Disclaimer: This article does not constitute legal advice. If you have any questions about your individual situation it is best to seek the advice of an experienced legal professional.
Estate Planning is an overlooked but important aspect of divorce. States have different laws that determine what aspects of your estate planning are revoked upon your divorce. In a California divorce, your Will is automatically revoked upon your divorce decree. It’s important to remember however that a Will usually only controls a small portion of your overall estate planning. Other estate planning instruments and assets like powers of attorney and bank accounts are be included in the will. Different beneficiaries may be named on these accounts and different decision-makers could be legally empowered to make decisions on your behalf. You need to address these intentionally during your divorce so your assets are distributed to the people you choose.
Trusts
In California, divorce does not revoke trust powers, so assets in a trust could go to your ex spouse. If you would prefer assets in a trust to go to children or other relatives, divorce is the time to make important changes to your trust powers and/or beneficiaries. Divorce can be a good time to reevaluate plans for your minor children, including planning for their future security, college and/or schooling expenses. You may also decide to give to a charity or provide for other relatives using a trust.
Beneficiary Designations
Beneficiary designations on bank accounts, life insurance policies, brokerage accounts, retirement accounts and other accounts are treated separately from the Will. The institution associated with these accounts will transfer the assets to the person named as a beneficiary. As you work on asset division in your divorce, you will need to confirm that whoever is the named beneficiary of these accounts is the person that you want to receive these assets.
Power of Attorney and Healthcare Directives
While you may have been close to your spouse during your marriage, you likely want someone other than your ex to make health decisions or manage your finances if you are incapacitated. California revokes powers of attorney after divorce, but you will need to nominate a new person to replace them. You should change legal documents such as medical and powers of attorney to appoint someone you trust to make financial and medical decisions on your behalf.
Life Insurance Policies
Divorce may be a good time to reevaluate your life insurance policies as part of your estate planning. During a divorce you will likely need to reevaluate both your life insurance coverage and the beneficiaries of life insurance.
A Shared Business
If you and your spouse are in business together it’s important to make provisions for your business if one of you dies. If you are getting a divorce, these considerations become more complex, as one spouse may want to exit the business and there may be a buy/sell agreement predicated on divorce. You and your divorcing spouse may want to make new plans for who inherits the business in the event of the death of its owner or owners.
Divorce Mediation, Divorce Planning and Estate Planning
It’s easier to undertake thoughtful divorce planning if you can work with your divorcing spouse as part of a non-adversarial divorce process. Divorce mediation facilitates a conflict-free process in which you can work out important details of your divorce. Non-adversarial divorce helps you increase your wealth rather than dissipate funds on expensive litigation. It is ideal for high asset divorces where there are complex assets that require an organized approach to property division. Estate planning is an important part of these considerations. It can help you plan to take care of children or relatives or achieve financial or charitable giving goals.
At Divorce Options San Diego, we are experienced, financially qualified West Coast Divorce Mediators who are adept at handling high asset complex divorce. We streamline the process of your divorce to make it more efficient and reduce conflict. As part of the divorce process we handle all documentation. We work with divorcing spouses nationally, internationally and in California. We can meet with you in person at our offices in San, Diego, CA, Berkeley, CA and Silicon Valley, or consult with you remotely, as desired. Please contact us to learn more about our West Coast Divorce Mediation services.
