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Jerry Ortiz and Gloria Ortiz divorced in 2004.  As part of the divorce settlement, Jerry Graciela received a ½ million life insurance policy.  The policy had named Gloria as the beneficiary of the policy.  At the conclusion of the divorce, Jerry’s attorney had told him to change the beneficiary designation.  Jerry assured his attorney that he would do so but never did.   In 2005, Jerry married Graciela Ortiz.  Barely 3 weeks into the marriage, Jerry, a policy officer, was tragically gunned down when searching for a suspect in an assault case.  Who received the benefits of the life insurance policy?  Gloria, the former spouse!  Because Jerry had never changed her name as the designated beneficiary on the policy!  This was in spite of the fact that she had no interest in the policy and the fact that the policy was a term policy with its premiums being taken automatically out of Jerry’s paycheck each month.  (Life Insurance Company of North America v Ortiz, 535 F.3d 990)

The Ortiz case amply demonstrates the consequences of not taking steps to change your estate while going through a divorce.   If you’re going through the emotional and financial turmoil of a divorce, it is very easy to overlook your estate plan.   may be the last thing on your mind. But, once the divorce papers are filed, it is critical that you take steps to prevent your ex-spouse from making decisions on your behalf

Why would your soon-to-be ex-spouse be able to make decisions on your behalf?  It is because most married couples have “I love you” estate plans.  That is, they name each other as the sole beneficiary of their assets (home, life insurance, retirement plan etc.).  While this works well, during marriage, your spouse is most likely not the person you would choose to handle your health care or financial decisions if you become incapacitated, or inherit your estate.

Should you wait under the divorce is over before changing your estate plan?  No!  A divorce can take a few months to several years to complete.  Tending to your estate planning needs at the earliest opportunity can give you protection in a time of uncertainty and steer you toward a new beginning. 



Once you file for a divorce, all the divorcing couple’s assets are “frozen” under  an Automatic Temporary Restraining Order (“ATRO”) which the law puts in place until the divorce is final.  The intent of the ATROs is to maintain the status quo of assets and ownership interests until the division of assets is complete.  While the ATRO does restrict changes which you may wish to make to your existing plan, there are still some actions which you can take that should not violate the ATRO.  Having said that, since ever family case is different, you should always consult first with your family law attorney to make sure that any of the following acts do not violate the ATRO:

1.         Revoke your current will and execute a new one.
Even with the ATRO in place both parties are free to create a new will, or modify or revoke an existing will.  Your assets will now need to be probated if you die, but at least they pass to people you want. 

2.         Revoke any current trust you have in place with your spouse and establish a new trust in your sole name.

If you already have a joint trust with your spouse, you should review it to see what it says about your powers to revoke it.  California law prevents you from making any changes to your joint trust without notice being provided to the other spouse once a divorce is in progress.  However, it does not prevent you from preparing your own revocable trust which can be set up but not funded (a "dry" trust) until after the divorce is finalized.  Even if you die after your new trust is set up but before the divorce is complete, your will (which will designate your new trust as its main beneficiary) will ensure that your share of the community assets which you will be awarded in the divorce will avoid probate and be distributed according to your wishes, not your ex-spouses. 

If you don’t have a trust, you should think about setting one up.  If you leave assets outside a trust to your children and they are minors, a Guardianship will have to established and a Guardian appointed to handle those funds for your children.  The court will likely appoint your former spouse as the trustee.  By leaving those assets in a trust, you control who manages the money and the need for a Guardianship is eliminated.

3.         Prepare a new Advance Health Care Directive and Durable Power of Attorney for Finances.

One of the changes that you can make is to prepare new documents where you designate someone other than your ex-spouse as your health care agent (to make medical decisions for you if you become incapacitated) and attorney-in-fact (to make financial decisions for you if you become incapacitated).  If you are lying in hospital, do you really want your ex deciding whether you get surgery or not, or in control of your finances?

4.         Nominate a Guardian for your Child(ren) if you have any

Usually, if something happen to you, either a mental disability or your death, your spouse will have full custody of your children.  However, in case your spouse is also unable or deemed unfit to act as guardian for your child(ren), it is always a good idea to name someone of your choosing to make medical and financial decisions for your children.


Once the divorce is finalized, you should make sure that all beneficiary designations are changed, especially those, as in Officer Ortiz’s case which are governed under Federal law such as government pension plans, 401(k)s etc. 

With proper planning, you will have the piece of mind that comes with making sure all the necessary documents are in place to fully effect your wishes in regard to these critical issues.

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