During divorce proceedings, your ability to alter estate planning documents immediately can be limited due to legal restrictions.
Divorce is never easy. It affects different aspects of your life. From emotional to financial, every aspect of your life comes under scrutiny. Thus, it becomes a necessity to thoroughly review and update your estate planning documents. Critical documents, such as trusts, powers of attorney, and health care directives, directly and significantly affect the dissolution of marriage. So, if you are still confused, let’s understand these impacts to ensure that your estate plan in Carlsbad aligns with your plan of action. Estate plans must value your current intentions and comply with state laws.
Trusts
When you got married, you might have established joint trusts, which were basically to manage and protect your assets. When you build a trust, it designates the spouse as a trustee and beneficiary, which is quite typical. But, when you get a divorce, this trust arrangement gets altered. So, here are the three aspects you should keep an eye on:
If you have acquired assets during the marriage, based on the community property state, these are generally considered joint property. Next, to ensure equitable distribution, where the assets get divided, you need a court judgment. Remember that if you try to modify or revoke a trust before the court’s decision, it can lead to complicated legal aspects. Thus, to make any changes to the trust document, you have to seek help from a Carlsbad estate planning attorney and also wait till divorce.
It’s crucial to update beneficiary designations in your trust after the divorce. Otherwise, your ex-spouse might inherit the assets, which can be against your current wishes. Thus, it is always advised to review and amend these designations so that your new intentions are reflected.
You must reconsider the authority if your ex-spouse is named as a trustee. Try to appoint someone from your family or even a trusted friend as the new trustee. The entire aspect is to ensure that your assets are well-managed and based on your preferences.
Power of Attorney
If you have designated each other a power of attorney role during the marriage, then a reassessment of this arrangement is required. In most places, if you have granted this authority to an ex-spouse under a Durable Power of Attorney, it will automatically get revoked after the divorce. However, during this reassessment, you cannot appoint a new agent. So, you have to select someone who can handle your financial matters to ensure continuity.
Ensuring Appropriate Medical Decision-Making
You must specify your medical treatment preferences through the Health care directives, such as Advance Health Care Directives and HIPAA Authorizations. This will make it specific that if you’re incapacitated, someone is designated to make healthcare decisions on your behalf. During divorce, this automatically gets revoked. So, you have to appoint a new agent who understands your medical preferences.
Conclusion
During divorce proceedings, your ability to alter estate planning documents immediately can be limited due to legal restrictions. Thus, you must consult with your attorney before making any changes. They can help you to ensure compliance with these restrictions so that you can prevent potential legal issues.
