When California residents get divorced, one thing they should not overlook is their estate plans. Estate plans should be reviewed whenever people undergo major changes in their lives, including ending their marriages. If people fail to review and update their estate plans while going through divorces, unintended consequences might occur if they unexpectedly pass away or become incapacitated. Here are some things that people should review when they are going through a divorce.
Power of attorney and health care proxy
If you have a durable power of attorney and health care proxy in place that names your spouse as your attorney-in-fact in the event that you are incapacitated, you might want to change those documents unless you still want your estranged spouse to make decisions on your behalf. If you do not change your attorney-in-fact to another trusted person, your ex-spouse will have the authority to act in the capacities you have granted if you are incapacitated by an injury or illness.
Will and beneficiary designations
You should also review your will as a part of ongoing estate planning during a divorce and make changes to it to reflect the changes in your life and your wishes for how you want your assets to be distributed when you pass away. If your estranged spouse is named as a beneficiary in your will, he or she might receive your assets even if that is no longer what you wish. The beneficiary designations on your retirement plan and any life insurance policies cannot be changed until after your divorce is final. However, once your divorce decree is issued, you should update your beneficiary designations to the people you wish to receive those assets instead of your former spouse.
Estate planning is not a static process. Instead, it should continue throughout your life. People should review and modify their estate planning documents whenever they experience major changes in their lives. In addition to divorces, other circumstances that might prompt a review and potential modification of estate plans include starting a family, getting married, having a new child, getting remarried, having a blended family, and experiencing the death of the executor that you had appointed in your will.