Pasternak & Fidis Reporter
How Divorce Affects Your Estate Planning Documents
After a divorce, the last thing on most people's minds is contacting their estate planning attorney. However, if you fail to revise your estate planning documents after your divorce, your former spouse might still be a beneficiary of your estate and may continue to be a fiduciary under your will, revocable trust, power of attorney, or advance health care directive. Below is a table that summarizes how divorce affects these documents under D.C., Maryland, and Virginia law.
D.C. Maryland Virginia
Wills Divorce and final property settlement revokes the entire will. If the testator does not execute a new will, or republish his or her old will, he or she will die intestate. Divorce revokes all provisions of a will relating to the former spouse, unless otherwise provided for in the will or the divorce decree. Divorce revokes a bequest to a former spouse, unless otherwise provided in the will. The estate is distributed and a personal representative appointed as though the former spouse predeceased the testator.
Revocable Trusts Divorce does not revoke a provision in a trust relating to a former spouse. Divorce revokes all provisions of a trust relating to a former spouse, unless otherwise provided for in the trust or the divorce decree. Divorce does not revoke a provision in a trust relating to a former spouse.
Annuities, Life Insurance, and IRA Beneficiary Designations Divorce does not revoke a former spouse's beneficiary designation status. Divorce does not revoke a former spouse's beneficiary designation status, unless a property settlement or divorce decree evidences a clear intent to deprive the former spouse of the interest. Divorce revokes a former spouse's beneficiary designation status. The death benefit will be paid as if the former spouse had predeceased the decedent. However, divorce does not alter the former spouse's beneficiary status if the decree of divorce, or a written agreement of the parties, provides that the former spouse's beneficiary status should continue, and it does not alter any death benefit payable to a trust.
Private Qualified Retirement Benefits (e.g., 401(k)s) and Employer-sponsored Life Insurance Divorce does not revoke a retirement account or life insurance beneficiary designation that is governed by federal law (ERISA), which covers most private sector retirement plans and employer-sponsored life insurance. Same Same
Powers of Attorney (POAs) Divorce does not revoke the former spouse's authority to act under the POA. An agent's authority terminates when an action is filed for the dissolution of the agent's marriage to the principal, or for their legal separation, unless the POA otherwise provides. An agent's authority terminates when an action is filed for divorce of the agent's marriage to the principal, unless the POA otherwise provides.
Advance Health Care Directives An agent's authority terminates upon divorce, unless the advance health care directive otherwise provides. The agent's authority is not revoked by divorce. Same as Maryland.
Statutes in D.C., Maryland, and Virginia that automatically revoke a former's spouse's status as a fiduciary or a beneficiary only apply after a legal dissolution of a marriage. They do not apply when a couple is merely separated. However, some estate planning documents can be changed prior to divorce while others must await the divorce or execution of a marital settlement agreement.
Some marital settlements create obligations to take effect at death, such as an obligation to maintain life insurance for a former spouse or children. Upon divorce, you should take the following actions:
Update the beneficiary designations of your annuities, life insurance policies, and IRAs.
File a new beneficiary designation with the Plan Administrator for retirement benefits, such as a 401(k), and employer-sponsored life insurance.
Execute a new or amended will, revocable trust, and power of attorney.
Revoke your advance health care directive and execute a new directive.
This article does not address the effect of divorce on an irrevocable trust. That will be the subject of a future article.
In light of the effect of divorce on an estate plan, it is critical that you consult with your estate planning attorney to ensure that your estate plan is in accordance with your wishes.
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