Just as it has on other areas of your life, divorce will have a significant impact on your estate plans. Wills, trusts, beneficiary designations, powers of attorney, and advance directives are all affected in divorce. Estate plans should be carefully reviewed as changes to all of these will probably be required to protect your interests and those of your loved ones and reflect life going forward without your spouse.
Every divorce situation and estate situation is different and has its own complexities, including in high-net-worth divorce cases. It is to your advantage to get guidance from an experienced divorce law firm in New Jersey that will help you understand your rights and responsibilities and make sure that your interests and those of people you wish to be your beneficiaries are safeguarded during the process of ending your marriage and after your marriage ends.
LAST WILL AND TESTAMENT
Under New Jersey law (N.J.S.A. 3B:3-14) any interest your spouse has in your will as a beneficiary and/or executor will be automatically revoked as soon as your divorce becomes final. This also goes for the interests of any relatives of your spouse. Because the revocation is automatic, you don’t have to worry about your ex-spouse inheriting assets through your will as long as your divorce is final; you will still need to draft a new will after divorce to update your beneficiaries and estate executor. However, until the Court executes the final judgment of divorce, your spouse is still considered a spouse and will be considered the beneficiary of your will unless you change it more immediately upon the start of entering into divorce proceedings. The same applies vice versa. It is imperative that once a decision has been made to divorce, that you contact a trust and estates attorney to revise and update your Last Will & Testament. Our Hackensack Attorneys work with a lot of reputable attorneys in this field and can provide you with a recommendation based on the complexity or ease of your estate.
REVOCABLE & IRREVOCABLE TRUSTS
Your revocable living trust may have been dissolved when dividing assets in divorce. You may need to establish a new trust to reflect your current life circumstances. If you named your spouse as beneficiary in a trust or as a trustee with the responsibility of overseeing the trust and administering its terms, changes will need to be made in your post-divorce estate planning.
You or you and your spouse may have established irrevocable trusts before or during your marriage for financial or personal reasons. Irrevocable trusts are not usually subject to change as they are no longer “owned” by you or your spouse, but there can be exceptions. If all beneficiaries and the trustee agree or if there is an order by the court to modify the trust, the trust may be subject to change, and that change could potentially affect your estate planning after divorce.
FINANCIAL ACCOUNTS
Beneficiaries named on bank accounts, IRAs, retirement savings, and life insurance policies are not automatically revoked upon divorce. You will need to contact financial institutions in divorce to remove your spouse as beneficiary on these accounts. You cannot remove your spouse until your divorce is final and will typically be required to show proof of divorce to do so. However, if there are any orders in the divorce decree to keep your spouse on retirement accounts or life insurance policies, you will have to do so.
FINANCIAL POWER OF ATTORNEY
As a financially savvy individual, you probably appointed someone to handle your money matters for you in case of incapacitation. The person you appointed may well have been your spouse. This document will need to be amended after divorce if you do not want your former spouse to have control of your finances if you are unable to take care of banking, taxes, your business concerns, and other financial matters yourself.
MEDICAL POWER OF ATTORNEY AND LIVING WILL
Both the medical power of attorney and living will are legally binding documents that allow the person you designate to make healthcare decisions for you when you can’t make them for yourself.
Living Will
The living will, also called an advance directive, addresses only end-of-life decisions. A living will describes what measures you want to have taken for your comfort and to sustain your life, such as whether you want nutrition and hydration given to you or CPR performed to keep you alive. Your designated agent can ensure that your wishes are carried out.
Medical Power of Attorney
The medical power of attorney, or healthcare proxy, can apply anytime you are physically or mentally incapacitated and are unable to make healthcare-related decisions for yourself. Your healthcare proxy will make them for you, so, of course, you want someone you trust with your best interests in this role.
Many people appoint their spouse as their healthcare agent in these documents. But when your marriage is over, you probably do not want your ex-spouse to be able to make these decisions for you. You will need to draft a new medical POA and living will naming another agent for healthcare decisions.
DON’T WAIT TO REVIEW AND REVISE YOUR ESTATE PLANS
While we know you have numerous decisions to make in divorce that can feel more immediate than estate planning—including who will get the family house, how to protect your business from your spouse, how to ensure you do not pay an unfair amount of alimony, as examples of just a few concerns—you should undertake gathering, reviewing, and revising your estate plans as soon as possible. You do not want anything to come back and bite you in the future, such as your ex-spouse inheriting your assets or having control over life-and-death healthcare decisions.
CONTACT AN EXPERIENCED NEW JERSEY DIVORCE LAWYER FOR HELP
The attorneys at [MFR] Men’s & Fathers’ Rights Divorce Lawyers can advise you about New Jersey laws governing changing estate plans during divorce and exactly when you can or cannot do so. We will inform you of your rights once changes have been made and also discuss how updates to your spouse’s estate plans will impact you.
Don’t wait to reach out to our law firm to arrange a confidential consultation. Call (201) 880-9770. We provide high-quality legal counsel in all areas of divorce. If you need assistance drafting new or revised estate documents, we can also refer you to professionals who are focused in estate planning.
