When you make the difficult decision to divorce, there are many different things to consider. Not only will divorce obviously change your relationship status, but it can also impact your children if you have any. It can also have an effect on your home, your assets, trusts, retirement plans, and estate plans. So, how does it impact your estate plan? If you are ending your marriage here is what you should know.
Diving Your Assets
One of the first things to think about when divorcing is the division of your assets. While this can cause a lot of contention during any divorce, it may be even worse when the couple has accumulated a lot of assets during the marriage. Sometimes property that belonged to the family of one spouse becomes commingled when given during the marriage. This can make it all the more difficult to separate.
Dividing financial assets can also prove tricky. While you may be ready to drop your spouse from various financial assets, such as your life insurance policy and retirement account, doing so could result in some negative repercussions for you. That’s why it’s generally helpful to speak with a financial and/or legal professional before making any rash decisions.
Long-term Care Planning
Another thing to consider is long-term care planning. If you are placing assets into a trust, what you possess to transfer may change post-divorce. Also, your Medicaid benefits could be impacted depending upon how the assets are divided.
Divorcing can also impact your taxes. Married couples usually file their taxes jointly, but when they divorce, they do so individually. This change can have an effect on their tax planning options. Additionally, since most couples’ most valuable asset is their home, and property value generally increases, the transfer of ownership to one of the spouses can impact their capital gains tax when sold.
In California, as soon as your divorce is finalized you and your ex-spouse will no longer hold community property because you are no longer considered to be within a “community.” Therefore, what this means is that even if you make no changes to your estate plan, your heirs or the other people you designate in your will or living trust will inherit your property.
Biddle Law Can Help
Divorce is never easy and the impact it can have on your estate plan can be extremely messy and complicated. This is why it’s so important to consult with a knowledgeable and experienced California estate planning attorney who knows the current laws and has experience dealing with such important estate planning documents.
At Biddle Law, we are here to answer all of your questions and walk you through the entire process. We care about you and your loved ones and want to help in any way we can. To learn more or to schedule a consultation, contact us today!