Most people never expect to get divorced. They love their spouse and anticipate spending the rest of their lives in marital bliss. Unfortunately, the data indicates this is not the norm. In fact, in the United States, nearly half of all married couples wind up getting divorced, according to the American Psychological Association.
This is why it is important to be prepared and have as much information at your disposal. Below is a general overview of how a divorce can impact your estate plan.
How Divorce Can Impact Your Will
When you get divorced, any items or funds that are directed to your ex-spouse will be automatically revoked, according to Virginia Code § 64.2-412(A). This statutory provision means your ex-spouse will lose the following rights, responsibilities, and benefits described in your Will:
· General or special power of appointment;
· Executor status
· Guardian status
· Any assets designated to go to the ex-spouse
Despite the automatic revocation, it makes more sense to take the time to update your Will to ensure there is no possibility your ex-spouse could make a legal argument in favor of receiving any assets from your Will. Also, the period of time between separation and final divorce decree or settlement agreement could last from a few months to a few years. During this period, the disposition of your assets should be clear if something happens to you.
How Divorce Can Impact Your Trust
You need to take action if you get divorced and have a trust. Why? Because the Uniform Trust Code does not automatically revoke the beneficiary status of an ex-spouse upon divorce. Therefore, if you do nothing and your ex-spouse remains listed as the primary beneficiary of your trust, they will still receive those funds when you pass on.
How Divorce Can Affect an Advance Medical Directive
When your divorce is finalized, you may believe this automatically revokes all rights and responsibilities from your now-ex-spouse. This is not correct. In fact, under the Virginia Health Care Decisions Act, an advance medical directive is not automatically revoked as a result of a divorce. Therefore, you need to be proactive and expressly revoke the existing advance medical directive naming your ex-spouse as your health care agent.
How Divorce Can Affect Designations of Beneficiaries in Your Estate Plan
Fortunately, automatic revocation exists when it comes to beneficiary designations. According to Va. Code § 20-111.1(A), a revocable beneficiary designation providing for the payment of a death benefit to your ex-spouse is revoked. This includes any life insurance policies, retirement accounts, or any other contracts providing for the payment of benefits to a spouse upon your passing.
However, if you are a federal employee, or your life insurance plan is governed by federal law, your ex-spouse will receive the life insurance proceeds, if they remain listed as the designated beneficiary.
Have Questions? Contact an Experienced Trust and Estate Planning Attorney in Ashburn
Divorce can significantly impact an array of provisions within your estate plan. As a result, if you are in the midst of a divorce, or just had your divorce finalized, take the time to sit down with an experienced Ashburn trust and estate planning attorney to take the necessary steps to update your estate plan.