Going through a divorce can be a very rough time in life. Battling over income, assets and child custody can be quite exhausting. All of these distractions may cause you to miss many important tasks you must undertake. And very often the family law attorney who handles your divorce may not follow through to give you the vital information we discuss here.
California law provides that any bequests to a former spouse under a Will is automatically revoked. While this is what most people desire, it isn’t always the case. We have seen more than a few “amicable” divorces when one or both of the former spouses still want to benefit the ex-spouse upon death. Even if you do want your ex-spouse removed from your Will, remember that California does not necessarily provide that your assets will automatically go to who you want them to go to. So, you will likely need to update your Will during or after your divorce to give instructions on how to distribute your estate.
In addition, California law provides that your ex-spouse is automatically removed as the executor of your Will. Again, this may be what you desire. But perhaps not. If you have minor children you may want your ex-spouse to supervise the administration of the estate and look over the children’s inheritance until they reach an age that you designate. At Sandoval Legacy Group, we generally recommend against children receiving inheritances at age 18. After discussing this with our clients, most clients chose that the children do not get full control of the assets until they reach 25 – 35 years old. If your existing Will does not have a successor executor named after your spouse, or if you no longer wish to have that person serve as executor, you will need to update your Will. All these are reasons to review your Will before your divorce is final or as soon thereafter as possible.
Most of our clients have a trust in addition to a Will. This is most likely because they are trying to avoid probate. Like a Will, California law provides that any bequests to a former spouse under a trust are automatically revoked. For the same reasons stated above, you may need to update your trust to indicate your new beneficiaries, or if you intend to benefit your ex-spouse, to reinstate him or her as a beneficiary. Again, it is best to put these changes into place before the divorce is final. If you pass away during the divorce proceedings and the divorce never becomes final, your ex-spouse may benefit. If this is not your desire, you need to see an estate planning attorney as early in the process as possible.
California law also provides that your ex-spouse is automatically removed as the trustee of your trust. The trustee is the person charged with carrying out your wishes expressed in the trust. Many of our clients what to remove their ex-spouse as trustee, but some want to retain the ex-spouse as trustee to carry out their wishes—whether or not the ex-spouse is a beneficiary or not. As we indicated above, this is sometimes the case where you are leaving an inheritance to minor children that your ex-spouse is the parent.
It is also not that unusual that we hear from clients that even though they have divorced their spouse, they still trust him or her more than anyone else in their life to carry out their wishes. Whether you want to designate your ex-spouse as trustee or eliminate him or her and designate other trusted individuals, be sure to consult with an experienced estate planning attorney as early in the marital dissolution process as possible.
Your Power of Attorney and Advance Health Care Directive
A power of attorney and advance health care directive are vitally important documents to assure that your assets and liabilities are handled in the event of your incapacity and that your personal and health care wishes are honored. California law again assumes that you would not want your ex-spouse handling your finances and making personal and health care decisions for you after your divorce is final. For many persons this is the case, but not for all.
If you want to designate other parties to handle your financial and personal affairs, you will need to create new documents to name them as your agents. It you want your ex-spouse to assist with managing your finances and/or health care decisions even after your divorce, you will need to create new documents to reinstate him or her to that position. Just keeping your old documents will not work as they would be dated before your divorce is final and therefore California law would automatically revoke the designation of your ex-spouse as agent under these key documents.
Most of our clients who have divorced end up getting remarried (usually to different persons). Going into the marriage, each of the spouses may want to keep the assets he or she bring into the marriage separate but want to have any assets purchased after the marriage jointly owned. Each spouse may or may not want their separate assets to benefit their new spouse after death, but they almost always want to assure that any remaining assets are distributed only to his or her children. Assets that are purchased during the new marriage are generally retained for the benefit of the surviving spouse but may be divided up in any number of ways upon the surviving spouse’s death.
To simplify this type of estate planning, the Sandoval Legacy Group often recommends a “His, Hers, and Ours” estate plan. Husband places all of his separate assets in “His” trust and designates who manages the assets upon his death or incapacity as well as who benefits from the trust. Wife places all of her separate assets in “Her” trust and designates who manages the assets upon her death or incapacity as well as who benefits from her trust. Any assets acquired during the marriage are owned by the joint trust, managed jointly by both spouses during life and capacity. Upon the death of the first spouse, there is usually provisions for the care of the surviving spouse. Upon the death of the surviving spouse the remaining trust assets are distributed between the two “families” as the two spouses agree. Not only does this structure simplify the planning, it also helps assure that separate assets remain separate and don’t become co-mingled and converted to community property during the marriage (unless that is desired at a later time).
While this article has been discussing husbands and wives, gay and lesbian couples who marry and subsequently get divorced are faced with all the same issues as their heterosexual counterparts. We have many gay and lesbian couples among our clientele and the Sandoval Legacy Group is proud to have been a pioneer in serving the LGBT community with their estate planning since long before gay marriage and domestic partnership became the law of the land.
Holstrom, Block & Parke Can Help
Most of our readers are aware that the Sandoval Legacy Group is now a division of Holstrom, Block & Parke, A Professional Law Corporation, one of the largest and most respected family law firms in Southern California. We are proud that we can service their family law clients with putting together their new estate plans after divorce or upon remarriage. And we are happy that we can refer our estate planning clients who have a need to the excellent family law attorneys that are now a part of our team. Call us at 951-787-7711 for any estate planning needs or for a referral to an experienced family law attorney.
Have a question? Ask Dennis.
- “Omitted Children” Fall Flat in Challenge to the Hugh O’Brian Estate - August 31, 2020
- Telehealth is problematic for many older adults - August 24, 2020
- How Might Estate Plans Be Challenged? A Complete Guide - August 18, 2020