When a marriage is dissolved, it is important to understand how it affects your estate plan. There are two critical aspects that should be understood: the impact of California law on estate planning, and personalized changes that should be made by divorcees.
The Impact of California Law
In California, the law states that when a divorce is finalized your ex-spouse is automatically removed as a beneficiary - he or she will receive no property or gifts that were a part of your estate plan (unless stated otherwise in your documentation). By default, that property would be dispersed to an alternate or residuary beneficiary listed in the will. If there are none, the court will distribute the property per the state's inheritance laws.
Also, unless stated otherwise, your ex-spouse can no longer serve as the executor of your estate or have power of attorney.
Please note that this applies to wills but not necessarily other estate planning documents, such as life insurance policies or retirement accounts which require separate beneficiary updates (see "Why Proper Asset Titling is Critical to Your Estate Planning").
Changes You Need to Make
You will need to update your estate plan immediately following a divorce to reflect your current wishes. If you fail to do so and then pass away, it can lead to expensive and time-consuming litigation for your heirs. There are several key items to consider:
- Updating your will and living trust. This includes reviewing all beneficiaries and executors, and ensuring proper disposition of assets previously held jointly with your ex-spouse and any assets held in trust.
- Updating Power-of-Attorney and Advanced Health Care Directives. Determine who should now handle these critical decisions.
- Disinheriting your spouse from any insurance policies or retirement plans in which he/she is named as beneficiary.
- Update named beneficiaries on life insurance policies, retirement accounts, bank accounts, and other financial accounts.
Specialized Estate Planning Expertise
This is a complex area of law, so it is important to consult an experienced estate planning attorney in order to protect yourself and your heirs, and give you peace of mind in knowing that your wishes will be honored.
If you are going through a divorce and are concerned about estate planning, Mortensen & Reinheimer, PC understands and can help you. If you need legal expertise in addressing your specific estate planning needs, please contact Mortensen & Reinheimer, PC at (714) 384-6053 to make an appointment, or use our online contact form. Our website is http://www.ocestateplanning.net.
About the author:
Tamsen R. Reinheimer, Attorney, is a Certified Specialist in Estate Planning, Trust & Probate Law (The State Bar of California Board of Legal Specialization). She has significant experience in all aspects of estate planning, trust administration, and probate. Contact Tamsen at tamsen@ocestateplanning.net.