Does My Divorce Affect My Estate Plan?

In short, most likely yes. When you were married, you likely created an estate plan and will with your spouse in mind. You probably listed your spouse’s name for a number of important roles like health surrogate, and primary beneficiary, among others. But your marriage has changed and so should your estate plan. This article outlines common estate planning mistakes people make during the divorce process, how to avoid them, and how to create a new estate plan that reflects your wishes. If you are getting a divorce and currently do not have an estate plan in place, this article is for you too.

 

Important Health Decisions

When you were married, you likely listed your spouse as the person to make all the important healthcare decisions should your health decline. But under Florida law, once your divorce is final, your former spouse is immediately voided as your health surrogate, leaving you with no health surrogate. Without a health surrogate, you risk leaving those important health decisions up to someone you otherwise would never have chosen for that role. So, be sure to list alternative health surrogates in your plan to make sure you are taken care of after your spouse becomes your former spouse. Or, if you would like to keep your former spouse as your health surrogate, Florida law allows for that too. But to make that happen, it must say so in your estate plan, otherwise the law will render your former spouse role as health surrogate void. 

 

Spouse as Beneficiary

Much like health surrogacy, in Florida, a divorce immediately renders a former-spouse-beneficiary as void. For example, if your spouse is the listed beneficiary under your life insurance policy, then your spouse will be void the moment the court finalizes your divorce. This applies not only to life insurance policies, but employee benefit plans, retirement accounts, and all payable-on-death accounts. If this sounds like good news, it should; this law was designed to protect divorcees from having to give their ex-spouse the benefits of their policies. But unless you assign a new beneficiary to replace your spouse, this law won’t protect you at all. Once your former spouse is void, there is no beneficiary in place which means the state will decide where the benefit from your policy should go, not you. You must assign a new beneficiary to make sure your policy benefits go where you want them to go. 

 

If you or spouse have child support obligations, pay close attention to your life insurance policy.

The divorce decree may state that you must maintain a life insurance policy for your child support obligations. If so, you must call your life insurance provider and reaffirm that your former spouse is the beneficiary under the policy immediately after the divorce is final. To do so, simply contact your insurance provider and request a form to reaffirm your former spouse. If you do not reaffirm, your former spouse will be voided from the life insurance policy. Similarly, if the divorce decree states that your former spouse must maintain a life insurance policy for child support obligations, you must reaffirm that you are a beneficiary on the life insurance policy. If you do not reaffirm, you will be voided from the life insurance policy. The bottom line is that, after your divorce, if you or your former spouse have child support obligations, call you policyholder to reaffirm that both or one of you is a beneficiary.

 

Wills/Trusts/Power of Attorney

Also, make it a priority to carefully review your will and revocable trusts, if applicable. Perhaps earlier in your marriage you listed certain assets like family heirlooms, vehicles, real property, etc. to your spouse, or even to members of your spouses’ family. Or, you may have your former spouse listed as the guardian for your minor child. While it is very difficult to revoke your former spouse’s guardianship over your child, you can at least add alternative guardians to your plan. Thankfully, much like the law mentioned above, Florida law is designed to protect divorcees from unknowingly leaving former spouses as heirs because it renders all parts of a will with the former spouse as void. 

However, while this law is designed to protect you (a divorcee with a will or revocable trust) it will not protect you if your spouse is the only heir on your will. If your former spouse is the only person named in your will, then you will be left with no heirs in your will (and no one to execute your will when you pass), leaving the distribution of your assets to the State. This is also true if your spouse is listed as your power of attorney; power of attorney ends at divorce, so make sure to think of alternatives to fill that role as well. Avoid these issues by adding alternatives, preferably trusted friends or family members, to these parts of your will or revocable trust, and for your power of attorney. 

Regarding your assets, in Florida, you cannot completely disinherit your spouse until the divorce is over. The only way to get around this law is with a prenuptial, or postnuptial agreement. And, should you pass away during the divorce process, your spouse will inherit your assets via the will. But once the divorce is final, talk to your attorney about further disinheriting your spouse from your plan, and about alternatives.

While the divorce process can be emotionally difficult, updating or even creating an estate plan will help you take the steps toward peace of mind, especially with regards to what happens after.

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