Major life events, such as the passing of a loved one or the addition of a child to your family, often impact every area of your life. Not only does the dynamic of your family change, but the simplest things, such as morning routines and holiday traditions, may take on new meaning after someone comes into your life or leaves. Many people do not realize that their estate plans also face impacts after major life changes.
Divorce is one of those events that brings monumental change, including to an established estate plan. As painful as your divorce may be, you run the risk of causing even more pain if you fail to amend your estate plan in the face of this major life event. While a divorce may automatically invalidate some elements of your estate plan, it is always a good idea to review your documents after any major life change.
What changes should I make?
On the day the judge signs your divorce decree, New York law revokes your spouse's designation as beneficiary in your will in addition to other documents in your estate plan, depending on estate planning instruments you have used. While this may sound like everything is taken care of and there is no need for you to worry about making your own changes, this is not always a prudent move.
Changes in your plan do not take place until the finalization of your divorce. This means your spouse continues to have any control you have authorized in your plan. Depending on the level of acrimony between you and your spouse, you may want to consider making the following changes sooner, rather than waiting months or longer until your divorce is final:
- Power of attorney: Revoking this privilege will prevent your spouse from having access to any accounts and assets that are in your name only.
- Health care proxy: You may not want your spouse to have authority over your medical decisions if you should become incapacitated before your divorce is final.
- Your will: Even if the divorce revokes your spouse's designation as executor or beneficiary, if you should die before the finalization of your divorce, your spouse's designation remains.
- Your trust: If your trust provides for your children, your spouse may have access to it as their guardian if you should pass away during the divorce proceedings unless you change the trustee designation.
You may have addressed many of these issues if you have a prenuptial agreement, so it would be prudent to review that document with your attorney. Additionally, as you are reviewing your estate plan, you will want to give objective consideration to how the laws protect your spouse while you are still married. If you change your will then pass away during the divorce, your spouse may be able to claim his or her spousal portion of the estate through civil litigation. Your attorney can help you adjust your plan to meet your goals in this area.