/Covid-19, Your Estate Plan and Divorce.

Covid-19, Your Estate Plan and Divorce.

Most married couples with an estate plan name each other to receive most or all their property upon their death. They also usually name the other to be their health care agent, and agent with power of attorney for financial matters. If this is your situation you may want to reconsider and make some changes, because when a divorce is filed your options become more limited.

When you file for or get served with a divorce in California certain standard restraining orders go into effect immediately. One of them keeps you from making any “non-probate” transfers. In plain talk, that means you can’t remove or put any of your property into a trust without your spouse’s agreement while the divorce is pending. So, if you want to change or create a trust, you need to do that before the divorce gets started.

However, you are permitted to change your Advance Health Care Directive (health care power of attorney) or your Durable Power of Attorney (financial power of attorney) at any time. You may want to seriously  consider whether do that before or soon after the divorce is filed. During the time the divorce is pending and while you are still married, anything can happen. Accidents and unexpected illnesses occur every day. Covid-19 can strike without warning and quickly become life threatening.  If your estranged spouse is still listed as your primary agent when you become incapacitated, he or she will be permitted to make health decisions for you, and to handle your financial affairs. Literally, that would allow your spouse to be in the position to “pull the plug”, even after a divorce has been filed.

Likewise, if you contract Covid-19 or suffer any other medical condition that results in your being unable to manage your financial affairs, the person named in your Power of Attorney is likely to have complete control of all of your finances, including your separate property. You may not want to have the spouse you are divorcing to have all that power. If divorce is a possibility, creating a new Power of Attorney document might be a good idea. You can name a trusted friend or relative to stand in your shoes and manage your assets when you are unable to do so on your own.

Some good news. The law does allow you to revoke an existing trust under certain circumstances that include giving notice to your spouse. Check with your attorney. And, although you can’t create and fund a new trust, you are allowed to create a new Will during the pendency of the divorce.  Depending on your circumstances, this can be a very good option.

Creating a new Advance Health Care Directive and Durable Power of Attorney is a simple and inexpensive process. You can find forms online, and many hospitals and health care organizations have their own Advance Health Care Directives. And if you need assistance, your attorney can help you create the documents or connect you with an estate planning attorney who can.

Taking these simple steps are an important part of building your personal and financial post-divorce future. And you will experience a great sense of relief knowing your affairs are in order!

2020-10-12T08:51:01-07:00