After a divorce, many changes will take place automatically due to the divorce decree. The final judgment in a divorce can order property division, custody, child support, and alimony.
But some changes will need action on your part. Some of these changes are simple, like changing your name. But others will require some thought.
Here are some changes you should consider making to your estate plan after your divorce.
Changes to Your Will
Your will provides binding instructions to your executor and the probate court about how to dispose of your property. After you divorce, you should consider preparing and executing a replacement will rather than amending your prior will because of the number of changes you should consider making.
You probably need to change all bequests to your ex-spouse. California law explicitly states that divorce revokes all bequests naming your ex-spouse. But you should still consider executing a new will for a few reasons.
Updating your will to reflect the property you own after the divorce is recommended. You might no longer own property listed in your old will. Updating the will to remove this property will reduce or eliminate any confusion after you die.
You also might want to keep some bequests to your ex-spouse. California law assumes you wanted to completely cut your ex-spouse out of your will. But you might have several reasons to leave property to your ex-spouse in your will.
If you have step-children, you need to decide how to handle their bequests. California law does not revoke their bequests. You must update your will if you want to change what your step-children inherit.
Changes to Your Trust
The automatic revocation provided by California law does not apply to trusts. If you do not update your trust after divorcing, your trustee must follow the original trust document.
This means your ex-spouse will receive property exactly as planned during the marriage. The trustee must act in the interests of the beneficiary. If you named your ex-spouse a beneficiary, the trustee must remain faithful to the trust document and pay your ex-spouse even if you divorced before your death.
Changes in Your Accounts
Your accounts, such as your bank accounts, brokerage accounts, retirement accounts, and insurance policies, probably name a beneficiary. When you die, the financial institution will hand over your account to the beneficiary. Your account will not go through probate unless you named your estate as your beneficiary.
The financial institution does not care whether the beneficiary is an ex-spouse. The financial institution will hand over the account to whomever you listed as the beneficiary.
More importantly, neither the final divorce decree nor California’s revocation law will change your beneficiary automatically. You need to contact the financial institution to make this change.
Changes to Your Guardianship Request
A family court judge does not need to follow your guardianship request for your children. But if you have sole custody or are concerned about your ex-spouse taking guardianship over your children, you should put your wishes in writing so a judge can consider them.
Changes to Your Powers of Attorney
Your estate plan probably includes financial and medical powers of attorney. The financial power of attorney gives your designated party the authority to handle your financial affairs if you become incapacitated. The healthcare power of attorney gives the other party the authority to make healthcare decisions for you if you cannot do so.
California revokes your power of attorney grants to your ex-spouse after a divorce. But it does not replace them. If you do not execute new powers of attorney, you will have no one to handle your legal, financial, and medical decisions on your behalf.
Tuning Up Your Estate Plan
Even though you should plan to replace your estate plan with newly executed documents, you do not need to start from scratch. You can use your old estate plan as a template to instruct your estate planning lawyer about the changes you want. To review your estate plan after your divorce, contact Heritage Legal, PC, an estate planning law firm in Palm Springs, CA.