Estate Planning Blog

Divorced? It’s Time to Update Your Estate Plan

Most people create their estate plans while they are married—leaving all of their assets to the surviving spouse and putting the surviving spouse in charge of their affairs upon death or incapacity. However, if you’ve recently gotten divorced and haven’t touched your estate plan since, an update is long overdue.

Perhaps most obviously, you should update your Last Will and Testament to name a new beneficiary (or beneficiaries) of your estate, assuming you no longer want to leave everything to your now-ex-spouse. In most cases, during a divorce, you may be able to seek permission to go ahead and change your beneficiaries without waiting for the final resolution of your case. It is not uncommon for one spouse or the other to change the beneficiary of their accounts to their children or to someone other than their soon-to-be-divorced spouse during the middle of a divorce. While some states have laws that automatically remove an ex-spouse from a Last Will after a divorce (essentially treating them as though they predeceased the testator), it’s best not to rely on those laws, as doing so may result in confusion, messy legal processes, and even potentially a partially intestate estate, meaning that your assets will pass to beneficiaries designated by statute, which could be very different than the beneficiaries named under your Last Will. Updating your Last Will officially will ensure that there is no ambiguity regarding the distribution of your assets. You should also be sure to review your Last Will to make sure that it does not attempt to transfer any assets that you no longer own, due to the terms of the divorce.

Besides your Last Will, it is essential to update your beneficiaries on other important accounts and documents such as life insurance policies, retirement accounts, or pay/transfer-on-death accounts. While similar laws may remove an ex-spouse from these beneficiary designations as well, as stated above, it could be disastrous to rely on these laws. For any beneficiary you designate, it is also crucial to designate alternates and that you know the consequence as naming minors as beneficiaries of said account. In addition to designating new beneficiaries, you should also designate a new personal representative, healthcare surrogate, and attorney-in-fact for financial purposes if your current agent is your ex-spouse, in order to name someone else to make decisions for you upon your death or incapacity.

Finally, if you have any children under the age of 18 or other minors in your care, it is crucial that you should name a guardian for them in the event of an untimely death. Usually, guardianship will not be assigned to a third party unless both parents are deceased or deemed legally unfit to parent, such as in the case of addiction, incarceration, or abuse. Even in that situation, most judges in family court are very cautious in terminating one parent’s rights if that is the only parent available; it would take extreme measures to terminate a parent’s rights. However, if you have legitimate reasons your ex-spouse would be legally unfit to receive custody of your children in the event of your death, stating such in your Last Will (while no guarantee of any result) can help to build your case and make sure your children are taken care of in case of disaster.

As with any major life event, it is essential to update your estate plan in the event of a divorce. To review and update your plan to fit your needs, contact McBrayer today.

Su H. Kang is a Member of McBrayer. Ms. Kang’s practice focuses primarily on family law and domestic relations, handling matters of divorce, spousal maintenance, division of debt and property, and child custody and support. She works primarily in the firm’s Louisville office and can be reached at skang@mcbrayerfirm.com or at (502) 888-1833.

Phillip A. Pearson is an Associate of McBrayer Law. His practice focuses primarily on estate planning and administration in addition to tax planning. He works in the firm's Louisville office and can be reached via email at ppearson@mcbrayerfirm.com or via phone at (502) 327-5400, ext. 2341.

Services may be performed by others. This article does not constitute legal advice.