Divorce brings significant changes to nearly every area of life, from finances and property ownership to family relationships and future plans. While updating your estate plan may not be the first thing on your mind during or after a divorce, it is an important step in making sure your documents continue to reflect your wishes.
In New York, divorce can automatically affect certain provisions involving a former spouse. However, relying on the law alone may leave gaps or create unintended consequences. Reviewing your entire estate plan after a divorce can help ensure that the right people are authorized to make decisions for you and receive your assets in the future.
Review Your Last Will and Testament
Your will is one of the first documents you should review following a divorce.
Under New York law, a final divorce generally revokes certain provisions in a will that benefit a former spouse, including provisions naming the former spouse as a beneficiary or executor. In many cases, the document is treated as though the former spouse predeceased you.
However, this does not mean your entire will becomes invalid.
The remaining provisions may still stay in effect, which could create results you no longer want. For example, assets may pass to alternate beneficiaries you selected years ago, or an outdated executor may become responsible for administering your estate.
Creating an updated will gives you the opportunity to clearly state your current wishes rather than relying on automatic provisions of state law.
Update Your Power of Attorney
A Power of Attorney allows another person to manage financial and legal matters on your behalf.
If you previously named your spouse as your agent, divorce generally affects that appointment under New York law. Even so, this is an important time to prepare a new Power of Attorney naming someone you currently trust.
Your agent may have authority to handle matters involving:
- Bank accounts
- Real estate
- Bills and expenses
- Insurance matters
- Investments
- Business interests
- Other financial transactions
Having an updated document can help prevent confusion and ensure someone you trust is prepared to act if needed.
Review Your Health Care Proxy
Your Health Care Proxy identifies the person who can make medical decisions for you if you become unable to make those decisions yourself.
In New York, the appointment of a spouse as a health care agent is generally revoked upon divorce or legal separation unless the document specifically states otherwise.
After a divorce, you should review your Health Care Proxy and appoint a new agent and alternate agent who understand your wishes and are comfortable making important healthcare decisions on your behalf.
Check Beneficiary Designations
Not every asset passes through your will.
Retirement accounts, life insurance policies, annuities, investment accounts, and other financial assets may have separate beneficiary designations.
New York law may automatically revoke certain beneficiary designations involving a former spouse after divorce. However, different rules may apply depending on the type of account, and some retirement plans may also be subject to federal law.
For that reason, it is safer to contact each financial institution or plan administrator and update your beneficiaries directly rather than assuming your divorce automatically made the necessary changes.
Review:
- Life insurance policies
- 401(k) and retirement plans
- IRAs
- Annuities
- Transfer-on-death accounts
- Payable-on-death accounts
- Other accounts with named beneficiaries
You should also review your contingent beneficiaries in case your primary beneficiary cannot receive the asset.
Review Trusts and Other Estate Planning Documents
If you created a revocable living trust while married, your former spouse may have been named as a beneficiary, trustee, or successor trustee.
Divorce can affect certain provisions benefiting a former spouse, but reviewing the trust as a whole is still important. Your family circumstances, financial situation, and long-term goals may have changed significantly since the trust was created.
An estate planning attorney can help determine whether the existing trust should be amended, restated, or replaced.
Consider Your Children and Guardianship Plans
Divorce does not eliminate the importance of planning for minor children.
If you have children, review how and when they would receive an inheritance. Leaving significant assets directly to a minor can create complications, while a properly structured trust can allow you to appoint someone you trust to manage those assets until your child reaches an appropriate age.
You may also want to review any guardianship provisions in your will and make sure they still reflect your current family circumstances.
Do Not Wait to Review Your Estate Plan
A divorce represents a major change in both your personal and financial life. Your estate plan should change with it.
Even when New York law automatically removes certain rights or appointments involving a former spouse, updating your documents provides greater clarity and allows you to decide exactly who should receive your assets and make decisions on your behalf.
At Thomas J. Manzi Law Offices, we help individuals and families throughout New York review and update their estate plans after major life changes. Whether you recently finalized a divorce or simply have not reviewed your documents in several years, our team can help ensure your estate plan reflects your current wishes and protects the people who matter most.
