If you are going through the process of a divorce and have any assets, you need to be sure that your estate plan is as well-conceived as possible. Estate planning after divorce can also help guide your children if they become heirs to your estate. An experienced attorney can help you determine what an appropriate estate plan is for your situation. An estate plan will include a will, a revocable trust, and perhaps other documents. When you are talking about estate planning as an individual, your spouse is also involved. When an individual dies without a will, the state of California controls the distribution of assets. The surviving spouse, who is married to the deceased, may need to go through probate to get all of the assets. In other states, family members may need to step in and administer the financial part of the estate that does not go through probate.
One of the primary reasons to have an estate plan is to make sure that your assets are not divided up among family members in a way that they do not want. To build an estate plan, you need to determine what types of documents you and your spouse will need. The documents needed will vary depending on the situation, so an attorney should be able to spend time explaining the options to you and then helping you choose what best meets your needs.
One of the documents you will need is beneficiary designations. These are forms that are filled out in your financial accounts to let you name who should benefit from accounts when you die. You want to make sure that these assets do not go into probate first. This will expedite the distribution of assets and save money on legal fees. You should be sure that your beneficiary designation forms are up to date with any changes in your family or other situations so that they accurately reflect who you want to receive these assets. You will also want to review these forms periodically to make sure that you are still happy with the beneficiary you have selected. Another thing you should be sure to do is to designate an alternate beneficiary in case the primary beneficiary does not survive you.
If You Have Children
If you have children, it is very important to establish trust for them. You will want to make sure that the trust allows them to be able to access some assets that are not subject to probate. For example, with a California trust, you can keep funds in savings accounts and brokerage accounts without being subject to probate in California. Or you can put money in your child’s name for college tuition without the degree being part of the probate court distribution of assets.
An estate plan will also help guide your heirs with money management during their young adult years. If you do not have children, you will need other estate planning documents. These can include a revocable trust for a property that does not need to go through probate. This can include things like real estate and small businesses. You may also want to establish a living trust that outlines your wishes for financial matters such as healthcare and funeral arrangements.
Your Will and Living Trust
A will and a living trust are the two most common components of an estate plan. If you do not have any heirs, a living trust may be all you need to make sure that your assets are distributed according to your wishes. The living trust is updated regularly and only needs to go through probate if something changes in the document. It is also possible for your estate planning attorney to create the will and living trust at the same time, so they are very closely linked. If you have a will, it will be probated when you die. The executor of your estate will distribute assets according to your instructions in the will. Any assets that are not addressed in the will are distributed by the state.
Health Care Powers of Attorney and Estate Planning After Divorce
Another aspect of estate planning is making sure that your wishes are clear as to medical care. The medical power of attorney and living will have been a standard part of estate plans for decades. This can include deciding to no longer have life support when you are terminally ill or stipulating what kinds of treatments should be used to try and save your life.
These decisions must be made while you still have decision-making capacity, so it is important to have them in place before a major medical crisis occurs. Without the power of attorney and a living will, the court may appoint a healthcare surrogate to make these decisions for you.
Estate planning can help your family avoid a lot of extra stress when you die and make sure that assets are distributed in the manner you wish. It is important to have an estate plan that reflects all of the changes that have happened in your life since you last updated it. An attorney can help you update documents that need to be changed and will also be able to explain how the estate plan works.