Your Estate Plan Needs to Be Updated After a Divorce

Divorce is never simple and is actually usually quite messy. That includes annulments and legal separations. Many things are not automatic or included in the official decree. Because of this, every person should have a new estate plan drafted following a divorce.
According to New York law, if you name your spouse in your Will and then divorce, that designation is revoked and it is as if he or she has pre-deceased you.

That’s the good news. The bad news is that the divorce itself may not change the trustees, guardians, agents or others named in an estate plan. These people can still take control of financial accounts or other matters as designated in a Will, trust or other documents. It is not uncommon to name in-laws and family members as responsible parties for a testator’s assets. Depending on the status of the relationship following a divorce, it may not make sense to have an ex-spouse, or ex-in-laws responsible for managing a home, financial accounts or minor children.

Similarly, it is common, and sometimes even required, for a spouse to be listed as the beneficiary of accounts, trusts, or insurance policies. A divorce will not change the beneficiary designation. If an ex-spouse no longer wishes to list the other ex-spouse as beneficiary he must complete required forms provided by the financial institution or insurance company.

This is also true of other estate planning documents. If you had named your former spouse as your agent under a power or attorney or health care proxy, the divorce does not change that or remove that agency. New documents must be created and the financial and medical institutions must be made aware of the change. This usually entails some type of formal revocation of the former power of attorney or health care proxy.

Even before the divorce is finalized, you may want to seek professional assistance of a qualified estate planning attorney. This way you can minimize the impact, should something happen to you before the judge signs the decree. And then afterwards, there are still a number of loose ends to tie up.