How does my impending divorce affect my estate plan?

On Behalf of | Apr 24, 2024 | Estate Planning And Administration |

The dissolution of a marriage invariably brings significant changes to one’s life, and estate planning is no exception. In New York, a divorce can have profound implications on an existing estate plan, particularly concerning wills, trusts and designated beneficiaries.

Under New York’s Estates, Powers and Trusts Law, Section 5-1.4, divorce automatically revokes any dispositions, appointments or nominations made to a former spouse in an estate plan. This law treats the former spouse as having predeceased the testator, effectively removing them from wills and trusts unless the governing document explicitly states otherwise.

Depending on your estate plan, this can be great news, but it also means that your estate plan now likely has big holes that need to be patched to ensure that your wishes are fulfilled if you are incapacitated or pass.

Impact on wills

Similarly, a divorce in New York means that any bequests to a former spouse outlined in a will are also automatically revoked. This includes any fiduciary roles they may have been assigned, such as executor or trustee.

This is why part of the divorce process should be a review of your estate plan. Review and update your wills as needed to ensure your assets are distributed according to your current wishes, not based on your wishes when you were happily married.

Trusts and beneficiary designations

Similarly, trusts and beneficiary designations on accounts, like life insurance policies and retirement plans, are affected. If a trust was revocable, the former spouse’s role as a beneficiary or trustee is automatically revoked upon divorce. However, this does not apply to irrevocable trusts, which remain unchanged unless amended through legal processes.

Joint tenancies and real estate

Divorce also impacts real estate held in joint tenancy. The right of survivorship typically associated with joint tenancies does not apply if the co-owners are divorced, which alters how property is handled upon the death of one party.

Estate plan revisions

Post-divorce, it is advisable to conduct a thorough review of all estate planning documents. This includes not only wills and trusts, but also powers of attorney, healthcare proxies and living wills. Updating these documents can prevent unintended consequences and ensure that the estate plan aligns with your new circumstances.