What You Should Know about Separating Estate Plans after a Divorce
There are many legal matters to attend to following a divorce, and long-term planning is often not a top priority. However, you should avoid putting off separating your estate planning documents. It is necessary to update any relevant estate planning materials that activate in the event of your death once your divorce is finalized. This way, your former spouse will not receive assets from your estate.
What Are the Consequences of Failing to Change Your Estate Plan?
If you do not update your estate plan after a divorce, it could lead to a large percentage of your assets going to your former spouse or their family. This can occur even if it was not your intention if you do not make your wishes known by changing your estate planning documents. Most states do not allow someone’s former spouse to inherit property under a will. However, other estate planning tools can remain in effect.
One Example of Post-Divorce Legal Trouble
One New York woman died in 2010 after she and her husband divorced several years earlier. Her original will stated that her husband was to receive the home and all other assets, and she named her father-in-law as the second beneficiary to the home. New York law automatically stopped the former husband from inheriting under her will, but her father-in-law’s claim to the house remained valid even after the divorce.
The woman’s children claimed that a new will was created to remove the father-in-law’s claim to the estate, but her family members were not able to find it. The result was that the court ruled in favor of the father-in-law as the rightful beneficiary to the estate. The woman’s family must now appeal the decision.
What Should You Do after a Divorce?
The main thing to remember from this case is to make sure you update your estate plans with a probate attorney after the divorce. You might have to draft a new will and redo any other documents related to your wishes. Your estate planning lawyer and other family members must also be given a copy of the new materials. You and your former spouse should also find new estate planning lawyers to avoid any conflicts of interest.
Another important consideration is naming new proxies for your power of attorney, and any other documents that give your former spouse the power to make decisions on your behalf. New proxy documents you create must also state that the previous documents are no longer valid to avoid confusion.
Last of all, update any and all accounts that have a beneficiary designation. These can be bank accounts, trusts, retirement accounts, life insurance policies, and annuities. Frequently these kinds of accounts are overlooked in the wake of a divorce. Assets held in them pass directly to the beneficiary, often contradicting the will and estate planning documents. Ensuring your wishes are followed can be as simple as filling out a new beneficiary form for the account in question.
For advice about how to separate your assets following a divorce, contact Queens probate lawyer Richard Cary Spivack, and take control of your estate plan today.