Estate Planning During Divorce: Mediation Insights From A Family Law Expert

The phrase, “’til death do us part” in wedding vows is a traditional sentiment of unconditional commitment between two people who intend to devote themselves to their marriage for the entirety of their lives.

Ironically, sometimes, love dies before people do. The reality is that some marriages end before death intervenes. 

To that, death is one of the most important and yet overlooked topics in both marriage and divorce. This is known as estate planning: the legal management of one’s wishes in regards to their assets, possessions, healthcare, legacy, guardianship, and other topics in the event of their death or incapacitation. 

There is no denying that divorce changes the course of your life in many ways, prompting a re-evaluation of decisions that were made at an earlier time. Thus, divorce is an opportunity to revisit and revise your estate plan through a fresh, new perspective. 

Divorce Mediation Streamlines Estate Planning

Most people try to avoid thinking about death or incapacitation. However, deferring or pushing aside this important and sometimes uncomfortable conversation will result in your wishes being undocumented and therefore potentially legally unfulfilled.

Furthermore, most people tend not to consider the possibility that anything can unfortunately happen during the divorce process itself, before the divorce is finalized. 

Mediation empowers you to think about the future of your life and beyond. The guidance of an expert mediator can gently facilitate conversations about your divorce with compassion to make topics like estate planning feel frictionless and undaunting.

Colleen McNamee, CEO of McNamee Mediations, is a family attorney and Master Mediator that goes above and beyond to streamline the timely re-evaluation and revision of wills, trusts, powers of attorney, and healthcare directives. Furthermore, Colleen helps divorcing couples better understand and resolve issues of the guardianship of children, division of assets, matters of inheritance, and more.

Does My (Future) Ex-Spouse Automatically Get Half If I Die?

California divorce laws consider community property to include: anything you earned while married; anything you bought with the income you earned while married; any debt you incurred while married.

However, there is a legal solution for spouses to mutually consent to dividing community property outside of the default 50/50.

Imagine a divorce between a maximalist fashionista and minimalist nomad. At the heart of their irreconcilable differences was their lifestyle preferences. Her desire for a home with a grand walk-in closet to showcase her collection directly conflicts with his desire for a life with minimal possessions. The wife’s undocumented wish is for no one but her daughter to inherit her wardrobe of rare and exotic fashion and precious fine jewelry. She is wary that if she is survived by her future ex-husband, without a prenup or, he could potentially sell parts of her collection through estate sales, which are highly sought after events in which the personal belongings of a high net worth individual are sold to the public by surviving kin. 

Most people do not know that wills cannot supersede California community property laws. Without a pre-nuptial or post-nuptial agreement, the wardrobe she acquired during their marriage with the income she earned during their marriage would be considered community property. If she were to become incapacitated during the divorce process without having had a prenuptial or post-nuptial agreement, her spouse would inherit her 50% ownership of her wardrobe. 

However, mediation would present an opportunity for the spouses to recognize their vastly different personal values and negotiate an arrangement for the entirety of the wardrobe to be awarded her separate property, with his voluntary consent to disinherit his 50% share. This would allow the wife peace of mind that her daughter will inherit her entire collection, and this would save the husband the hassle of transferring ownership to the daughter.

These terms can be drafted by a mediator into their post-nuptial agreement, a legal document that outlines specific arrangements, like how certain community property will not be divided through default equal distribution. Furthermore, the couple can discuss any issues of divorce in mediation.

Estate Planning In Divorce And Beyond

Divorce can revoke or affect powers of attorney or healthcare directives. Thus, it is important to update or add designated persons to act on your behalf, as the finalization of your divorce will grant you the freedom to appoint new representatives that align with your wishes going forward. Likewise, you may wish to update your beneficiary designations for retirement accounts or plans. 

While California divorce laws consider life insurance policies to be community property, individuals may update their beneficiary designations. Most people do not know that divorce in California does not automatically remove beneficiaries. It is crucial to do this as soon as possible once the divorce is finalized, especially for life insurance, as it is not possible to alter the designation of a life insurance beneficiary after the insured has passed away. In the event that one dies or is incapacitated without having removed their ex-spouse as a beneficiary, their ex-spouse may still collect the funds. 

In some cases, a spouse will be court ordered to comply with custody and financial arrangements that ensure security for the children. That said, such arrangements do not always require the intervention of the court to be formalized. These issues can be discussed in the private offices of mediation, rather than in view of public eyes and scrutiny. Mediation allows the opportunity for one or either of the spouses to advocate for their wishes in regards to custody and child support, as well as arrangements that prepare for the event that the death of one of the spouses leaves the children with one parent. One may ask during mediation for the other spouse to maintain them or their shared children as beneficiaries of life insurance.

Procrastinating until it is too late will result in arrangements that may differ from your undocumented wishes. 

If you have any questions about estate planning and divorce, give McNamee Mediations a call today. 

Call Us Today: +1 (949) 223-3836

E-Mail Us: mmediations@msn.com