Every day, 33 people in Orange County will file for divorce. While each divorce has its own unique details and circumstances, one fact remains the same: the parties should consult with an attorney about their existing estate plans. This is true even before the divorce proceedings become final. In fact, it is just as important to update your plan during a separation as it is to make the update after a divorce.
Why You Should Act Now
Why is it so important to update your trust once you have decided to separate from your spouse? Here are five reasons:
- Consider possible disability or incapacity. Chances are, your trust appoints a trustee to take over your affairs in the event that you become incapacitated. This is an important and useful tool contained within most trusts. It allows for the swift transfer of management and control of the assets without probate court involvement. However, if your spouse is named as the trustee, this may no longer align with your needs. Consider revising your trust to name another person to serve as trustee in the event of your disability.
- Similarly, you may wish to update your trust to name a new successor trustee to take over the trust in the event that you pass away. While the odds may be small, there is a possibility that something tragic could occur prior to the finalizing of the divorce proceedings. Changing your successor trustee now ensures that the person you want overseeing your assets is in charge.
- Consider changing the beneficiaries of your trust. If your beneficiaries are primarily your children, this may be unnecessary. However, if your beneficiary is your spouse, this may no longer be in line with your wishes. It is crucial that you consult with a knowledgeable attorney prior to making this change, however. Some changes to trusts are not permitted while a divorce is pending.
- Consider revising the terms governing the distribution of your assets. If you have young children, you may have given your spouse, if living, the authority to oversee distributions to your children after you pass. You may wish to revise this provision if it no longer aligns with your goals.
- Consider updating the basic details of your trust. Many trusts contain a provision that lists your immediate family. Your spouse may be specifically included. You may wish to remove this reference now that you are moving towards divorce.
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