When you married, you likely named your spouse in your will as the beneficiary of all or at least a portion of your estate if you subsequently have children. You may also have named your spouse as a beneficiary in your IRA, 401K, life insurance, and other accounts, including trusts. If you have a living will, health care proxy, durable power of attorney, then your spouse could be the one you named to make material and essential decisions about your medical care and finances in the event you become incapacitated. So, what happens to your estate plan when you divorce?

The divorce process can take at least six months and often more than one year. During this time, you may still have your estranged spouse as the beneficiary in a will and other accounts. If you die or become incapacitated by illness or injury, your current spouse will benefit from your will and be in charge of your estate and perhaps of your own medical care. Since your marriage is not going to survive when you filed for divorce, it is highly recommended that you discuss with an experienced divorce lawyer what you need to do regarding estate planning. 

Your Will

Upon divorce, Massachusetts law automatically revokes all bequests in the will concerning your ex-spouse, including being named as executor, guardian, or trustee. However, since anything can happen in the interim between filing for divorce and when it is finalized, you can and should revoke your present will and draft a new one. If you remarry, you can again amend or draft a new will naming your new spouse as executor, trustee or to take over any other fiduciary role. 

If you, your new spouse, or both of you are bringing children into the marriage, you have to consider how or if you want to provide for them in your will and other estate documents. 

Non-Probate Designations

A will is only part of a comprehensive estate plan. Although your ex-spouse will be automatically removed as a beneficiary in your will when the divorce is final, the law does not affect other non-probate instruments such as an IRA, retirement accounts, other trusts, and insurance policies. If you fail to remove your spouse as beneficiary, that individual will directly inherit those assets when you die since they are not subject to probate. 

Although revocable trusts funded by a pour-over will are subject to the rule where your ex-spouse’s interests are automatically revoked, this only applies to assets passing to the trust under the will. If a trust is funded during lifetime, or the trust is funded by a life insurance policy or retirement accounts, then the divorce will not affect the ex-spouse who is a beneficiary or trustee of the funded revocable trust. However, you can amend the trust to remove your ex-spouse or leave it alone if this is your intent. 

However, if you have an irrevocable life insurance trust, you cannot amend or change it to remove your named ex-spouse as beneficiary, trustee, or successor trustee. This issue can be addressed in your Separation Agreement by having your ex-spouse voluntarily resign as trustee, and waive any benefits or right to be a successor trustee. You may have to offer compromises with your spouse to achieve this. If your spouse balks at this, then you could, if the trust is funded by a term life insurance policy, allow the policy to lapse, and then create a new irrevocable trust and purchase a new policy to fund it. But if the trust is funded by a whole life policy, allowing it to lapse may not be advisable since it carries substantial costs. 

Health Care Proxies, Durable Power of Attorney

Health care proxies provide for someone to make decisions about your health care if you become incapacitated. This includes the type of treatment to administer, if surgery should be performed, and what pain medication to administer. Revoke your present proxy and draft a new one naming a trusted individual to make these decisions for you. 

A durable power of attorney is granted to someone who will make decisions and perform certain tasks relating to your financial affairs if you become incapacitated. Tasks include writing checks, selling assets, remodeling your house, trading stocks, and any other financial decision. You should name another trusted individual to act in this capacity before your divorce is finalized. If you remarry, you can easily revoke this and name your new spouse to take on this role. 

Consider a Prenuptial Agreement 

One way to protect your assets and to avoid many disputes in a divorce is to draft a prenuptial agreement before you remarry. You should seriously consider one if you are bringing children into a new marriage to ensure you retain certain assets that you will want them to enjoy so that your new spouse cannot claim them in the event you do divorce and you lack such an agreement.  

Consult Divorce Lawyer Heather M. Ward

A divorce is more than just issues of custody, support, and division of assets and debts. Estate planning is an essential part of any family relationship and needs to be addressed when you marry as well as when you divorce. Call Boston divorce lawyer Heather M. Ward at (617) 903-8955 for a free consultation regarding estate plans in the event of a divorce along with any other family law concerns.