When you are in the midst of a divorce, there is a lot of paperwork to do and many details to keep track of. Unfortunately, some details are frequently overlooked, and failure to attend to them can cause trouble years after the divorce has been finalized.
Estate planning is a good example. Individuals who draft an estate plan during their marriage often have their spouse listed as the primary beneficiary of their assets and possessions. Their spouse may also be listed as the beneficiary on life insurance policies and similar documents. If beneficiary designations are never changed after divorce, the oversight could lead to some messy court battles.
Although it did not happen here in Missouri, a recent case is a cautionary tale of what can go wrong when wills and estate plans are not updated to reflect a divorce. In New York, the family of a deceased 43-year-old woman is currently involved in a legal dispute with the woman’s former in-laws.
The dispute concerns a $200,000 home that the woman left to her then-husband in a 1996 will. Her father-in-law was named as a secondary beneficiary. The couple got divorced in 2007 and she died a few years after that.
Although she forgot to change her estate planning documents, her ex-husband was essentially taken off of her will because of a state law that automatically cuts ex-spouses out of wills in divorce. Unfortunately, her former father-in-law remained on the will, and her family has been unable to locate a more current version of her will than the one she drafted in 1996.
Estate plans and other documents should be updated after divorce to ensure that there are no legal snags if the unthinkable should happen. And there may be other documents that need to be changed during the divorce itself, including joint retirement accounts. Your attorney will likely be able to advise you on which documents can and should be amended now, and which should be amended after the divorce.
Source: The Wall Street Journal, “After Divorce, Separate Your Estate Plans Too,” Liz Moyer, Feb. 20, 2015