If you are a New York resident and you are going through a divorce, you may wonder how this will affect your estate plan. Divorce can have a significant impact on your will, beneficiary designations, powers of attorney and other estate planning documents. Therefore, it is important to review and update your estate plan as soon as possible after your divorce is finalized.
New York revocation
New York law automatically revokes certain provisions for your former spouse in your estate plan upon divorce or judicial separation. This means that any gifts, appointments or nominations that you made to your former spouse in your will, trust, life insurance policy, retirement account or other document will be treated as if your former spouse predeceased you. However, this does not apply to irrevocable trusts or beneficiary designations, which you cannot change.
Do not relay on automatic revocations
This automatic revocation may not reflect your wishes or intentions for your estate. For example, you may want to leave something to your former spouse for the benefit of your children or you may want to name someone else as your executor, trustee or agent. Therefore, you should not rely on the law to make the changes for you. You should revise your estate plan according to your current situation and goals.
You should make a new will that reflects your new marital status and distributes your property according to your wishes. You should also name a new executor and guardian for your minor children if you had named your former spouse before.
If you have a revocable trust, you should amend it or create a new one to remove your former spouse as a beneficiary or trustee. You should also consider creating a trust for your children to protect their inheritance from creditors, predators or future spouses.
Your beneficiary designations
You should review and change the beneficiaries of your life insurance policies, retirement accounts, bank accounts and other assets that pass outside of probate. You should also consider naming contingent beneficiaries in case your primary beneficiaries predecease you.
Your power of attorney
You should revoke any power of attorney that you gave to your former spouse and appoint a new agent to handle your financial and legal affairs in case you become incapacitated.