Estate Planning & Divorce

Paley & Prehn, PLC

Divorce is a major life transition, and it can leave your estate plan outdated—or worse, in conflict with your current intentions. At Paley & Prehn, PLC, we work with clients throughout the divorce process to ensure their planning keeps pace with changing circumstances. While certain updates must wait until a marital settlement agreement is in place, important stopgaps can and should be implemented during the proceedings to protect your interests and provide stability for your children in the event of your incapacity or death.

Why Estate Planning Matters During Divorce

In the State of California, certain spousal powers and beneficiary designations are automatically revoked when a divorce is finalized, but not before that. Once a divorce has been filed, you are not permitted to transfer property or to change beneficiaries on retirement accounts, insurance or other coverage and assets, but you are permitted to revoke and create wills and unfunded trusts, and you may cancel survivorship provisions on certain joint assets while both you and your spouse are still living – with proper notice to your spouse.

An estate plan created during marriage may leave significant authority and benefits to your spouse even if divorce proceedings have commenced. Thoughtful interim planning with an estate planning attorney allows you to:

• Prevent an estranged spouse from retaining authority over your medical or financial decisions if you become incapacitated.
• Protect your minor children by updating guardianship designations.
• Preserve clarity around how your assets should ultimately be managed and distributed.

What Can Be Done While Divorce Is Pending

There are certain restrictions on asset transfers and beneficiary changes once a divorce has been initiated. However, there are still meaningful steps you can take, including:

• Replace your spouse as decision-maker in your Advance Health Care Directive with someone you trust.
• Authorize someone other than your spouse to handle financial and legal matters if you lose the ability to do so through a new Durable Power of Attorney.
• Review pre-nuptial and post-nuptial agreements to ensure they align with your estate planning goals.
• Drafting Updated Estate Planning Documents – Create a separate trust and pour-over will to reflect your intentions, which can be finalized and funded once the marital settlement agreement is complete.

As part of divorce mediation, consider addressing guardianship, education, inheritance management, and special needs planning for your children, if necessary, so both parents’ intentions are clearly documented. Coordinating these issues early can prevent future conflicts and reduce the risk of misunderstandings or disputes.

After the Divorce Is Final

Once the marital settlement agreement is finalized, a comprehensive review of your estate plan is essential. Any joint trust should be replaced with your own separate trust. You should also revise beneficiary designations on life insurance and retirement plans in accordance with the divorce terms. If you worked with an estate planning attorney during the divorce process and your documents are in place, this is the time to fund your new trust with the assets that are now your separate property.

Why It Matters

Without updated planning, an ex-spouse may retain authority or benefits you never intended. By reviewing your estate plan both during and after divorce, you ensure that your wishes are honored, your children are provided for, and your assets pass according to your current intentions.

Why Clients Choose Paley & Prehn

At Paley & Prehn, PLC, we guide clients through every stage of divorce-related estate planning—from interim stopgaps during proceedings to comprehensive planning after settlement.