Divorce Estate Planning

A spouse or domestic partner who is looking to protect his or her assets prior to divorce is in an unusual position. Marriage or a registered domestic partnership imposes fiduciary duties on the partners that can limit estate planning options. Asset protection and estate planning in the pre-divorce stage must adhere to the rules governing fiduciary relationships.

After the petition for divorce is filed, standard (or automatic) temporary restraining orders will apply. These restraining orders are in addition to the fiduciary duties spouses and partners continue to owe to each other. The temporary restraining orders will last until the divorce is finalized. The restraining orders prevent any transfer, encumbrance, or disposal of community or separate property without the written consent of the other party or order of court, except in the usual course of business or for necessities of life. The restraining orders also bar cashing, borrowing against, canceling, transferring, or changing the beneficiaries of any insurance policy or other coverage. In addition, they prohibit 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 order of the court. A nonprobate transfer can include a trust, beneficiary designation, totten trust, and payable on death accounts.

Newly divorced spouses should create appropriate estate planning documents, such as a new revocable living trust, a pour-over will, a power of attorney, and an advance healthcare directive. When that is accomplished, you will at least have provided for the most important persons in your life and have documents in place to protect yourself.

If you have a new spouse on the horizon, a dissolution is also the time for you to give serious consideration to the preparation of a premarital agreement, in order to preserve the separate character of your existing assets, to determine the character of new earnings, and to handle such matters as spousal support and succession to property on death. You can also decide in a new will or trust whether to provide for your new significant other.

Divorce is not as certain as death, but you can still prepare for the complexities surrounding the intersection of divorce and death with your estate plan.

Contact us today:  https://santabarbaraestateplanner.com/

Santa Barbara Estate Planner
21 East Carrillo Street, Suite 110
Santa Barbara, CA 93101
(805) 669-7009

*A nonprobate transfer is probably best described as a type of lifetime transfer, because a probate transfer is the transfer of property as a result of death upon order of the court.