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How to handle divorcing tenants

I have tenants who are starting divorce proceedings after 5 years in my California rental. The husband always paid the rent from his company and I assume also paid the security deposit since the wife doesn’t work. He wants to stay on with their daughter. The mom is living with another man now. She emailed me a letter saying she was vacating. As it happens, I need to raise the rent anyway, so I am thinking of drawing up a new lease for just him. Since he will still be living there, I won’t have an opportunity to do a normal move out inspection and the time afterwards to make sure no surprise damages exist. How should I handle the situation as far as the security deposit goes? If he paid it originally can it just carry forward? Do I need to draw up a paper for the wife to sign? And as far as “move in” condition goes, would the original one just carry forward legally too? Any other wisdom you have is appreciated as well!

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