Estate Planning and Divorce
Sept. 21, 2023
Divorce can cause a number of complications in many areas of your life. In addition to the emotional stress and economic hardship that may result from ending your marriage, you also need to consider what changes need to be made to your estate planning documents after your divorce is finalized.
Contrary to popular belief, signing your divorce papers does not automatically remove your former spouse from your estate plan. Instead, you will have to go through most of your estate planning documents to remove your ex-spouse’s name from the paperwork. Not getting this part of divorce correctly can result in some unwanted consequences, such as your former spouse making a claim on your estate when you can no longer do anything about it.
Our attorneys at The Law Office Of Corey J. Rossi can explain the impact of divorce on your estate plan and help you understand what changes to make to your estate planning documents when divorce looms on the horizon, you are in the process of ending your marriage, or your divorce has been finalized. We provide experienced guidance to clients in Tonawanda, New York, and the surrounding areas, including Wheatfield, Amherst, and other parts of Niagara County and Erie County.
How Divorce Affects Your Estate Plan
While it is recommended to review your estate plan periodically, divorce is one of those major life events that may require immediate changes to your existing estate planning documents, including your Last Will and Testament, living trust, power of attorney, and others.
In some states, a divorce decree automatically voids the existing will and certain other estate planning arrangements once a divorce is finalized. In New York, divorce does not invalidate the entire Last Will and Testament. Instead, only the provisions concerning your ex-spouse will be revoked after your divorce.
In most married couples, spouses feature prominently in each other’s estate plans. During the marriage, spouses may name one another as beneficiaries of their will and trust, not to mention that many name their spouse as the executor of their estate.
Updating Your Estate Plan After a Divorce
Changing your estate planning documents after a divorce accomplishes two things:
It ensures that your former spouse will not be able to assert a claim to your assets and finances; and
It ensures that your estate plan is up to date and reflects your current, post-divorce wishes and circumstances.
Estate plans created during the marriage should be revised as soon as possible after your divorce is finalized. “Why not update my estate plan while the divorce is pending?” some of you might be wondering. The answer is simple: you may be legally prohibited from making certain changes to your estate plan while your divorce is still ongoing.
Updating your estate plan after divorce usually involves:
Modifying your will. Often, married individuals who write a will name their spouse as the executor of their estate, not to mention that the document may also stipulate that their spouse would receive most, if not all, of their assets after the testator’s death. After your divorce is final, go through the entire document to remove your former spouse from the will unless you want him/her to inherit something even though you are no longer together.
Changing your beneficiary designations. Many people completely forget to change their beneficiary designations on their life insurance and financial accounts. Typically, when people are married, their spouse is automatically added as the primary beneficiary on bank accounts, retirement accounts, and life insurance. After a divorce, you may no longer want your ex-spouse to be your beneficiary, which is why you will have to remove your former spouse’s name and select new beneficiaries.
Amending your trust documents. Married couples often name their spouse as either their trustee or the beneficiary of a trust. If your trust is revocable, you can make the necessary changes to the document to remove your ex-spouse’s name from it. However, problems may arise if your trust is irrevocable, as the assets held in an irrevocable trust are no longer owned by you or your spouse. If that is the case, you might want to discuss your legal options with an attorney.
Revoking or changing your power of attorney. After a divorce, you will probably not want your spouse to be named in a power of attorney (POA) to have the authority to handle your personal affairs, medical care, and finances in the event of your incapacity. In that case, you can either (a) revoke the POA if you do not feel comfortable granting someone else power of attorney or (b) change the document to appoint someone you trust to make decisions on your behalf.
When making changes to your estate plan after a divorce is final, you might want to get legal counsel. An experienced attorney will make sure that all aspects of your plan are considered and the necessary provisions are revoked or updated to remove your ex-spouse from legal documentation.
Let Our Experience Guide You
Marriage and estate planning are interconnected in a number of ways, which is why you should never overlook the effect of divorce on your estate plan. If you are thinking about ending your marriage or have finalized your divorce, you might want to get guidance from an attorney. Our attorneys at The Law Office Of Corey J. Rossi can help you protect your assets when navigating the intricacies of updating your estate plan after divorce.