From the desk of San Diego Estate Planning Attorney, Kristina Hess … serving Del Mar, Fairbanks Ranch, Rancho Santa Fe, Carmel Valley, Santa Luz, and all of San Diego County
Sam and Sally of Fairbanks Ranch (Rancho Santa Fe, California 92067) * [all names are fictitious and any resemblance to real people is purely coincidental] are getting a divorce.
It was going to be amicable with everyone working together to do this quickly, easily, and with minimal disruption; however, things didn’t turn out that way as the divorce entered year four.
Sally, who had assets that she had inherited when her father passed away, became increasingly concerned about what would happen to her children and her assets if she were to die suddenly. She certainly did NOT want her soon to be ex-husband to inherit her assets. Unfortunately, under their current Smith Family Trust (their joint revocable living trust), Sam would get all of Sally’s separate property (e.g. her inheritance) and her share of their community property.
What to do?
Generally, once a spouse files for divorce (by filing a Petition for Dissolution of Marriage), the petitioner is automatically restrained by an “ATRO” — Automatic temporary restraining order” that prevents one spouse from taking unilateral action with regard to assets.
Some actions are prohibited entirely — like changing a beneficiary on a life insurance policy! Other actions are only permitted with the prior written consent of the other spouse.
Yet, other actions are permitted as long as you give prior written notice to the other spouse before the change takes effect.
So, back to Sam and Sally’s story … Sally wants to revoke her Smith Family Trust (a joint living revocable trust).
Can she do that before her divorce is final?
Yes. Pursuant to Family Code section 2040, she can revoke a revocable trust or other nonprobate transfer (as long as it is permitted pursuant to the terms of the instrument). Sally just has to provide notice of the change with the court and serve the notice on the other spouse before the change takes effect. Luckily, in Sally’s case, her Family Trust permits her to revoke the trust as it relates to her portion of community property and as it relates to any of her separate property.
The next thing to look at is who is making your health care decision, has your durable power of attorney, and who is nominated to raise your children?
Chances are that if you have an existing estate plan, your spouse is the number one person in line to do all those things!
I imagine that if you are going through a divorce this is something that you should update right away. Changes to your will, power of attorney, and advance health care directive are permissible while a divorce is pending.
If you are facing divorce and need to update your planning documents (or put new ones into place), please call our office, and we can assist you.
San Diego Will and Trust Attorney, serving Fairbanks Ranch, Rancho Santa Fe and all of San Diego County,
DISCLAIMER, nothing contained on this website, or blog is intended to be legal advice. The information contained on this blog and website is intended for general purposes only, I am not your lawyer and we have not formed an attorney-client relationship by you reading this post. You are not intended to rely on this information.