November 29, 2010
You’ve decided to file for divorce. You’ve spent countless hours researching online, you’ve done your homework about the proceedings and you’ve even narrowed down an attorney you’d like to work with.
All bases covered, right?
Well not exactly if everything you own is still set to go to your future ex-spouse if you pass away, or if your ex will still be the one legally responsible to make medical or financial decisions for you in the event of incapacity.
In my work as Gold River wills and estates attorney, I see this all the time. People simply find that there’s so much to think about when contemplating divorce (i.e., living arrangements, finances, custody arrangements), that they forget to think about their estate planning and the necessary updates that must be made to ensure their spouse is no longer the beneficiary of their estate.
This is especially true if you have a life insurance policy, retirement accounts, investments, property or even a joint trust with your current spouse. If you fail to take steps to create a single person trust or designate new beneficiaries on your other assets, your ex-spouse will still receive everything you own—even after you are legally divorced.
Similarly, if you don’t create an updated power of attorney and healthcare directive, your soon-to-be ex-spouse will be the only one with legal permission to call the shots if you are permanently or temporarily incapacitated. For most people, the thought of their ex making decisions such as medication administration, life-support or nursing home vs. home care is frightening and that’s why it is so important these issues get addressed at some point before or after the divorce proceedings.
However, there are strict time-frames as to when you can update/amend your estate planning documents during a divorce, so please make yourself familiar with the following guidelines:
Before You File
It’s a good idea to consider revoking and restating all of your estate planning documents before filing for divorce. This includes updating your healthcare directive and financial power of attorney so someone else has the ability to make financial or medical decisions on your behalf if you are not able to. You’ll also want to name new beneficiaries on your life insurance policy and other investments where applicable. Retirement accounts will have to wait until after the divorce is final. If you have a joint trust with your spouse, you’ll need to talk with your Gold River wills and estates attorney to find out whether you must provide notice to your spouse before it is revoked. In California, no such notification is required, which is beneficial for those who want to keep their affairs private from their soon-to-be ex-spouse, but the revocation is only effective for separate property in the trust.
During the Divorce Proceedings
During your divorce proceedings, the ability to revoke your trust or name new beneficiaries on certain accounts comes to a screeching halt. What’s known as an Automatic Temporary Restraining Order (ATRO) will kick in to ensure your assets and ownership interests stay the same until an official division of assets and ownership interests takes place. Therefore, it’s important to note that if you pass away during this time, your soon-to-be ex-spouse will still become the beneficiary of your estate. You can, however, update your will, power of attorney and healthcare directive during this time to minimize the amount of power your ex-spouse would have if something unexpectedly happens to you.
After the Divorce
After the divorce proceeding, you are considered a single person in the eyes of the law. You are free to update, revoke and amend your estate planning documents as you see fit. Yet it’s important to remember that the divorce proceeding itself does not supersede the wishes set forth in your estate planning documents. If you fail to take action and physically remove your ex-spouse from your will or other assets such as your life insurance policy, he or she will still inherit everything they are legally entitled to under your estate planning documents—as outdated as they may be.
When to Get Help
I always advise people in the Sacramento area to at least meet with an estate planning attorney, in addition to their divorce attorney before ultimately filing for divorce. That’s because it’s important for you to know exactly how the divorce proceedings will affect you and/or your children, especially if you become incapacitated or pass away suddenly during the process.
Fortunately, we’ve made the process of meeting with a Gold River wills and estates attorneyeasier than ever. Simply mention this article and we’ll allow you to come in for one of our comprehensive Peace of Mind Planning Sessions (normally $750) absolutely free of charge. We do this because we are passionate about making sure every person has the information they need before getting tangled up in a long divorce proceeding where restrictions are imposed by the court as to how and when you can amend your plan.
To schedule your appointment, call our Gold River estate planning office at (916) 241-9661. Please note, this offer is limited to the first 10 callers so reserve you space today!