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Divorce's impact on non-probate transfers

We have detailed on this blog in the past what might happen if you fail to update your will following your divorce. Your will determines the disposition of any assets that are subject to administration during the probate process. As many of those that we here at The Law Firm of Lan Quoc Nguyen & Associates have been surprised to learn, however, there are also often assets that you may own that are not subject to probate. How might these be handled, then, if they are not addressed after you get a divorce? 

Examples of assets and property not subject to probate may include: 

  • Trust property
  • Retirement account benefits
  • Life insurance or brokerage accounts benefits (where someone along with you is named as a beneficiary)
  • Property or assets held in joint tenancy 
  • Assets designated as payable or transferable to beneficiaries upon your death

According to Section 5040 of California's Probate Code, non-probate transfers to your ex-spouse that have been detailed in estate planning instruments (or any other form of legal documentation) are treated much the same way as the provisions of your will (in that they are invalidated once your divorce becomes final). There are, however, certain exceptions to this rule. These include cases where you would not be authorized to revoke such a transfer at the time of your death, or a court order has been issued barring any revocation in favor of your ex-spouse. Should the language authorizing the transfer imply that you still want it to happen even in the event of a divorce, the court may also choose to honor it. 

You can learn more about how divorce impacts estate planning by continuing to explore our site. 

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