If you are considering separation or divorce (or even marriage), you should also consider setting up or changing your will and other estate planning documents and beneficiary designations to reflect your new status.
Spouses commonly create wills where each spouse’s property is left to the other spouse. Entry of the final divorce judgment revokes all rights to a former spouse’s property allocated through a will. In addition, other statutory inheritance and property rights terminate upon divorce. However, no marital rights to inherit property from a spouse are revoked by the act of separating. Even if you’ve been separated for years and live completely separate lives, your spouse may still inherit property from you if you die before the divorce is granted, unless you change your estate planning documents.
Rights to property or inheritance can be waived in a premarital agreement signed before marriage, in a post-marital agreement created while spouses are married and living together, or in a separation and property settlement agreement executed when the couple separates. It is important to talk to a family law attorney about your inheritance and property rights prior to marriage and if you are considering a separation so that you understand all of your rights.
There are certain rights that belong to people just because they get married. For example, certain employer sponsored retirement plans designate the employee’s spouse as the beneficiary unless that spouse signs a waiver. In contrast to inheritance rights that are revoked upon divorce, beneficiary designations on life insurance policies, 401K plans, payable on death (POD) accounts and other similar assets are not automatically changed by entry of a divorce judgment or the signing of a premarital agreement or separation agreement. A person must actually change the beneficiary designations with the account provider to prevent a spouse or ex-spouse from receiving such benefits.
You should talk to your divorce attorney or an estate planning attorney about how your divorce or separation may affect your will, power of attorney, life insurance, 401K, and other property rights. Be sure to take the steps necessary to ensure that the property you own at the time of your death winds up in the hands of the loved ones you want to enjoy the property accumulated during your life.
Susan K. Hill is an attorney at Block, Crouch, Keeter, Behm & Sayed, LLP and practices in the areas of estate planning, business and tax law, and real estate transactions. This article is intended to offer general information and not specific legal advice. If you would like a consultation regarding your estate planning issues, please call (910) 763-2727 to make an appointment.