While a divorce is pending, spouses are subject to certain restrictions when it comes to modifying an Orange County estate plan. These restrictions are designed to protect spouses and children while the terms of a divorce are ironed out. One such restriction involves changes to the ownership or beneficiary designations of an insurance policy. Insurance policies are frequently a part of an overall estate plan. While you likely will want to change the beneficiaries of these policies after your divorce is final, it is best not to take any actions without first consulting an experienced attorney.
Types of insurance that are subject to these restrictions include life, health, auto, or disability, if these policies were held for the benefit of a spouse or children before the divorce filing. The following is an overview of the specific restrictions that are imposed:
- A spouse cannot cash in an insurance policy.
- A spouse cannot borrow against an insurance policy.
- A spouse cannot cancel an insurance policy.
- A spouse cannot transfer an insurance policy to someone else.
- A spouse cannot dispose of an insurance policy.
- A spouse cannot change the beneficiary of an insurance policy.
Although you cannot take these and other actions, there are important Orange County estate plan modifications that are permissible even before a divorce is finalized. To learn more about updating your plan, view our free guide, The Ten Things You Must Know Before Creating (or Amending) Your Will or Trust. Contact our office for assistance from an experienced Orange County trust amendment attorney today. Call us at (714) 459-5481 for a consultation.