction.
Our services are handled electronically, making the document preparation process convenient and accessible.
If your estate planning documents have not been reviewed since your divorce, now may be a good time to give them another look.
Contact TEAM Legal Document Services to learn more about our document preparation services.
Telephone: 805-371-7575 or 800-524-6801
Email: info@legaldocs101.com
Website: https://legaldocs101.com
Important Notice: TEAM Legal Document Services is not a law firm and does not provide legal advice, tax advice, or legal representation. We prepare legal documents at the customer’s specific direction. If you have questions about your legal rights, interpretation of a divorce judgment, or which documents are appropriate for your circumstances, consult a licensed California attorney.