It is generally understood that when couples divorce they will also be changing their estate plan to reflect the divorce, as well as to accommodate new spouses or children. However, in California, spouses have the option of a legal separation, which preserves some inheritance rights for the surviving spouse, as well as any fiduciary responsibilities.

Legally separated spouses are considered to be still married but living their lives separately. There may be a number of reasons to do this such as children or business interests, and it does affect the estate plan and inheritance rights.

(Please note that simply moving out of a shared home will not automatically equal a legal separation for estate planning purposes. It is best to have a separation agreement drafted to confirm your intention to separate.)

Property Rights

If the separation agreement between the spouses terminated property rights, then a spouse cannot inherit through intestacy (no will or trust). However, if the spouse is named as a joint owner or beneficiary of an account or life insurance policy, they can still inherit the assets in the account.

Beneficiary Rights

The separated surviving spouse will still maintain their right to inherit if they are named as a beneficiary in a will or trust. For this reason, if it is important for your spouse to inherit assets, a will or trust must be drafted with specific gifts to that spouse. In contrast, a divorced spouse named as beneficiary in a trust or will created before the divorce generally will not be a valid beneficiary.

Fiduciary Roles

Similarly, if the spouse is named as a trustee, executor or power of attorney, they can still fill that role. Because a legal separation prevents the spouses from remarrying, they may still be the best and most trusted party to fill the role. This is quite different from divorce, where those fiduciary nominations are automatically revoked.

Estate Planning for Separated Couples

Given these points, it is crucial for separating spouses to revisit their estate plan and assets, to make sure that their intentions are carried out. If they remain supportive of one another and on friendly terms, then they may wish to maintain asset distributions to their spouse, while still taking care of other heirs.

In any case, if you are contemplating a legal separation you should consult with an estate planning attorney to make sure that your assets and roles are structured correctly. Please contact the attorneys at Shoup Legal.