When you get divorced – or married – you should always review your estate plan. State laws generally assume that you will want to make changes on either a divorce or remarriage, but the changes they make are incomplete, and can have unexpected results. The family of Robyn Lewis found this out the hard way when this New York resident passed away. Her 1996 will left everything to her then-husband. She named her then-father-in-law as the next beneficiary. The couple divorced in 2007. The court ruled that the divorce removed the ex-husband but left in her now ex-father-in-law. Now, Robyn’s family is fighting her ex’s family in a losing court battle to keep a home that has been in Robyn’s family for generations. In 2013, the US Supreme Court gave a $124,558 life-insurance policy to the ex-wife. Even though the man had remarried, he had never changed the beneficiary on the life insurance policy.
During the Divorce
Your incapacity documents (Advance Health Care Directive and Durable Power of Attorney) typically name your spouse. There are no legal barriers to you changing these documents immediately. Your will or trust should be reviewed by an experienced estate planning attorney to see what further immediate steps you can take while the divorce is pending.
After the Divorce
When the divorce is final, you should complete a new estate plan if you weren’t able to change things completely during the divorce. In California, there are restrictions during the divorce about changing life insurance and retirement beneficiaries. After the divorce is final, subject to any court orders, you can now change the beneficiaries for these assets. For company sponsored retirement plans, you will typically need a specific court order called a Qualified Domestic Relations Order. Failure to make these changes during and after a divorce could leave your ex as the beneficiary and possibly in charge of making important financial and medical decisions for you.