In nearly twenty-five years of practice in California, I’ve had less than a handful of clients whose spouses passed away before the divorce was completed. The first time, I was the neutral mediator in a high conflict divorce. We reached agreements on everything, and the wife had already signed. Husband missed his signing appointment, so I called to reschedule, leaving him a voicemail message. A week later, I still had no response, so I called and left another message. A couple of weeks passed, and still no response. I called again, and his son told me that his father suffered a heart attack on the drive to my office, crashed his car, and died at the scene. He asked, “what happens with the divorce now?”
DEATH OF ONE SPOUSE BEFORE THE MARRIAGE IS FORMALLY ENDED:
If either spouse passes away before the judgment ending the marriage is entered by the court, the family law court loses jurisdiction (legal authority) over all issues, except for those already formally decided (prior orders signed by the parties and/or the judge). Even though the wife in my mediation above signed the judgment documents, since neither the husband nor the judge signed it, it’s as if the Petition for Dissolution of Marriage was never filed. Wife is not divorced; she’s widowed. And what happens to their agreements? It’s as if they didn’t exist. Probate rules take over at this point. Husband’s assets would pass to the beneficiaries of his estate plan (most often, that’s the surviving spouse). If he did not have an estate plan, his estate would pass through probate, and wife would receive all the community property and all or a portion of his separate property. Any non-probate assets, such as retirement and life insurance plans, would pass to the beneficiaries he designated in those plans.
In a more recent experience, both wife and husband signed their judgment documents AND so did the judge. As part of the agreements, they postponed the date of divorce to a future date to allow wife to stay on husband’s health insurance to allow for a previously scheduled surgery. Wife died before the date of divorce. Legally, they were still married until that future date of divorce, even though their community and separate property assets were divided by the judgment. What happens then? Again, as before, husband was widowed, not divorced. But, since there were already signed orders dividing the property they held during the marriage, those orders remained binding and enforceable.
DEATH OF ONE SPOUSE AFTER A STATUS ONLY JUDGMENT IS GRANTED:
If either spouse passes away after the court entered a status-only judgment (ended the marriage and reserved financial issues, assets, and debts to be resolved later), the court retains the ability to make decisions about these reserved issues, with the executor of the will taking the deceased spouse’s place in the divorce proceedings. With the termination of the marriage, trust and beneficiary rights under retirement plans and trusts (non-probate transfers) are automatically terminated as are the right-of-survivorship interest in joint tenancies and community property. And, unless otherwise stated in the deceased spouse’s will, a judgment dissolving the marriage also revokes all testamentary transfers between former spouses and any provision in a will nominating the former spouse as trustee, conservator, or guardian. The surviving spouse’s rights as a designated beneficiary under a life insurance policy, however, remain intact.
HOW TO PROTECT YOUR INTERESTS DURING A DIVORCE PROCESS:
You can protect your interests in case you pass away before your divorce is resolved. But before making any changes relating to your assets, consult your family lawyer to make sure you do not violate any of the Automatic Temporary Restraining Orders. You should also speak with a tax advisor since some of these recommendations can have tax implications.
Actions you can take without notice to, or permission from, your spouse or partner, or a court order:
- Change or create a health care power of attorney. This is important if you’d rather your soon-to-be ex not be the one to decide your medical care while you are incapacitated.
- Change or create a financial power of attorney. Equally important if you’d rather your soon-to-be ex not be the one making financial decisions for you while you are incapacitated.
- Create, modify, or revoke a will.
- Create, but not fund, a new single settlor revocable or irrevocable trust.
Actions that do require notice to your spouse or partner:
- Revoking a revocable trust.
- Revoking a transfer to the beneficiary of a non-probate transfer. With life insurances, you can only revoke the beneficiary if there are no issues of child or spousal support.
- Terminating the right of survivorship for real property (joint tenancy or community property with right of survivorship).
Actions that require spousal consent or a court order:
- Funding a new trust (revocable or irrevocable).
- Creating or modifying a non-probate transfer in a way that changes the prior beneficiary designation. Pension plans are controlled by the Employee Retirement Income Security Act of 1974 (ERISA) and the nonparticipant (non-employee) spouse is entitled to be the beneficiary under federal law.
Actions not allowed during your divorce: Cashing, borrowing against, cancelling, transferring, disposing of, or changing the beneficiaries on life, health, auto, and disability insurance when child or spousal support is at issue.
In a contested (litigated) divorce, couples are not typically educated about concerns related to death or incapacity during the divorce process, let alone given an opportunity to discuss solutions to them. While it is not commonly discussed in collaborative or mediation processes either (unless there are known health issues), it is a part of the discussion if your family lawyer is knowledgeable in estate planning or if your or your spouse ask about it. I am often brought in on collaborative cases as an estate planning lawyer to help couples create agreements addressing these concerns, giving a probate court clear indication of their intentions, should something happen to either spouse before they complete their divorce.
In a post-COVID era, we all know that life can change in the blink of an eye. We saw the courts completely shut down (and the continued delays and backlog), and people succumbing to an illness that did not discriminate between the young and the elderly, or the healthy and infirm; we are all on notice. If you don’t have an estate plan in place, get one. The average divorce in California can take three to five years to complete. Whether you have an estate plan or not, whether you are in a contested divorce or a mediation, talk to your divorce professionals about preserving your interests should something happen to you before your divorce is resolved. A lot can happen in three to five years. Are you prepared?