Divorce and the impact on your Estate and Finances
Bottom line, if you get divorced you should take a good long hard look at your Will, Trusts, Estate Plan, Power of Attorney, Living Will, Health Care Proxy, and all the beneficiary designations on your financial accounts. In fact, you should do it before you file for divorce….what happens if you die in the process.
Generally, you will have named your now divorced spouse as your beneficiary, executor, guardian, trustee and on your Power of Attorney, Health Care Proxy and Living Will. You probably don’t want him/her there after divorce, with the exception of the trustee for your children and guardian piece. And, you probably don’t want him to have the power to pull the plug or withhold treatment in your Health Care Proxy (well, maybe your divorce went better than mine).
You certainly don’t want him/her to have power over your affairs from the Power of Attorney. Probably the worst outcome is if he or she is named as a beneficiary on your retirement accounts, life insurance, or bank accounts.
Fortunately, many states make some provision for this by removing the divorced spouse from all roles in the Will and treat them as predeceased. Connecticut has such a law which revokes any dispositions of property and the former spouse’s role as executor and trustee in a Will. 45a-257c.
New York’s law goes further and revokes beneficiary designations and other similar statuses. EPTL 5-1.4.
Since state law varies, whether you live in Bethel CT or Somers NY matters.
So, the smart thing to do is to sit down after divorce with your estate lawyer, review your estate plans, financial documents and make changes if necessary.