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Divorce and Estate Planning

I’ve heard it said that no one sets out to get divorced, and while there are probably countless reasons why couples decide to call it quits, one thing is universal: Divorce is one of the most difficult events a person can go through. As the termination of one’s most significant relationship, divorce impacts nearly every aspect of person’s life. Almost always, divorce has far-reaching implications on one’s financial security. With that in mind, today’s blog will explore how divorce can affect your estate plan.


1. Revoking Your Will

In most states, the law revokes any spousal provision after a divorce, but it is important to change your will anyway. To clarify what this means, let’s use an example. Bob and Sally, a married couple create wills at the same time. They both name Sally’s sister, Susan, as Executor of their respective estates. Later, Bob and Sally divorce. Bob dies soon after. Upon Bob’s death, Susan, the named executor in the will is disqualified from serving in that role. This is because Texas law states that upon divorce a person named in the will that is related by blood to the divorcing spouse, but not to the person who made the will is treated as having predeceased for purposes of the will. This would be true even if Bob and Sally’s divorce was amicable and Bob and Susan remained friends. In a recent case of mine, about a year after the divorce, the husband passed away. His wife’s brother had been named in his will as Trustee for money that was to go to his children. This brother-in-law was still known by all of the family as the best person to handle that role. Unfortunately, the family had to spend extra money and go to court for an order to allow the named person to serve in that role. It took several extra months for the beneficiaries to have access to the money. Had there been a new will naming the ex-brother-in-law, the extra expense would have been avoided.


2. Power of Attorney

If you spouse has power of attorney, he or she can make financial decisions on your behalf until a divorce is complete. This can be an especially dangerous situation in acrimonious splits. It is important to note that the powers of attorney will become void after a divorce is finalized, but in the meantime, the spouse still may have rights to deal with finances and even make medical decisions on your behalf. If you are going through a divorce, it is a good idea to put your wishes in writing, such as completing a new medical power of attorney for medical decisions and a new durable power of attorney for financial decisions.


3. Guardianship

A pending divorce may have implications on your guardianship decisions. Most of our clients fill out a declaration of guardian which is a form that designates who should become their guardian in the event that they become incapacitated in the future. In the absence of this form, the spouse has priority to serve in the role, even if the spouses were separated. By completing this form, you are able to not only appoint someone else in that role, but you can expressly disqualify the person you are divorcing from being able to serve in that role.


4. Trustee For Your Kids

At your death, you may leave an inheritance to your children. Are you comfortable with your ex-spouse controlling those funds? How about your ex-spouse’s new wife? If the answer to either of those questions is, “NO WAY”, then you need to make sure that you put a will in place that dictates who should be in charge of managing the funds for your children until they reach a certain age. In the absence of a trust, the court will appoint a guardian. The child’s parent would have priority to serve in that role. Therefore, that person that you no longer trusted enough to stay married to is in charge of managing everything you worked hard for. A well thought out Estate Plan can provide peace of mind as you know who will take care of the money for your children.


In summary, estate plans are not just important for happy married couples who are planning for what happens when one of them passes away. They can be even more important for people who are going through a struggle such as divorce. While an estate plan can’t help you pick a better mate, it can help your family recover when things go south.

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