Beneficiary designations, powers of attorney, and wills all need to be updated and revised after a divorce. We often meet with new clients who have been married for years, and as we discuss their estate it becomes apparent that nothing was ever done to remove an ex-spouse from a life insurance policy, retirement account or other asset. Once, a former spouse was still the co-owner of the house the client and new spouse were living in! In some instances, the law will intervene to treat a former spouse named as a beneficiary as having “predeceased” you, but that is not always the case. Even if the law favors the current spouse, failing to update your estate plan creates a mess for a current spouse to deal with and can create clouds on title to property and other problems. I have yet to meet a client who would intentionally allow an ex-husband or ex-wife to benefit financially from the client’s death rather than a new spouse, children or even a charity. Below is a list of common assets that get overlooked after a final divorce decree is signed (i.e. “loose ends” that are never tied up):
- Beneficiary designations on life insurance policies
- Beneficiary designations on retirement accounts (IRA, 401(K), etc)
- Payable on Death or Transferrable on Death designations on bank accounts and investment accounts (meaning this account transfers immediately upon death to the person named)
- Title to real estate — did you execute a new deed for property you received or that your former spouse was to receive pursuant to a divorce decree?
- Title to vehicles
- Owners and signers of safety deposit boxes
- Beneficiary and Executor designations under a Last Will and Testament
- Trustee and Beneficiary designations under Trust agreement
- Agent designations under a Statutory Durable Power of Attorney (financial power of attorney) or Medical Power of Attorney
If you or your current spouse have ever been through a divorce, take the time to look at each of your assets to make sure nothing is co-owned with a former spouse and to make sure a former spouse is not unintentionally named as a beneficiary or co-signer. If you intend to name minors as a beneficiary, consult your estate planning attorney about the best way to do this.