Married couples seeking divorce have many financial and family issues to sort out, and one of those is making changes to any estate plan already in place. Whether they have a trust where both are the grantor/trustee and primary beneficiary, or if they have traditional wills, all estate planning documents will need to be modified as part of finalizing their divorce.
Since most estate plans will grant most property to the surviving spouse, it is important to amend documents as soon as possible.
What Changes Need to Be Made to Estate Planning Documents?
- Traditional Wills – Both spouses should revoke their wills and make new ones, with a new executor. In California, even if you don’t make a new will, state law revokes any bequests in the will to a former spouse after divorce without affecting the rest of the will.
- Trusts – Revocable trusts should be changed as well to reflect new grantor/trustee names even if the remaining beneficiaries are the same. Irrevocable trusts are more complex and need expert legal advice for amendments.
- Power of Attorney and Living Wills – Powers of attorney for finances and health care in a living will that name an ex-spouse should be revoked and changed to a new trusted individual.
- Beneficiary Designations – Designations in life insurance policies, IRAs, and pay-on-death bank or brokerage accounts need to be changed to new beneficiaries. Many of these assets will be part of any divorce decree and division of property, but it is still important to change the beneficiary name on any account you hold post-divorce.
- Important to note is that once a divorce is filed, there is a temporary restraining order issued which prohibits certain changes and modifications to estate planning documents. While in the middle of a divorce, it is important to know what may or may not be done during that time.
Who is Affected by Changes to the Estate Plan?
Obviously, those most affected are the divorcing spouses, since any rights or assets that are a part of the estate plan will no longer be valid. Those assets will need to be redistributed in the new plan among existing heirs. Minor children are also affected where new trustees or guardians need to be named for management of trust property.
There are many things to consider when going through a divorce, and it is easy to overlook the estate plan. While you may have a divorce attorney handling the marital separation in court, modification and drafting of new estate documents should be done by a qualified estate planning attorney.
Please contact Attorney Andrea Shoup at 951-445-4114 or visit www.ShoupLegal.com if you are contemplating divorce and have questions on how to make sure your estate plan is amended correctly to reflect your new legal status.