Estate Plans and Divorce
Going through a divorce can be an extremely painful and emotionally exhausting experience. Still, it is important to pull yourself together and do what is necessary, so that you can look forward to a better, brighter future.
One of the important steps you need to take after getting a divorce is to revise and update your estate plan. Why is it critical? What kind of changes do you need to make to your plan? Let us take a look.
Importance of Updating Your Estate Plan after Divorce
When you are married, it makes sense to grant your spouse the power of attorney and to name them as your beneficiary so that they could make financial and medical decisions on your behalf if you are not able to and inherit your assets in the event of your death.
Once you get divorced, it makes no sense to allow your ex-spouse to retain the same degree of control of your life. So, you need to update your estate plan so that you can get your ex-spouse out of the picture and designate someone else who can make financial and medical decisions on your behalf – should it come to that.
Updating your estate plan is particularly important if your divorce was contested and if you and your ex-spouse no longer enjoy a cordial relationship.
Moreover, California is a community property state, which means your spouse is theoretically entitled to get 50% of everything you own in the event of a divorce. If you fail to review and update your estate plan, your ex-spouse will inherit more of your assets in the event of your death, which is not what you may want to happen.
What Kind of Changes Do You Need to Make to Your Estate Plan after Divorce?
Updating Your Will
Under California law, any gifts or bequests your will makes to your spouse will be revoked automatically in the event of an annulment or divorce. Still, it’s necessary to update your will after divorce for several reasons.
If you have named your ex-spouse as the primary beneficiary of your assets, you need to remove them to make sure they do not inherit the rest of your assets (what is still left with you after the divorce) in the event of your death.
Similarly, if you have named your ex-spouse as the representative or executor of your estate, you need to remove them and designate someone else.
Apart from this, if your will has provisions for your ex-spouse’s children (from their previous marriage) or their relatives, and if you no longer want them to receive a share of your assets in the event of your death, you need to amend your will accordingly.
Amending Your Trust
Setting up a living trust is undoubtedly one of the best ways to provide for your beneficiaries. But if you have appointed your ex-spouse as the trustee, you need to remove them and appoint a new trustee.
Revoking Your Power of Attorney and Advance Healthcare Directives
If you have designated your ex-spouse as your agent, who can make financial, healthcare, and end-of-life decisions on your behalf, you need to revoke the power of attorney you granted and amend the directive so that you can designate a new agent.
Nominating a Guardian for Your Minor Children
This is a tricky subject, as your ex-spouse might be the other parent of your child(ren) and they have the same rights that you do. However, you need to make sure you nominate a guardian (someone other than your spouse) for your children, so that they can take care of your children in case your ex-spouse is not able to – for one or more of the following reasons:
- They have a physical or mental disability or illness which makes them incapable of caring for the children.
- They have a serious alcohol or drug addiction problem.
- They are unable to or do not want to take care of the children for other, legitimate reasons.
Reviewing and Updating Other Financial Accounts
After the divorce, you need to change beneficiary designations in the following accounts.
- Bank accounts
- Retirement accounts
- Life insurance policies and annuities
- Pay-on-death accounts
- Homeowners’ insurance and auto insurance
Looking to Update Your Estate Plan after Divorce? Contact Our Seasoned Southern California Estate Planning Attorneys
Reviewing and amending your estate plan after a divorce is a complicated, time-consuming task which requires a great deal of legal expertise. The attorneys at Garmo & Garmo have over 80 years of combined experience in estate planning and have helped thousands of clients in California over the years with their estate planning needs.
We can review, revise, and update your estate plan according to your needs and make sure your ex-spouse does not too much of a role in making important decisions should you become incapacitated and/or managing your final affairs.
To find out more about updating your estate plan, call us today at 619-441-2500 or contact us online to schedule a free consultation with a member of our legal team.