If you’re preparing for or in the midst of divorce, you may not be thinking about how it affects your estate plan. If you are, you may have it down as something you’ll get around to dealing with after the divorce is final. The thought of looking at even more legal documents and spending time in more legal offices may not be appealing.
Nonetheless, it’s important to consider the changes you’ll need or want to make. Some can be made at any time, while others have to wait until the divorce is final. It’s crucial to understand the consequences of not making those changes.
Your spouse’s inheritance and fiduciary appointments
Your spouse is likely prominent in your will. While under Texas law, you can’t remove them from your will (essentially disinheriting them) as long as you’re still legally married. Once the divorce is final, however, an ex-spouse is treated the same under Texas law as if they were deceased. The law states that “all provisions in the will, including all fiduciary appointments, shall be read as if the former spouse and each relative of the former spouse who is not a relative of the testator had failed to survive the testator….”
That means unless you have alternate beneficiaries listed for your spouse, the assets will pass to whoever would get them if you died without a will (“intestate”). Any “fiduciary appointment” of your spouse will also automatically end with the divorce. This can include things like being your designated health care agent and having powers of attorney (POA) over your health care and finances. Since some of these administrative appointments don’t have to go to a spouse, you can change those without waiting for the divorce to be finalized.
Could the terms of your divorce require estate plan modifications?
Your divorce agreement may require you to keep your spouse as the beneficiary on certain accounts and insurance policies. For example, a spouse who’s ordered to pay spousal support may have to take out a life insurance policy with their ex as a beneficiary to protect that source of income in the event of their death.
Every situation is highly unique. However, it’s crucial to understand the law. That’s why it’s important to have sound estate planning guidance to navigate the necessary changes to your plan (even if that plan is simply a will) as you divorce.