My father and grandfather were a study in contrasts. Harry, my dad’s dad, regularly drew the ire of my grandmother for a variety of transgressions mostly centered around his forgetfulness and his falling asleep on the subway. Although the language was not foul, the announcements of displeasure knifed through every listener.
Harry would remain silent, but bright-eyed with a facial expression that said, “Wow, can you believe how angry she is getting?” I asked my father if he ever remembered my grandfather fighting back. After a couple of beats, my dad mentioned that there was this one time in 1958… Meanwhile, my dad fought fire with fire in most arguments.
Can you guess which Feller stayed married longer?
You enter marriage with some paperwork and a party. You end a marriage with a lot of paperwork and no party (usually). Estate planning would seem to be an afterthought in the aftermath of a divorce. It is not.
Without a spouse to anchor an estate plan, the executors, trustees, guardians, agents under a Power of Attorney, and Health Care Proxies will have to be selected from a more diverse pool of people that are connected to you. Beneficiary forms tied to IRAs, 401Ks, 403Bs and life insurance must be updated to reflect the dissolution of the marriage.
Separation agreements usually include estate provisions, which may call for the removal of both spouses from each other’s estate planning documents and retirement accounts. In New York, bequests to an ex-spouse in a Will prepared during the marriage are voided following the divorce. The Will is not invalidated, but the architecture behind the Will is no longer solid. A new Will has the benefit of realigning your estate assets and matching them with the right people.
Trusts made during the marriage are governed differently. Revocable Trusts can be revoked and the assets held by those trusts can be part of the divorce. Irrevocable Trusts involving marital property are less likely to be broken up. In fact, following the death of the grantor, distributions may be made to an ex-spouse as directed by the Irrevocable Trust.
Changing beneficiaries is an important first step following a divorce. Request change of beneficiary forms for all retirement accounts (IRAs, 401Ks, 403Bs) and life insurance policies, because, without a stipulation in the divorce decree terminating their interest, an ex-spouse still listed as beneficiary of an IRA or life insurance policy could lead to problems upon your death.
Divorce fundamentally changes relationships between children and parents in an estate planning context. Without a spouse, reliance on adult children for decision-making roles becomes more pronounced. Adult children in their 20s or early 30s take the place of the ex-spouse as fiduciaries and Health Care Proxies. This includes agents under Powers of Attorney, executors and trustees.
For divorcing parents with minor children, selecting guardians under a Will to care for the children should both parents pass away may involve more delicate negotiations between the parties to achieve a consensus.
Talk to the professionals at The Feller Group, P.C., for more information on post-divorce planning.
Alan D. Feller, Esq., is managing partner of The Feller Group, located at 625 Route 6, Mahopac. He can be reached at alandfeller@thefellergroup.com.