Divorce and Your Estate

Divorce and Your Estate

If you are in the process of divorce, even if it’s an amicable one, your life is changing significantly. We at Lonich Patton Ehrlich Policastri know you are going through a stressful time. Still, it is also the most crucial time to reevaluate your estate plan and ensure that your goals and needs will continue to be met after the divorce is finalized.

Why is your estate important in a divorce?

Everyone has an estate, so your estate should concern you, no matter who you are. Your estate, which refers to all the money, assets, and property you own, is essential to plan for in a divorce because it is plainly, everything you own.

While you are married, your spouse has rights to your estate. Therefore, he or she can make decisions on your behalf if anything happens to you before finalizing the divorce, even if you are fully competent.

How can proper estate planning help you in a divorce?

With proper estate planning and an experienced estate attorney, you can ensure your family is taken care of and your assets are protected.

The main goals of estate planning are to:

  • Retain as much control over your assets as possible
  • Minimize the probate process, expenses, and delays
  • Protect the future of your children and heirs
  • Protect your assets, property, and money

What happens when you don’t protect your assets and estate?

Without proper estate planning, your estate could end up in litigation. Litigation refers to legal proceedings that resolve disputes over a deceased individual’s assets and estate.

If you die without ever updating your beneficiaries, your ex-spouse will still be named to inherit your assets.

If you do not have an established will, a family member or loved one can challenge its validity, causing your estate to go into litigation. This lack of formal documentation could result in months or even years of court and legal battles that could have been avoided with proper estate planning. 

How can protecting your assets and property protect your children and heirs?

If you are considering a divorce, one of your first concerns is more than likely protecting your children and their future. Now is the ideal time to revisit the beneficiaries of your will and any trusts you may have.

In these turbulent times, you should also strongly consider how to structure and safeguard your assets so that your children receive the full benefit of a lifetime of hard work. One way to do that is through trusts. 

Some trusts can protect assets in a divorce. For example, in California, trusts established before marriage are considered separate property. Irrevocable and revocable trusts can also protect assets in a divorce. 

Unlike a will, a trust is active the moment the grantor signs it, not after his or her death. It is crucial to talk to an estate attorney who knows the proper processes and procedures.

Estate Planning Steps to Prepare for a Divorce

If you’re thinking about or in the process of a divorce, there are a few steps you can take to prepare for estate planning. 

1. Find Out What You Can (and Can’t) Change

Most states won’t allow you to change the beneficiary designation of life insurance, pensions, or retirement accounts and plans until after a divorce is final.

In California, the laws are a little more flexible. At Lonich Patton Ehrlich Policastri, our experienced divorce attorneys know precisely what you can and can’t change, and when. 

2. Update Your Health Care Directive

When you got married, you likely named your spouse as your health care directive. This means he or she would be able to make medical decisions on your behalf.

It’s not necessary to change your health care directive during or after a divorce, but keep in mind that making medical decisions requires a considerable amount of trust and gives a person significant power over the other.

You should consider learning about the various powers of attorney so that you can ensure your medical rights are protected in the event of a divorce. An attorney can help you with your Power of Attorney (POA) questions.

3. Change Your Power of Attorney

If you execute durable powers of attorney with your spouse, he or she has access to all of your assets and accounts, including those solely in your name. Therefore, it’s an important step (especially if the divorce isn’t civil) to revoke a power of attorney, execute a new one, and provide your spouse with notice as soon as possible.

4. Review Your Prenuptial or Postnuptial Agreement

A prenuptial or postnuptial agreement is a written agreement a couple enters into before or after getting married. If the couple ever gets divorced, the contract is executed.

If you have a prenuptial or postnuptial agreement, you probably already reviewed it with your divorce attorney – it’s one of the first things you should do if you have one and are considering divorce. This agreement determines what your spouse is entitled to in the event of divorce.

5. Decide What to Leave Your Spouse

Changing your will, trust, and beneficiaries isn’t easy, and it’s even more difficult to choose exactly what to leave your spouse. Talking to an experienced estate attorney often clears up a lot of questions and can help you understand what your spouse is entitled to, what you should consider, and what you don’t have to do.

6. Update Your Will

Once your divorce is final, you need to update your will accordingly. If you appointed your ex-spouse as an executor of your will, he or she would be in charge of your estate if you pass away.

It’s not necessary, but most individuals change the executor of their will after the marriage is over.

Depending on the circumstances, you may also want to review your choice of guardian for your children. For example, if the divorce is hostile or domestic violence, drugs, or alcohol abuse are involved, you may want to explore other guardian options. You could name an alternate guardian in your will, for instance.

In cases of an amicable divorce, you may be OK with leaving your ex-spouse as guardian and maintaining co-parenting status.

7. Amend Your Revocable Trust

If you have a trust, consider removing your former spouse as executor or trustee if your state allows it. As executor, your spouse has the right to access and control your money for your children if you die.

8. Revisit and Update Your Estate Plan After Your Divorce is Finalized

Consider estate planning during a divorce as a rough draft. Then, after your divorce is finalized, revisit your estate plan and update it with anything processed from the divorce. Certainly,  adjustments will need to be made in light of the finalization.

LPEP’s Experience with Divorce

As one of the few law firms in the Bay Area to practice both estate planning and family law under one roof, we have both the ability and experience to guide you through this challenging and often emotional process.

Our law firm is dedicated to helping you protect your finances and assets, including any property you owned before getting married and any retirement benefits.

We also have significant experience working with clients drafting prenuptial and postnuptial agreements that can withstand a court challenge.

LPEP’s Experience with Estate Planning

At Lonich Patton Ehrlich Policastri, our estate planning practice blends well into our family law practice.

For nearly two decades, our attorneys have helped clients develop both simple and complex estate plans. We understand the intricate details involved in estate planning and will ensure that you and your family are fully protected.

Since 1994, we have helped clients in Santa Clara draft effective estate plans and are ready to help you modify your existing estate plan if you are getting a divorce.

Hire an Attorney to Help

Divorce is a complicated and often stressful process. It is essential to have a professional on your side who can guide you through the intricacies of estate planning and divorce law.

As a first step, an experienced estate attorney will analyze your current estate plan to determine the extent to which your former spouse stands to inherit from your estate.

Next, they will examine any powers of attorney or medical directives granted.

Finally, estate and divorce attorneys will work with you to create an estate plan that reflects your desire for the future more accurately.

Even on the best of terms, divorce isn’t easy. Meet with one of LPEP’s experienced attorneys for a free initial consultation to learn how to protect your family, your assets, and your future. We know it’s not easy, but we promise to make it as simple as possible.

Call Lonich Patton Ehrlich Policastri today at (408) 553-0801 or contact us for a free initial consultation! Protect yourself, your estate, and your family. We’ll make it easy for you.