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Divorce & Estate Planning

by | Oct 5, 2023 | Firm News

Divorce is a difficult and emotional experience that affects multiple aspects of your life including your finances, property, and legal agreements. One of the most important considerations during a divorce is estate planning. As soon as you are contemplating filing for divorce you should be thinking about estate planning.  There are certain actions you can take regarding your estate planning prior to filing for divorce. It is important to work with an experienced attorney who understands both divorce and estate planning law in California. They can help you navigate the complexities of the legal system.  Once you file for divorce you are prevented from taking certain actions related to your estate plan.

In California, when you file for divorce the Standard Automatic Temporary Restraining Orders are implemented (ATROs).  Therefore, you are restrained from taking certain actions such as (1) cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobiles, and disability, held for the benefit of the parties and their minor children.  You are restrained from (2) transferring, encumbering, hypothecating, concealing, or in any way disposing of, any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life. And you are restrained from (3) creating a non-probate transfer or modifying a non-probate transfer in a manner that affects the disposition of the property subject to the transfer, without the written consent of the other party or an order of the court.  Before revocation of a non-probate transfer can take effect or a right of survivorship to property can be eliminated, a notice of the change must be filed and served on the other party.

The above restraints dictate what you can and can’t do regarding estate planning once a Petition has been filed and the summons served.  For example, you could create a will, but you could not revoke a prior trust created without notice and consent from the other party.

Additionally, certain laws dictate how property is divided during a divorce, but it is important to note that these laws do not govern how property is distributed after death. If you do not have a will or trust in place, your assets may be distributed in ways that do not align with your wishes.  Therefore, after your divorce, it is essential that you update beneficiary designations and create an estate plan.  Providing your marital settlement agreement (MSA) to your estate planning attorney is important to ensure you do not violate any of the provisions determined in that agreement.

If you created estate planning documents with your former spouse it is important to revoke those documents and create new documents for yourself.  California Probate Code section 6122 – 6122.1 as a matter of law revokes the disposition of assets and appointments, but it is still important to take the formal step of revocation.  One of the most important things to consider during estate planning after a divorce is who will receive your assets if you pass away. You will also need to make decisions about whom to appoint as executor of your estate, guardians for your children, and trustees of your trust.  While it is always a good idea for parents to coordinate guardians, it is not always practical for the parties to communicate on this particular issue. Regardless, it is important to consider the impact of your estate plan before filing for divorce as well as once your divorce is complete.