New York Divorce Lawyer & Attorney : Clement Law Firm : Family Law Serving Manhattan, Westchester County, Brooklyn, Queens, Bronx, New York City

It is always a good idea after a divorce to update your will or to change the beneficiary designations on your insurance policies and investment accounts. Prior to the divorce it was likely that your wife was your heir or beneficiary. After your divorce, you may not want your ex to benefit from your death.

Problems arise when someone dies and their pre-divorce will or beneficiary designation has not been changed and their spouse is the beneficiary. .

While a disposition in a will to a former spouse would be  revoked by a divorce or an annulment, until recently a divorce did not revoke many other revocable dispositions which are essentially like wills (so-called "testamentary substitutes"), such as lifetime revocable trusts (including Totem Trusts), life insurance policies, or joint tenancies (including joint bank accounts). 

A new law was enacted to end this inconsistency. Now, according to the law’s legislative memorandum:

.  .  .  a divorce or annulment would revoke any revocable disposition or appointment of property to a former Spouse, including a disposition or appointment by will, by beneficiary designation, or by revocable trust (including a bank account in trust form). It also would revoke any revocable provision conferring a power of appointment on the former spouse and any revocable nomination of the former Spouse to serve in a fiduciary or representative capacity, such as nomination of the former Spouse as a personal representative, executor, trustee, guardian, agent, or attorney-in-fact. Finally, a divorce would sever joint tenancies between former Spouses (including joint bank accounts) and transform them into tenancies in common.

The law is applied so as to treat the surviving former spouse as if she/she predeceased the decedent.

So, how to avoid the application of this law? It is simple. Update your will and beneficiary designations after the divorce is granted. Get your ex-spouse out of your will.  If you really want to benefit your former spouse, spell out your desire in your updated will.

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Phil Bernstein, in his New York Probate Litigation Blog, highlights several issues about the impact on divorce on an estate plan. In his post, Phil reminds us of the importance of finalizing the divorce settlement as soon as practicable.

Most settlement agreements contain provisions wherein each spouse waives their respective rights of election and any interest in the other’s estate. If you should die before an agreement containing these waivers is signed or before the court enters a judgment of divorce, your estranged spouse can (and probably will) exercise the right of election and inherit from you.

I had at least one case wherein a wife prolonged the divorce because her husband was ill and she was gambling that her husband would pass away before the divorce was granted and her right of election was extinguished.

The only way to ensure that your estate goes to your intended beneficiaries and not your estranged spouse is to make sure that the divorce settlement agreement is promptly signed.

Mr. Bernstein aptly suggests that you check all of the beneficiary designations of your insurance and retirement plans. If your former spouse is named as a beneficiary, he/she will be paid when you die

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