When navigating California family law, one important yet often overlooked aspect of divorce is understanding how your living trust may be affected. At any point during your divorce process, it’s important to understand how divorce affects your trust. This knowledge can have significant consequences for your assets and beneficiaries.
In this article we’ll walk through what typically happens to a living trust during divorce and where you’ll need to take action. Especially with regard to divorce estate planning, living trust divorce, ex-spouse considerations and beneficiary updates.
What automatically changes
In California, divorce does not undoubtedly wipe out your living trust but certain defaults in the law will affect your estate plan once your marriage legally ends.
To begin with, California law recognizes what are commonly called revocation rules. A revocable living trust isn’t automatically revoked upon divorce. However, provisions benefiting your spouse may be deemed invalid by the court if they were made in contemplation of the marriage. That means your spouse’s role in the trust — for example, as a trustee or a beneficiary — may be nullified to align with divorce orders and state law.
California’s omitted spouse statutes may dictate the removal of a spouse or beneficiary if your trust was created before you married. This can also apply if you intended to provide for your ex-spouse but failed to update the trust after marriage. These statutes may allow the court to ensure your former spouse’s rights are balanced against your intended estate planning goals.
However, these changes don’t occur automatically as a result of divorce. You must actively update your trust to ensure it aligns with your current wishes and complies with California law.
What You must update manually
To truly align your legal documents with your post-divorce intentions, a series of updates are usually required. These fall into a few common categories:
Amendments & Restatements
After a divorce, consider creating an amendment or a full restatement of your living trust. An amendment lets you revise specific sections of the trust — such as removing your ex-spouse as a beneficiary or trustee.
A restatement replaces the entire trust document but retains the original trust’s date, allowing for clearer and more comprehensive updates.
Retitling Assets
Even after you update your trust document, it’s crucial to review the retitling of assets. Property, bank accounts and other assets must be correctly titled in the name of your trust without your ex-spouse if that aligns with your divorce settlement.
Assets not properly titled can unintentionally benefit someone you no longer wish to include.
New Beneficiaries
Your beneficiary designations — whether for real estate, investment accounts or retirement plans — should be reviewed and revised. Your ex-spouse may still be listed as a primary or contingent beneficiary unless you update the trust and any relevant asset titles.
Updating your beneficiaries is essential to ensure your estate plan distributes assets according to your wishes and avoids unintended transfers.
Conclusion
Divorce does not automatically erase your living trust but it does trigger important considerations in your divorce estate planning strategy. Understanding which changes happen through the operation of law and which require your proactive attention is key to protecting your legacy.
In California, proper handling of trust updates after divorce can be complex, and it’s wise to work with legal professionals to be confident your plan is properly updated. To give yourself peace of mind that your living trust fully supports your goals and complies with all legal requirements, contact us today for personalized guidance and support.