Updating your estate plan after divorce is essential to prevent your ex-spouse from inheriting assets, making medical decisions, or controlling your estate contrary to your wishes. While some state laws automatically revoke certain provisions naming former spouses, these protections are incomplete and don’t cover all situations. Thoroughly revising all estate planning documents ensures your assets go to your intended beneficiaries and that trusted people make decisions if you become incapacitated.
Our friends at Vayman & Teitelbaum, P.C. remind divorcing clients that finalizing the divorce itself doesn’t automatically update all estate planning documents, leaving dangerous gaps if you die or become incapacitated before making necessary changes. A high net worth divorce lawyer can address some estate planning issues during divorce proceedings, but comprehensive updates typically require working with an estate planning attorney after your divorce finalizes.
Documents That Need Immediate Attention
Your will likely names your ex-spouse as the primary beneficiary and possibly as executor. Most states have laws that automatically revoke provisions benefiting former spouses in wills, but relying solely on these statutes is risky.
Trusts don’t receive the same automatic revocation treatment as wills in many states. If you created revocable living trusts naming your ex-spouse as beneficiary or trustee, those provisions might remain valid despite divorce.
Powers of attorney for financial matters authorize someone to handle your finances if you become incapacitated. If you named your ex-spouse as agent, they could still have authority over your money unless you revoke the document.
Healthcare powers of attorney and living wills designate who makes medical decisions for you. Your ex-spouse might retain this authority unless you execute new healthcare directives.
Beneficiary Designations Require Special Attention
Retirement accounts including 401(k)s, IRAs, and pensions have beneficiary designations that typically override what your will says. These designations don’t automatically change when you divorce.
Life insurance policies pay death benefits to named beneficiaries regardless of divorce or updated wills. Your ex-spouse will receive the proceeds if you don’t change beneficiary designations.
Common accounts requiring beneficiary updates:
- Employer-sponsored retirement plans
- Individual retirement accounts
- Life insurance policies
- Bank accounts with payable-on-death designations
- Investment accounts with transfer-on-death provisions
- Annuities
Your divorce decree might require maintaining certain beneficiary designations, particularly for life insurance securing child support or spousal support obligations. Review these requirements before making changes.
State Law Protections And Their Limits
Many states have laws automatically revoking will provisions benefiting former spouses upon divorce. These statutes treat divorced spouses as if they predeceased you for purposes of inheritance.
However, these laws don’t apply uniformly to all documents. Trusts, beneficiary designations, and other non-probate transfers often aren’t covered by automatic revocation statutes.
Federal law governing retirement plans like 401(k)s can supersede state automatic revocation laws. The Supreme Court has ruled that federal law requires paying retirement benefits to named beneficiaries even if state law purports to revoke those designations after divorce.
Relying on automatic revocation creates uncertainty and potential litigation. Family members and ex-spouses might dispute whether particular assets fall under revocation statutes. Explicit updates eliminate these ambiguities.
Updating Your Will
Creating a new will ensures your assets distribute according to your current wishes. Name new beneficiaries for specific bequests and your residuary estate.
Select a different executor you trust to handle your estate administration. This person gathers assets, pays debts, and distributes property according to your will.
Update guardianship provisions if you have minor children. While your ex-spouse as the other parent typically gets custody if you die, you can name backup guardians in case both parents die or if concerns about the other parent’s fitness exist.
Include specific language revoking all prior wills to avoid confusion about which document controls.
Revising Trusts
Revocable living trusts require amendments or complete restatements to remove ex-spouses as beneficiaries or trustees. Contact the attorney who created your trust to prepare appropriate modifications.
Name new successor trustees to manage the trust if you become incapacitated or die. Choose people you trust who have the financial competence to handle these responsibilities.
Update distribution provisions to reflect your current family situation. Trust provisions that made sense when married likely need substantial revision post-divorce.
New Powers Of Attorney
Execute new durable powers of attorney for financial matters naming someone other than your ex-spouse as your agent. Choose someone trustworthy who can manage your finances competently if you become unable to do so.
Revoke previous powers of attorney explicitly. Simply creating new ones might not effectively terminate old documents, particularly if institutions aren’t notified about the revocation.
Deliver revocation notices to banks, investment firms, and other institutions where your ex-spouse might try to use old powers of attorney. Written notice protects you from unauthorized transactions.
Healthcare Directives
New healthcare powers of attorney or medical powers of attorney designate who makes medical decisions if you’re incapacitated. Remove your ex-spouse from this role unless you genuinely want them making these choices.
Update living wills or advance directives about end-of-life care. These documents express your wishes about life-sustaining treatment and shouldn’t include your ex-spouse as decision-maker.
HIPAA authorizations allow designated people to receive your medical information. Remove your ex-spouse from these authorizations unless you want them accessing your health records.
Beneficiary Designation Changes
Contact every financial institution, insurance company, and retirement plan administrator to update beneficiary designations. Don’t assume divorce automatically changes these.
Obtain and complete beneficiary change forms for each account. Simply telling customer service representatives about changes isn’t sufficient. Written forms must be submitted and processed.
Request written confirmation that beneficiary changes were completed. Keep these confirmations in your records to prove the changes were made.
Timing Considerations
Some people update estate planning documents before divorce finalizes. This timing can work if you’re legally separated and your state allows changes during pending divorce proceedings.
Review your divorce decree for requirements about maintaining specific beneficiaries. Life insurance securing support obligations, for example, might need to list your ex-spouse or children as beneficiaries.
Don’t wait years after divorce to update estate planning documents. Life is unpredictable. Dying with outdated documents could mean your ex-spouse inherits assets you intended for children, other family members, or new partners.
Digital Assets And Accounts
Update passwords and access to digital accounts. Remove your ex-spouse as authorized users on online banking, investment accounts, and other digital platforms.
Digital estate planning addresses what happens to online accounts, social media profiles, and digital assets when you die. Designate new people to manage these after your death.
Property Titled In Both Names
Address jointly owned property in your updated estate plan. Real estate, vehicles, or other assets still titled in both names need attention.
Tenancy by the entirety property between spouses typically converts to tenancy in common after divorce. This change affects what happens to the property when one owner dies.
Children’s Interests
If you have children with your ex-spouse, balance protecting your children’s inheritance against preventing your ex-spouse from controlling assets you leave to minors.
Trusts for minor children can specify trustees other than your ex-spouse while ensuring children benefit from inherited assets. These provisions let you provide for children without giving control to your former spouse.
New Relationships
When you remarry, update estate planning documents again to reflect your new spouse. Blended families require careful planning to balance obligations to children from prior marriages with providing for new spouses.
Even without remarriage, long-term partners might become appropriate beneficiaries or decision-makers replacing your ex-spouse in estate planning documents.
Working With Professionals
Estate planning attorneys specialize in these documents and understand state-specific requirements. They can review your entire estate plan and recommend necessary changes.
Coordinate between your family law attorney and estate planning attorney. Issues addressed in your divorce decree might affect estate planning options.
Financial advisors help evaluate tax implications of different beneficiary arrangements and estate planning strategies post-divorce.
Moving Forward With Estate Planning Updates
Divorce necessitates comprehensive estate planning updates to prevent your ex-spouse from inheriting assets, making medical decisions, or controlling your estate through outdated documents that don’t reflect your current wishes or family circumstances. While some state laws provide limited automatic revocation of spousal provisions, these protections are incomplete and don’t cover all situations, making deliberate updates to wills, trusts, beneficiary designations, and powers of attorney essential for protecting your intentions. If your divorce is final or pending and you haven’t updated your estate planning documents, or if you’re unsure which documents need revision, reach out to discuss comprehensive estate planning updates that align with your post-divorce reality and protect the people and causes that matter to you now.