A divorce is seldom pleasant – but it is a reality that sometimes needs to be dealt with. Divorce is often complicated and confusing. Even if a mutual decision, the issues that go along with it can turn the parties towards strife and war on a wide range of matters. While divorce can be messy, the general concept of starting divorce proceedings is relatively simple.
One spouse files a petition for divorce, which the other spouse is then supposed to answer. Both must indicate a reason for requesting the divorce, usually citing a general option in California as irreconcilable differences. By far, however, the biggest source of strife in a divorce proceeding is who gets what.
Clearing Up a Divorce
When two people are legally joined through marriage as husband and wife, the property they own henceforth is typically under both their names. A major part of divorce legal proceedings is determining how to divide up assets and debts. This can be a big source of contention.
If they have children and file for divorce, then they must decide how to split custody of the children. Sometimes one parent may argue that the other parent is unfit for custody of the children. A prenuptial agreement saves couples a lot of this strife, at the cost that it can also be seen as a presumption of an eventual break, rather than a precaution.
In any case, prenuptial agreements determine what individual assets both parties own, which individual assets will remain in each person’s possession after a divorce, and how items acquired in the marriage would be split in the event of a divorce. It also details other things, such as how alimony would be handled, and who takes what level of responsibility of debts.
Of course, prenup agreements can be contested. And if certain factors are in favor of the spouse contesting the prenup, then it may be nullified. But in either case, one thing prenups don’t decide is your estate plan. If you have an estate plan before you get divorced, then it’s important to know how the divorce affected your plans – and what to do next.
What a Divorce Does and Does Not Revoke
In California, getting a divorce automatically revokes your spouse from your will. This is reinforced in probate after you pass away, even if your ex-spouse is still on your will. However, if you die before the divorce is concluded, despite it being filed, your spouse is still eligible to what is theirs as per your will. The same is not true for trusts, which are a private matter not automatically overseen by the probate court.
It is the power of a probate court to revoke an ex-spouse of their inheritance – trusts should be amended if you wish to remove your ex-spouse from the inheritance process. To understand the difference, it’s important to know why wills and trusts are two different estate planning tools, and how they differ.
Wills and Trusts
Your last will and testament is a legal document that goes into effect once you pass away. A will is typically created and signed before several witnesses, to clarify that you are of sound mind and body and not under coercion or duress, in order to prevent a claim against the legitimacy of your will.
If several wills exist, then the most recent one is generally considered the accurate one. When you pass away, a relative of yours or a representative of your will must file your death certificate with a probate court, to begin the probate process of your estate. The will then serves as a guide on how you wish your assets to be distributed.
In the case of a trust, any assets put in a living trust do not pass through probate. If anything is excluded from the trust, it may pass through probate, often through a pour over will to be transferred into the trust. A living trust offers more control over how and when assets of the estate are distributed and goes into effect upon its creation rather than upon your passing.
Divorce and Other Estate Planning Matters
Wills and trusts are one thing, but there are other ways to plan for your passing. For example, many people involve their spouses in advanced directives, giving them the right to make medical decisions in their name if they are somehow physically incapacitated and incapable of deciding.
Similarly, you can also name your spouse as a financial power of attorney, to make decisions regarding your financial obligations if you are incapacitated. In California, a divorce nullifies this, thus removing your spouse’s ability to make medical and financial decisions if you are incapable of doing so.
Divorce Settlements and Estate Plans
Your divorce can affect your estate plan in more ways than one – not only do you have to consider how your spouse leaving your life will play out in your estate plan, but you have to take into account how certain settlements and agreements made as part of the divorce might affect current estate plans.
Your estate plan cannot supersede the divorce agreement – this means that if part of the divorce agreement meant you had to write your ex-spouse into your life insurance policy, or your retirement account, as part of the division of marital property and wealth, then this overrules whatever you originally had planned for said account/policy.
Be sure to go over all the agreements you made together during the divorce and amend your estate plan to reflect these changes accurately. Note that a divorce can take months, or years – but you can change your estate plan at any time. It may not be a bad idea to amend your estate plan even if the divorce hasn’t gone through yet.
That way, if something happened before the divorce was finalized, you could prioritize the rest of your family. Be sure to partner up with an estate professional to protect yourself as much as possible from the repercussions of your divorce and determine how to go forward from here.