What is Estate Planning?
Estate planning involves making arrangements for the management and distribution of one’s assets after death, as well as providing for the care of one’s minor children. Common estate planning documents allow you to designate family or friends in positions of trust (also known as a “fiduciary”) to aid you when you are unable to make decisions for yourself or to handle your affairs after you pass away. The positions of trust related to your estate plan include the following:
- In a medical or financial power of attorney, the person you name to make decisions for you if you are unable to is known as an “agent” or “attorney-in-fact.”
- In a last will & testament, the person you name to handle your estate after you die is called an “executor”, “personal representative,” or “administrator”.
- The person you name in your will to take care of your minor children after you die is known as a “guardian” or “conservator”.
- In a trust, the person you name to take over the management of your trust if you are incapacitated or pass away is known as a “trustee”.
Most married people designate their spouse to fill these positions of trust within their estate planning documents.
What is Divorce?
The People You Trust
If you have estate planning documents in place when you file for divorce, you may not want your soon-to-be ex-spouse to be the person to hold those trusted roles due to a breakdown of trust and confidence in your spouse. When you are involved in a divorce, one of the first things you should do is ensure that you have individuals that you trust in those fiduciary positions within your estate plan.
Some states may automatically disqualify your spouse from serving in fiduciary roles in your estate plan when a divorce case is started. In the state of Washington, for example, if you have named your spouse as your agent under a power of attorney, your spouse’s authority to act as your agent automatically terminates upon the filing of a divorce petition. See RCW 11.125.100(2)(c). If you have named a successor or backup agent in your power of attorney, then that individual would step into the primary role as your agent upon disqualification of your spouse. So while you may not necessarily need to update your power of attorney documents upon filing for divorce, you should at least review them to make sure that any individuals you’ve named as successor agents are the people you want to help make your financial and medical decisions for you if you are unable to due to illness or other incapacity.
If you have a last will & testament naming your spouse as your executor, you should prepare a codicil (the legal term for a change made to a will), that names someone else as your executor. Otherwise, if you were to pass away, your soon-to-be ex-spouse may be granted authority over your estate when you die. If you have a trust that names your spouse as a trustee, you will need an amendment to that trust to name someone else as the trustee.
What about the kids?
Can I “disinherit” my soon-to-be ex-spouse?
If you are going through a divorce, you may be considering adding language to your last will and testament that your spouse receives nothing if you pass away. However, many states have laws that limit your ability to “disinherit” your spouse in a last will and testament. In the state of Washington, you are allowed to disinherit a spouse, but only as to your interest in any separate property of yours and your share of the joint or community assets. See RCW 11.12.095. Your spouse may also have the right to claim what is known as a “family support award,” which is a set amount allowed to a surviving spouse and/or children during the probate process. See RCW 11.54.010.
Whether or not you can omit your spouse from your estate plan may also depend on if you have a prenuptial or postnuptial agreement in place. These types of agreements may include language that specifically controls what your spouse may receive from your estate due to divorce or death. You will want to make sure that these agreements are properly considered by your divorce attorney and the court.
What about financial accounts, retirement accounts, and life insurance policies?
What happens after the divorce is finalized?
Once the court issues a final divorce order, you should revisit your estate planning documents as soon as possible to make sure that they reflect your current situation and wishes regarding the people you want to serve as your fiduciaries and to be the beneficiaries of your trust or will when you pass away.
In the state of Washington, upon entry of a final divorce order, any provision in your last will & testament in favor of your ex-spouse is automatically revoked, unless your will says otherwise. See RCW 11.12.051. So if you don’t get around to revising your will, state law may take care of that issue for you.
You will also want to review all of your financial accounts, including bank accounts, investment accounts, retirement accounts, pension plans, and life insurance policies, to make sure that your ex-spouse is no longer named as a beneficiary to that account. Keep in mind that in some cases, there may be language in your final divorce orders that require you to maintain a life insurance policy naming your ex-spouse as beneficiary, particularly when there is some kind of spousal or child support obligation in place.
At the end of the day…
Divorce is a life-changing event that can affect many different aspects of your life. If you are going through a divorce, it is a good idea to talk to a knowledgeable family law or estate planning attorney in your state to discuss how the divorce may affect your estate plan. If you don’t have an estate plan in place, you should also seek advice about what may be best for you and your family once the divorce is finalized. If you live in Oregon or Washington, the attorneys at Navigate Law Group have the knowledge and experience to help you through the divorce process and ensure that your estate plan reflects the changes in your life once the divorce is finalized.
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Every legal issue is very unique. Accordingly, the information in this blog is intended as general education material and not as legal advice. If you think you may have a legal issue, you should consult an attorney.