If you have a living trust in California, you might be wondering what happens to it in the event of a divorce.
What Is a Living Trust?
A living trust, also known as a revocable trust, is a legal arrangement that allows you to transfer ownership of your assets into a trust while you are still alive. You serve as the trustee and maintain control of your assets during your lifetime. Upon your death, the assets in the trust are distributed to your beneficiaries according to your instructions specified in the trust documents, without going through the probate.
Living trusts are popular in California because they offer benefits like privacy, flexibility, and the ability to avoid probate. However, it can complicate matters in case of a divorce.
Impact of Divorce on a Living Trust in California
- Community Property Rules: California is a community property state. This means that all assets acquired during the marriage are generally considered community property and are subject to equal division between spouses. Assets held in a living trust may still be considered community property, depending on when they were placed in the trust and other factors.
- Revoking or Amending the Trust: In California, a divorce does not automatically revoke or amend a living trust. However, it is necessary to revise the trust to reflect your changed circumstances and wishes. This can include removing your ex-spouse as a trustee or beneficiary. Consulting with an experienced attorney is crucial to making these modifications correctly.
- Beneficiary Changes: Post-divorce, you may want to change the beneficiaries of your living trust, especially if your former spouse was a significant beneficiary.
- Retitling Assets: To ensure your living trust aligns with your post-divorce financial situation, you may need to retire assets that were once jointly owned with your ex-spouse, in particular, real estate. This process may involve transferring assets back into your name, selling them, or making other changes as necessary. When it comes to real estate, you need to consult with an attorney and with a Realtor you trust.
Conclusion
It is crucial to consult with a qualified attorney who specializes in California divorce law to navigate changes to your living trust due to a divorce effectively. They can help you understand how California's specific community property laws apply to your situation and guide you in making the necessary adjustments to protect your interests and those of your beneficiaries. If you need a referral to a good attorney, reach out to me at (310) 467-2277 and I will give you a couple of names.
Here are some reliable resources for more information specific to California: California Courts - Divorce and Property
Divorce and estate planning laws are complex, and individual circumstances vary widely. Seeking professional advice from a California attorney is essential to ensure that your living trust and other estate planning documents comply with California laws and serve your post-divorce goals.