At the commencement of all California divorce cases, the Court will issue the following order against both parties:
Starting immediately, you are restrained from creating a non-probate 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.
A “nonprobate transfer” is a transfer of property at death from a decedent to another without the need for a probate proceeding, such as:
- Living trusts;
- Marital property agreements;
- Survivorship marital property;
- Joint ownership with right of survivorship;
- Payable on death (POD) accounts;
- Beneficiary designations on retirement plans, annuities, and life insurance policies;
- Transfer on death (TOD) security registration.
This is incredibly important because if you and your spouse have an existing estate plan at the commencement of your divorce, and you die before your divorce if finalized, your spouse will still inherit your property pursuant to your estate plan (the same is true if you have no estate plan – your spouse will inherit your share of community property under California’s intestacy laws if you die without a Will or Trust before your divorce is finalized).
In light of this, you should be discussing your estate planning options with qualified counsel while your divorce is pending. You have several options: You could decide to revoke your trust and establish a will (both are permitted with only a requirement of notice to your spouse). Or you may decide that it is appropriate to place your community property in a Revocable Living Trust, which you can do if you get the consent of your spouse, or the approval of the Court.
This issue is often overlooked at the inception of a divorce case. At Del Ponte and Hirz, we practice both Family Law and Estate Planning law, so this issue can be handled without turning to outside counsel. We offer a Free Consultation to discuss this, so feel free to Contact Us to schedule a time to discuss your situation.
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