Remarried? Does Your Living Trust Mention Your New Spouse….

Nearly 49% of all marriages in the United States contained a remarried spouse and for the state of California it is believed to be even higher. It’s important that estate planning documents are updated and beneficiary designations on accounts such as annuities, life insurance policies and retirement plans are changed accordingly.

If a person creates a Will or a Trust in California and then gets married after signing that document, that person’s new spouse automatically becomes a beneficiary by law. Many times people mistakenly believe that if their spouse is not mentioned in their existing estate plan, the spouse will not receive anything after death. While this may be exactly what the parties intended, the law states otherwise. The law is referred to as “omitted spouse.”  It assumes that if a Trust or Will is made before marriage and never changed to reflect the new marriage, then the person forgot to update it for the new spouse.  Consequently, the new spouse will get his or her share of the estate.

It is amazing just how easy it is to avoid this result.  All it takes is simply updating the estate plan to reflect the new marriage. It the intent is to disinherit the spouse, then that should be clearly indicated in the document.  And this is another reason why it is so vitally important for people to have their estate planning documents and situation reviewed every few years.  We often have clients of ours question why they need to come in to review their documents, after all, nothing has changed.  Then we sit down with them and find out they just go remarried.  Without the review, the remarriage problem would have never been discovered until the client died.  Further, on these reviews, we often find that not only do the estate planning documents need to be updated but the life insurance beneficiary designations need to be changed

If avoiding the omitted spouse law is so easy, then why are attorneys called upon to litigate so many omitted spouse cases? Primarily it’s because the law of omitted spouse is not widely known.  In fact, it’s usually a huge surprise to the beneficiaries after a parent dies. The blood related beneficiaries believe that since the spouse is not mentioned in the estate plan, he or she should receive nothing from the estate. They are often shocked and hurt when they find out how the omitted spouse law automatically opens the door for the new spouse to claim beneficiary status in the estate.