Estate Planning and Divorce
March 27, 2023
Going through a divorce is no easy task. Dealing with the legal ramifications of a separation can become overwhelming. That is why getting the right legal counsel helps people going through a divorce get their affairs in order. In particular, estate planning is a crucial matter to sort out when divorcing.
The Law Office of Geoffrey Fong specializes in helping the people of Rocklin, California, get the legal counsel they need to plan their estate following a divorce. The estate planning attorney proudly serves surrounding areas, including Roseville, Folsom, and Citrus Heights, California.
How Divorce Affects Estate Planning in California
While California shows relatively low divorce rates among states in America, it is still a prevalent phenomenon. According to 2019 data, the divorce rate among women in California stood at 6.50% per 1,000 married individuals. While this data is among the lowest in the country, it is, nonetheless, a sign of an unfortunate issue to address.
That is why understanding how divorce affects estate planning is crucial. Divorce can have a significant impact on estate planning in California. Thus, it is vital to review and update an estate plan after a divorce to ensure that the individual’s wishes are still reflected and that assets are distributed according to current intentions.
Divorce can affect estate planning in California in the following ways:
Revoking a Spouse's Inheritance Rights
A divorce revokes your spouse's right to inherit from your estate as your surviving spouse. Therefore, it is important to update your estate plan to reflect this change.
Changing Beneficiary Designations
Failure to update beneficiary designation could result in an ex-spouse receiving assets despite the individual’s intentions.
Guardianship of Children
A divorce may affect who will care for minor children if a parent passes away. You may want to revise your estate plan to name a new guardian or to specify who should not serve as a guardian.
Distribution of Assets
Divorce may affect how you want to distribute your assets after passing away. For example, an individual may want to change the percentages of assets given to children or name a new charity as a beneficiary.
Updating Powers of Attorney and Advance Health Care Directives
If an ex-spouse was named as an agent under a power of attorney or advance health care directive, updating these documents is necessary to reflect new wishes.
Updating an Estate Plan After a Divorce in California
Updating an estate plan after a divorce is an essential step to ensure that assets are distributed according to current wishes and to avoid unintended consequences. Here are some other points to consider:
Update a Will or Trust
You are encouraged to update a will or trust to reflect new wishes. It is recommended to change the beneficiaries or revise the distribution of assets.
Guardianship of Minor Children
If there are minor children, the parties will need to update a will or trust to reflect their new wishes regarding guardianship.
Powers of Attorney and Advance Health Care Directives
Powers of attorney and advance health care directives may need to be updated to reflect changes in wishes following a divorce. In particular, naming a new representative is a key consideration.
Retirement Accounts and Life Insurance
Individuals are encouraged to update any beneficiary designations on life insurance policies, retirement accounts, and other assets to remove an ex-spouse and name new beneficiaries.
What Happens to a Trust in a Divorce?
In general, several things can happen to a trust in a divorce:
If the trust was created during the marriage, or if marital funds were used to create or fund the trust, it may be considered marital property and subject to division as part of the divorce settlement.
If the trust was created before the marriage or if it was created using separate property, it may be considered separate property and not subject to division in the divorce settlement.
The terms of the trust may guide how the trust assets are to be distributed in the event of a divorce. For example, the trust may provide that the assets are to be distributed to the beneficiaries regardless of a divorce, or it may provide that the assets are to be divided between the spouses in the event of a divorce.
If the trust was created during the marriage, it may be considered marital property. So, it may need to be revised as part of the divorce settlement. For example, the trust may need to be divided between the spouses, or the terms of the trust may need to be modified to reflect the new circumstances.
Get Reliable Legal Assistance Today
It is important to review and update your estate plan after a divorce to ensure that assets are distributed according to current intentions to avoid unintended consequences. It is always a good idea to work with an experienced estate planning attorney to ensure that an estate plan reflects wishes and meets specific needs.
Thus, working with an experienced estate planning attorney is crucial to understand how an estate plan may be affected by divorce and what steps need to be taken to ensure the estate is properly managed.
At the Law Office of Geoffrey Fong, we strive to help our clients address their estates following a divorce. Don’t face divorce alone. Get the right legal counsel on your side. Talk to a knowledgeable estate planning attorney today. The firm proudly serves surrounding areas, including Rocklin, Roseville, Folsom, and Citrus Heights, California.