As a person with extensive and complex assets, you have probably put a solid estate plan in place that includes a will to protect your survivors after you die. But how a divorce affects a will is something that people sometimes don’t think about during stressful marriage breakups. They are often too busy worrying about seemingly more immediate things such as dividing assets, how much alimony they may have to pay, children concerns like custody and parenting time, and all the additional issues that must be dealt with in divorce.
But how divorce affects your last will and testament should be on your radar. Considering your will when you are divorcing is not something you should put off, especially as a high-net-worth individual. You want to be sure that the property and assets you keep in your divorce settlement go to the people you want to have them.
Your attorney can help you understand what happens to your will in divorce, the rights and responsibilities you have, and what steps you may need to take based upon your unique circumstances.
DIVORCE AND WILL REVOCATIONS
Once your divorce is final and the judge signs the divorce decree, under N.J.S.A. 3B:3-14, any interests of your ex-spouse and relatives of your ex-spouse in your will are automatically revoked. If you named your spouse the executor of your estate in your will, as many people do (although it is not required that it be your spouse), that designation is also revoked. This revocation happens without your having to do anything.
However, the law also gives exceptions as described here:
“Except as provided by the express terms of a governing instrument, a court order, or a contract relating to the division of the marital estate made between the divorced individuals before or after the marriage, divorce or annulment, a divorce or annulment.”
So, unless you have stated in your will, divorce agreement, or property division agreement that your spouse’s interests are not revoked upon divorce, they will not be.
Assuming that your divorce is final, and your spouse’s interests have been revoked, you should execute a new will right away. In fact, however, it is probably wise to execute a new will at the start of divorce proceedings so you don’t forget. It should name the beneficiaries you wish to receive your assets and the trusted person you want to act as your executor in carrying out the terms of your will.
While your divorce attorney can help you understand your rights in divorce as related to your will and help you protect your assets as you go through divorce, you may wish to engage an estate planning lawyer to assist you with the process of drafting a new will that accurately reflects your wishes for distributing your assets upon your death and who will oversee that process.
DISINHERITING A SPOUSE IN YOUR WILL
If you are feeling angry or antagonistic with your spouse, you may think about disinheriting her by removing her from your will. Even if you do so, if you die before your divorce is final, she could still potentially receive assets included in your will through an elective share claim. In an elective share claim, your spouse could receive a minimum of one-third of your estate, or more depending upon the circumstances. However, the law in New Jersey about elective share is evolving so check with your attorney about the most recent updates.
As of now, however, the elective share an been waived by an enforceable prenuptial or mid-marriage agreement. Additionally, parties cannot be living separate and apart to be successful in such a claim. And if your spouse’s own assets are greater than a third of your estate, then your spouse is probably not entitled to an elective share. This law is very complex, so you should consult with an attorney skilled in all aspects of NJ divorce to understand how it could impact you. Every divorcing person’s situation is different and will have its own unique intricacies to address.
If your spouse is the executor of your estate, it can behoove you during the divorce process to name another party you trust for this role. Doing so will remove your spouse from control of your estate should you unfortunately pass away before you have that final divorce decree in your hands.
WHAT HAPPENS IF YOU DIE WITHOUT A WILL IN DIVORCE?
When someone dies without a will, assets that are subject to probate are distributed using intestate succession laws. If your divorce is not yet final, your spouse will inherit either all or a percentage of your estate. How much they get depends on what other close, living relatives you have at the time of your death.
If you die without a will but your divorce is final, your assets will pass using intestate succession, but your ex-wife would not be a beneficiary. So, for example, if you are legally divorced and have children, your children would get everything. Or if you do not have children, your parents would inherit.
It must be explained that intestate succession law does not govern properties that would not pass through probate (and would not be included in your will if you had one). This includes many types of high-value assets such as:
- Properties in living trusts
- Property in joint tenancy agreements
- IRAs and other retirement funds with named beneficiaries
- Life insurance policies with named beneficiaries
- Bank accounts, real estate, motor vehicles and securities with payable and transfer on death designations.
UPDATING BENEFICIARIES TO ALL OF YOUR ASSETS
Certain assets that may list current beneficiaries must also be updated once divorce is final. But once a divorce is on the radar, you are not allowed to change these beneficiaries unless you have written agreement from your spouse. For example, close to the time you are ready to start divorce proceedings, you cannot change your spouse as beneficiary on your life insurance policy before divorce is final unless you have a consent order signed by both of you.
Other accounts such as retirement savings, investments, and IRAs in which your spouse is named as beneficiary will also generally require agreement by your spouse to have her name removed if close to the time you are ready to engage in divorce proceedings. And even if these assets are in your name, they may still be subject to equitable distribution in your divorce if they are considered marital property rather than separate property.
Marital and Separate Property
Generally, separate property is property that you had prior to marriage, you inherited, or that was gifted only to you. It is also property that is protected by an enforceable prenuptial or postnuptial agreement (also called a mid-marriage agreement). Marital property typically includes assets that you and your spouse obtained during marriage.
When divorcing, all assets are initially considered to be eligible for division until it is identified and proven that specific assets are separate property. Once marital property is determined, you and your spouse can agree on how to divide it between yourselves and with the help of your divorce lawyers and document that in your marital settlement agreement. If you cannot agree between yourselves, then the New Jersey court will make this decision for you.
Divorce Does Not Automatically Revoke Beneficiaries on Financial Accounts
Once your divorce is final and depending upon what assets and properties you come away with in the distribution process, be sure to update your beneficiaries right away by contacting the appropriate financial institutions and insurance companies. Even though a divorce decree automatically prevents your spouse from inheriting properties in your will, that is not the case with retirement accounts, IRAs, bank accounts, life insurance and other assets. If you fail to do so and your spouse is your beneficiary on these assets, she will receive them when you die. Be prepared to show proof of your divorce when making these changes.
HEADING TO DIVORCE—TAKE STEPS NOW TO REVIEW YOUR WILL AND ESTATE PLAN
We know you have a lot on your mind when you have filed for divorce, or your spouse has served you with a divorce complaint. Reviewing your will and other estate plans may not be the first thing that springs to mind. But it is an important part of divorcing that should not be overlooked in order to ensure your assets are distributed in the way you wish them to be upon your passing. Your divorce attorney can answer your questions and address your concerns during this process.
GET HELP FROM A KNOWLEDGEABLE NEW JERSEY DIVORCE ATTORNEY
Wills and estate planning related to divorce are a very complicated area of the law. Your financial future and that of the people you want to inherit your assets will be impacted by the decisions you make today, which is why you need experienced legal advice.
To set up a confidential consultation with a knowledgeable New Jersey law firm call [MFR] Men’s & Fathers’ Rights Divorce Lawyers at (201) 880-9770. We provide carefully tailored and knowledgeable guidance to protect the rights and interests of our divorcing clients.
Our attorneys are 100% focused in family law and can discuss with you how divorce affects your will and estate plans, how to protect your assets in divorce, and all other aspects of successfully navigating divorce and its aftermath. If you need in-depth counsel in setting up an estate plan or modifying a will, we can provide names of professionals in that area to speak with.
