Getting divorced? What to do with your estate plan (that gives everything to that rotten ex)

I have been thinking more about my posting about your will/trust/estate plan, and I felt it needed more to make it complete. Specifically, IF you have a divorce case currently, what can you do NOW to protect yourself and your children? Divorce cases can last for years. Yes, unfortunately this is true, so we have to hope for the best (a speedy and as-painless-as-possible case) and plan for the worst (an endless case). So if you have a case and the ATROs (see last week’s post about what these are) prevent you from changing your will (or estate plan), here are some things you can do.

First, take advantage of the ability to sever joint tenancy (JT). The ATROs allow you to sever joint tenancy with simply NOTICE to the other party. Sever this JT and should something happen to you, you have the ability to give your half of any real property (a house, for example) to someone other than your estranged spouse.

Second, have a conversation. If you have a lawyer, your lawyer might be telling you never to talk to your estranged spouse. I disagree with this family law case philosophy because (as one of our local judges used to say) YOU are in the best position to come to a resolution of your case. If you stop talking to each other, then hostility can grow and you may be likely to fight more. Now, this approach works well for the lawyer, who gets to funnel ALL of your issues at $450 an hour! It’s better on you, your relationship, your pocketbook, and your case if you’re able to talk to each other. Talk about changing your will so each of you can make an estate plan that provides for your own property to go to the individuals you choose instead of each other.

Third, if you can’t have an informal conversation, bring it up in a formal setting. Whether it’s a meeting with your lawyers, a court conference, or if you add it to the issues to be raised at a hearing, make time to discuss these issues so they’re at least out in the open.

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If I am getting divorced in California, do I need a will?

Here, I want to ask (and answer!) the question, do you need a will (and when and why). The answer, which might be surprising to you, is absolutely YES! With very few exceptions, everyone needs a will.

In my business and in this blog, I have worked hard to educate others on the importance of an estate plan centered around a living trust. A living trust avoids probate, transfers your property easily upon your death, and allows you to avoid fees and taxes (among many other reasons that you can see in my estate planning blog). But your estate plan has other components, and one of these is your will. In an estate plan, your will is called a “pour-over” will because it’s intended to ‘catch’ any property that you have left outside your estate.

Now, you may be asking, what kind of estate plan is it if you leave something out of it?! Well, sometimes we forget (despite the repeated reminders from our friendly estate planning attorney), and sometimes there’s just not time. If you acquire property and pass away before you are able to complete the transfer to your trust, then you want that will to ensure that your property transfers appropriately to your heirs through the probate process.

But in the context of family law, when and why is a will important? Let’s look at this issue in two contexts because they’re very different. First, let’s look at the time when you are going through your divorce or other family law case (where you are restricted from changing/updating your will) and once the action (case) is completed (where you NEED to update it).

The Automatic Temporary Restraining Orders (ATROs) in the Family Law Summons provide,

“Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other party.”

What? This basically means that you cannot change your will or living trust during the pendency of your action without written consent of the other party or a court order. Note that this includes severing a joint tenancy on a property (which does not require consent but does require advance written notice). So when you are in the middle of a divorce and you pass away, that house you have in joint tenancy goes automatically to your ex. Ouch. But if you don’t know about these restrictions, then you could get into trouble with the court, which is a bad idea. Also, remember this if you’re thinking of filing for divorce.

Once your case is over, however, you really DO need to update your will. In fact, you most likely need a full estate plan that includes a living trust. Hopefully I have convinced you of that by now. If you don’t, then your out-of-date document WILL control the disposition of your assets. To look at recent examples, Brittany Murphy did not update her will when she got married. Heath Ledger never updated his will after his daughter was born (and that caused all kinds of trouble).

Don’t make their mistakes, and always make sure your estate plan is updated to take into account a marriage, divorce, birth, death, or acquisition of property.

Where there’s a will, there’s a way…

Here, I want to ask (and answer!) the question, do you need a will (and when and why). The answer, which might be surprising to you, is absolutely YES! With very few exceptions, everyone needs a will.

In my business and in this blog, I have worked hard to educate others on the importance of an estate plan centered around a living trust. A living trust avoids probate, transfers your property easily upon your death, and allows you to avoid fees and taxes (among many other reasons that you can see in my estate planning blog). But your estate plan has other components, and one of these is your will. In an estate plan, your will is called a “pour-over” will because it’s intended to ‘catch’ any property that you have left outside your estate.

Now, you may be asking, what kind of estate plan is it if you leave something out of it?! Well, sometimes we forget (despite the repeated reminders from our friendly estate planning attorney), and sometimes there’s just not time. If you acquire property and pass away before you are able to complete the transfer to your trust, then you want that will to ensure that your property transfers appropriately to your heirs through the probate process.

But in the context of family law, when and why is a will important? Let’s look at this issue in two contexts because they’re very different. First, let’s look at the time when you are going through your divorce or other family law case (where you are restricted from changing/updating your will) and once the action (case) is completed (where you NEED to update it).

The Automatic Temporary Restraining Orders (ATROs) in the Family Law Summons provide,

“Creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court. Before revocation of a nonprobate transfer can take effect or a right of survivorship to property can be eliminated, notice of the change must be filed and served on the other party.”

What? This basically means that you cannot change your will or living trust during the pendency of your action without written consent of the other party or a court order. Note that this includes severing a joint tenancy on a property (which does not require consent but does require advance written notice). So when you are in the middle of a divorce and you pass away, that house you have in joint tenancy goes automatically to your ex. Ouch. But if you don’t know about these restrictions, then you could get into trouble with the court, which is a bad idea. Also, remember this if you’re thinking of filing for divorce.

Once your case is over, however, you really DO need to update your will. In fact, you most likely need a full estate plan that includes a living trust. Hopefully I have convinced you of that by now. If you don’t, then your out-of-date document WILL control the disposition of your assets. To look at recent examples, Brittany Murphy did not update her will when she got married. Heath Ledger never updated his will after his daughter was born (and that caused all kinds of trouble).

Don’t make their mistakes, and always make sure your estate plan is updated to take into account a marriage, divorce, birth, death, or acquisition of property.