People in California know that the only constant in life is change. People’s lives change in some way each and every day, whether they realize it at the time or not. Some of these changes are obviously bigger than others, and some of them require a great deal of thought and energy to prepare for and react to. One of the major life changes many people go through and some point or another is divorce.
The chances are high that a married person will experience at least one divorce during their lifetime, and being prepared for the consequences is absolutely essential to surviving with finances intact. Rather than leaving this up to chance, people should schedule a consultation with an experienced estate planning attorney immediately after a divorce or other major life change.
One thing people don’t think about enough is how their divorce will affect them in the long run, including their plans for retirement and their estate plan. In most cases it is very unlikely that a person wants to leave their assets to a person they just divorced, but if they don’t change their estate planning and personal financial documents accordingly, there is the possibility of this happening. Beneficiary statements, including those on life insurance and retirement accounts, must be updated. Otherwise, the ex stands to benefit from them.
In California, a person who names their spouse in their will but later divorces that person will probably have their ex-spouse automatically excluded from the will by law, but even then the assets intended for the spouse prior to the divorce remain unaccounted for and may have to go to probate. Avoiding probate can save time and money, so people should update their will any time a life change impacts, adds, subtracts or changes beneficiaries in a will.
Source: Daily Finance “5 Tasks to Help You Start to Rebound Financially Post-Divorce,” Hank Coleman, April 29, 2014