Estate Planning And Divorce

Estate Planning And Divorce

Estate planning is something that everyone should take the time to do. However, because it is not very pleasant to think about one’s eventual demise, most people either avoid the task altogether or create an estate plan and then try to forget about it. Unfortunately, there are certain life events that require people to update or completely rewrite their estate plans. Divorce is one of those life events. Married people typically leave most, if not all, of their estates to their spouses. However, this is likely not what they want after a divorce. Whether you are only considering divorce, divorcing, or recently divorced, it may be time to reevaluate your estate plan. If you have questions about estate planning and divorce, consider contacting a skilled New York estate planning attorney at Jennifer V. Abelaj Law Firm by calling 212-328-9568 to learn more about your options. 

Estate Planning Documents To Update

When thinking about estate planning, most people immediately think of a Last Will and Testament (will). A will may be a central component of an estate plan, but there are many other documents that should also be included. When updating an estate plan due to divorce, make sure to think about your:

• Wills—People may want to change bequests, the executor, guardianship for minor children, or other details after a divorce. In many cases, it can be easier to start fresh with a new will than to try to update an existing one 
• Power of attorney—Most people do not want a former spouse to have power of attorney over any part of their lives. Therefore, after divorce, a new power of attorney can be executed naming an adult child, sibling, parent, or other trusted person. There may also be more than one power of attorney, including durable, medical, and financial 
• Health care proxy—Many people authorize a health care proxy to make health care decisions on their behalf if they are unable to make those decisions themselves. Married couples often authorize each other as healthcare proxies. However, most people would prefer to authorize another trusted person for that position after a divorce 
• Revocable trusts—If a revocable trust is part of a person’s estate plan, he or she may want to revisit estate planning after divorce. Most people remove their former spouse, as well as any of the former spouse’s relatives, from the revocable trust 
• Beneficiaries—Most estate plans include a variety of life insurance policies, retirement accounts, pensions, pay-on-death and transfer-on-death accounts, and more that have designated beneficiaries. These accounts do not pass through the will to be given to heirs but are, instead, given directly to the beneficiary named on the policy or account and should, therefore, be updated after a divorce 

Most estate planning documents can be updated before the divorce is final. However, some documents may need to wait until the divorce is final unless permission from the spouse is given.

Does Divorce Invalidate a Will?

In New York, divorce does not invalidate a will. However, according to the Nassau County Bar Association, divorce or legal separation will revoke the revocable dispositions of property made to a former spouse. This includes but is not limited to dispositions in a will and designations as beneficiaries on bank accounts, life insurance policies, pensions, and/or revocable trusts. Any appointments of the former spouse, such as executor, trustee, guardian, health care agent, or attorney-in-fact, are also revoked. The key factor is that the instrument, or document, must be revocable, which means that if a person could have revoked it during life, he or she would have. When one spouse passes away, any existing documents that were revoked due to the divorce are treated as though the former spouse pre-deceased him or her. The alternate executor would be assigned the task of probating the will, and assets would transfer to the designated alternate beneficiaries. 

Bequests and appointments, such as guardianship, to anyone other than the former spouse, will remain valid before, during, and after a divorce. The revocation applies only to the former spouse. Therefore, if your current estate plan leaves assets to your former spouse’s parents, children from a previous relationship, siblings, or others, you will need to update your estate plan if you wish to remove these beneficiaries. 

Can a Divorced Spouse Inherit?

There is a general rule of revocation that prevents a divorced spouse from inheriting after his or her former spouse passes away. However, there are two exceptions to this general rule, including:

• A legal order to provide
• A deliberate choice to include the divorced spouse

A Legal Order To Provide

In some cases, a divorce decree or legal separation agreement will require that certain benefits be maintained for a former spouse. Any legal order that requires providing for a former spouse would supersede the law that typically prevents a divorced spouse from inheriting. If you have a legal order that requires you to provide certain benefits to a former spouse, a skilled estate planning lawyer at the Jennifer V. Abelaj Law Firm may be able to help you with estate planning and divorce questions to ensure that you comply with the order.

A Deliberate Choice To Include the Divorced Spouse

Some divorcing couples remain on friendly terms and, therefore, may choose to include their former spouses in their wills or as beneficiaries for life insurance policies, retirement accounts, or trusts after the divorce is final. In these situations, the former spouses may want to create new documents after the divorce with updated dates so that the intent to include the former spouse is clear. 

What If There Is No Will?

In the event that someone passes away without a will and there is a final judgment of divorce, the divorced spouse has forfeited any rights to inherit or act as administrator of the estate. However, not having a will may complicate matters for the deceased’s heirs. Therefore, everyone should have at least a basic estate plan that includes a will. 

What Happens If You Die Before the Divorce Is Final?

Once a divorce is final, any provisions in the will that specifically benefit the former spouse are voided. If one spouse dies before the divorce is made final, however, the situation is slightly different. First, before the divorce is final, one spouse cannot completely disinherit the other. According to the New York estates, powers, and trust law, a surviving spouse is given what is called an “elective share.” This is an automatic right to a certain portion of the estate. However, this “right of election” or elective share can be eliminated using a separation agreement.

Contact an Estate Planning Attorney for Help With Estate Planning and Divorce

Estate planning and divorce can be complex. Even in a situation where both spouses agree on every point, a divorce is a major change that requires many additional changes. If you and your spouse are divorcing and you are ready to update your estate plan, consider contacting a knowledgeable estate planning attorney at the Jennifer V. Abelaj Law Firm by calling 212-328-9568 to schedule a consultation and review your options for creating a new or updated estate plan after divorce.