Divorce changes more than your personal life—it reshapes your entire estate plan. From wills and trusts to beneficiary designations and healthcare directives, every document that once reflected trust between spouses must be reevaluated. Brian Chew, Managing Partner at OC Wills and Trusts, explains why failing to update these documents can leave you vulnerable and why timing matters in protecting your legacy.
Why does divorce require revisiting your estate plan?
Many couples create joint trusts and estate plans during marriage, built on the foundation of trust and shared goals. When divorce occurs, that trust is often gone. Even if parents still agree their assets should ultimately benefit their children, the person named to control finances, medical decisions, or guardianship may no longer be the right choice.
Brian Chew emphasizes that divorce disrupts the most important questions of estate planning: Who do you love? Who do you trust? And how much do you trust them? When the answer changes, the estate plan must change too.
What are the risks of leaving outdated documents in place?
It’s not just about where money goes after death. Estate planning documents also control who makes decisions if someone becomes incapacitated. Without updates, an ex-spouse could retain authority to make healthcare decisions, manage bank accounts, or even sign on your behalf. This creates unnecessary risk for anyone no longer comfortable giving an ex-partner that level of control.
Why do joint trusts create problems after divorce?
Joint trusts work well during marriage because spouses are treated as one tax unit. But after divorce, assets are separated, and holding property in a joint trust can cause tax complications and legal conflicts. Assets must be removed from the joint trust and placed into new, individual trusts to ensure clarity and compliance.
How do beneficiary designations interact with divorce settlements?
Retirement accounts, life insurance policies, and other financial instruments rely on beneficiary designations. In California, these designations do not automatically change after divorce. The terms of the divorce settlement determine whether an ex-spouse remains a beneficiary or whether changes are required.
Brian Chew notes that courts often require life insurance policies to secure spousal or child support, naming the former spouse as a beneficiary. But if a parent has minor children and wishes to name them instead, placing assets into a trust is critical. Without this step, funds could end up in probate, leaving the court to decide who controls the money until the children reach adulthood.
Can divorcing spouses update estate plans together?
Sometimes divorcing spouses approach estate planning cooperatively, updating documents in parallel while still creating separate plans. Even when cooperation exists, once the divorce is finalized, each person controls their own estate plan and can make changes at any time.
If cooperation breaks down, each spouse still retains the ability to independently update their plan. The only exceptions involve jointly titled assets, such as real estate, which require mutual action to transfer ownership into separate trusts.
How do prenuptial and postnuptial agreements affect estate planning?
Agreements signed before or during marriage, such as prenuptial or postnuptial contracts, directly affect estate planning. These agreements define what is considered community property and what is separate property, impacting how much can be transferred to children, new spouses, or other beneficiaries.
In California, community property generally includes anything earned during marriage, while separate property includes assets owned before marriage or acquired by inheritance. Even with an estate plan in place, these agreements and property classifications govern what can be distributed.
What happens if you fail to update after divorce?
While many families eventually correct outdated estate plans, the risks of waiting are significant. If someone becomes incapacitated, an ex-spouse could legally retain decision-making power. If someone passes away without updates, conflicts may arise over what is considered community or separate property. These disputes can pit surviving children against an ex-spouse in lengthy negotiations.
When should you update an estate plan: during or after divorce?
The best time to update an estate plan is as soon as divorce becomes likely. While division of assets may take time, individuals can immediately change decision-makers in powers of attorney and healthcare directives to prevent an ex-spouse from having control. As assets are divided through the settlement, new trusts and beneficiary designations should be established to align with the updated plan.
Brian Chew advises clients to act early: If you no longer trust your spouse to make decisions for you, remove them from your documents as soon as possible.
Estate planning is not a one-time task—it’s an ongoing responsibility, especially during major life changes like divorce. By updating wills, trusts, healthcare directives, and beneficiary designations promptly, families can avoid confusion, conflict, and unintended outcomes.
To learn more or schedule a consultation, visit OC Wills and Trusts.
