Frequently Asked Questions
Estate Planning and Divorce
I am getting divorced. Is there anything I need to do regarding my estate plan? It always is a good idea to review your estate plan anytime you have a significant change in your family circumstances, including divorce.
My spouse and I already have wills. Do I need a new one? Texas law automatically nullifies a bequest to your former spouse in a will, if the will was made before the divorce, so that the property subject to the will would be distributed as though the former spouse had predeceased you. You might need to change other things, however, such as the trustee of any trust created for your children, and the guardian of your minor children. Of course, you may want to change your will prior to your divorce so that your soon-to-be ex-spouse won't benefit from it if you die before the divorce is final. Also, you may want to leave your property to someone other than the person who stands to take it under your current will, once you are divorced.
I think we gave each other a power of attorney. How can I revoke that? Unless you state otherwise, your appointment of a spouse dissolves on divorce, but you may want to revoke any powers of attorney before the divorce is final.
A statutory durable power of attorney (which authorizes your agent to act for you in property and financial matters) generally can be revoked by a statement in writing delivered to the agent. The specific terms of the power of attorney you signed may require you to take other action, such as filing your revocation in the public records. You also should be aware that, unless the terms of the power of attorney provide otherwise, your revocation may not be effective as to a third party, unless that party receives actual notice that you have revoked the power.
If you have signed a medical power of attorney, you have the right to revoke the authority granted to your agent by informing your agent or your health or residential care provider orally or in writing or by your execution of a subsequent medical power of attorney.
What about my insurance? If your life insurance policy named your spouse as beneficiary, Texas law will ignore this designation after your divorce, unless the divorce decree provides otherwise. Nevertheless, you always should review your beneficiary designations on your life insurance and your retirement plans, pensions, annuities and IRAs at the time of your divorce. It is important to coordinate your beneficiary designations with your estate planning documents to avoid potential tax and estate administration problems after your death and to make sure that any death benefits payable to a minor or incapacitated person are directed to a trust for that personís benefit. Properly handled, this may avoid the need to create a guardianship.
My spouse and I have a living trust instead of a will. Is my spouse automatically kicked out as a beneficiary of that? No, unless the trust instrument provides otherwise. Texas statutes do not provide for the automatic bypassing of your former spouse upon divorce if a living trust is used. Many living trusts address this problem directly, however. You should have an attorney review your trust with this issue in mind. It is best to do so prior to finalizing your divorce, in case something must be included in the divorce decree to fix the trust problem.
Divorce is a life-changing event which needs to be considered and addressed in your estate plan. Contact The Karisch Law Firm, PLLC for more information.