When you get divorced, you are generally at the end of a long road.  You may be ready to move on with your life, but there is one more important step to remember.  You absolutely must update your estate plan.  This is something often overlooked by people who are newly divorced, but failing to update can have serious consequences.  For example, can you imagine your former spouse receiving a share of your assets upon your passing because you forgot to remove them as a beneficiary?  Well, that is exactly the type of situation people run into when then do not properly update their estate plan after divorce.

         Updating Your Estate Plan After Divorce   If you need any more motivation to update your estate plan, consider the case of Ms. Lewis.  She passed away in 2009, two years after divorcing her husband.  In 1996 she had executed a will that left a piece of property to her husband in the event of her death and named her father-in-law as the secondary beneficiary.  She never revoked that will after the divorce and though her family contended that she wrote a new will, it was never found.  New York law automatically removed her ex-husband as a beneficiary after the divorce, but it did not remove the father-in-law.  The father-in-law presented a copy of the 1996 will to the court and the first court to rule on the matter awarded him the property.  The case is now under appeal, but this exactly the type of situation that can be avoided by updating estate plans after a divorce.  There is no need to leave this kind of decision to a judge, as updating your estate plans can clarify your intentions and ensure your assets go to the proper beneficiaries. 

            In Virginia, the law on what happens to your estate plans after your divorce is similar to the New York case mentioned, but also unique in some ways.  Usually if your former spouse is a named beneficiary in your will they will be treated as if they died before you when the will is executed.  However, if the third party making the distribution makes a payment to your former spouse, the person entitled to the assets must bring an action against them.  This can lead to undesirable situations.  Furthermore, federal accounts such as thrift savings accounts or federal employee group life insurance accounts are exempt because federal law requires that named beneficiaries associated with these accounts are updated.  Also, like in New York, the Virginia statute that automatically treats your former spouse as having predeceased you does not apply to any of their family members.  In other words, a former mother-in-law or father-in-law named as a beneficiary would still stand to inherit unless they are removed.  A final important point here is that there is no similar statute that automatically terminates a beneficiary status with respect to a trust.  Meaning if your former spouse is named as a beneficiary to a trust you created, that stipulation will not automatically terminate when your divorce is finalized.

            Basically, with respect to wills and trusts, failure to update your estate plan will create unnecessary confusion. Or worse, most of your assets could end up unintentionally either with your former spouse or someone in their family.  In either case the better plan going forward is simply to update your estate plan. 

            Something else to consider is whom you have named as proxies.  Under Virginia law if a former spouse is granted general powers of attorney, that designation is terminated upon the divorce.  However, that is not the case for medical powers of attorney.  In that instance you should formally revoke your spouse’s authority to act and send them notice of the revocation.

            In some cases a former spouse is purposely left as a beneficiary on a retirement account or insurance policy as a part of the property settlement agreement.  In these cases it is best for the beneficiary to fill out new paperwork after the divorce is finalized to ensure the intent is clear. 

As you can see many problems involving estate plans after divorce can be solved by updating your estate planning to remove ambiguities and clarify your intent.  As attorneys with experience in both family law and estate planning, we are uniquely qualified to help you update your estate plans.   Please call one of our offices at 804-325-1245 (Richmond) or 757-941-4298 (Williamsburg). 


Liz Moyer, Wall Street JournalAfter a Divorce, Split Up Your Estate Plans Too.