Divorce Estate Planning

Changing Your Estate Planning When Going Through a Divorce

A divorce can be a stressful event for both spouses and any family involved. As a result, estate planning is usually not at the forefront of someone’s mind when going through a legal separation. But if you’re going through a divorce, it’s very important to check your estate planning documents and modify if necessary. This will save you much headache if something was to happen to you while the divorce is being finalized.

Keep in mind that we’ll be talking about two different distinct periods here — the pending divorce and then the final divorce decree. The need to change your estate planning documents will be different depending on whether your divorce is final or still pending. The first period (called the “pendency” of divorce) is when you or your spouse have filed for divorce. The second period is when the court has granted the divorce.

Here we’ll discuss what you should do with your basic estate planning documents if you’re going through a divorce. These documents would include your durable power of attorney, healthcare power of attorney, living will, last will and testament, and some other financial documents. We’ll discuss each document specifically and how changes to those documents need to be made based on whether your divorce is still pending or finalized.

Durable Power of Attorney

The durable power of attorney is a document that gives someone the authority to conduct your financial affairs if you’re not able to do so. Generally this document is revocable by you. You can tear it up, do a written revocation, or you can tell someone that you are revoking it. If you decide to go with the latter, you have to make sure it is done the right way.

Here’s the question that applies to this document and all the others we’ll discuss in this blog. If you or your spouse files for divorce, does the action of filing for divorce revoke the durable power of attorney document? It does not. A pending divorce doesn’t cancel power granted in the durable power of attorney document.

You don’t want your soon to be ex-spouse in charge of your financial affairs if something happens to you. Most divorces are not friendly, so you don’t want your former spouse taking advantage of the situation and using the durable power of attorney to transfer property away from you.

As such, you’ll want to revoke your power of attorney document during the pendency of divorce. If you’re going to revoke a power of attorney, I suggest doing a formal written revocation that is filed in the public records. You basically file it much like you’d file a deed. This way the whole world can see it.

Healthcare Power of Attorney

The next document of concern is the healthcare power of attorney. In Georgia this document is referred to as the Advanced Directive for Healthcare, but it’s the same thing. This document is used to appoint someone to make healthcare decisions for you if you are incapacitated.

If you’re going through a divorce and it has yet to be finalized, you’ll want to execute a new healthcare power of attorney. You don’t want your soon to be ex-spouse in charge of your healthcare decisions. You’ll want to file a new document naming someone else to be your healthcare decision maker.

As long as you’re legally competent, you can revoke your healthcare power of attorney just like the durable power of attorney mentioned above. You can destroy it, revoke it via a written document, or revoke it orally. The healthcare power of attorney is automatically revoked when the judge signs the final order for the divorce, but you want to make sure you’re protected until that happens. There are many differences between state laws here, so make sure to consult with a local attorney before doing this.

In Florida there’s actually a statute that revokes the durable power of attorney and healthcare power of attorney if a divorce has been filed or if you’re legally separated. But that’s not the law in Georgia. In Georgia you have to perform a written revocation or file new documents. This protects your assets and healthcare decisions during the divorce proceedings. Just make sure to pick someone you trust — a sibling, adult child, etc.

Living Will

The living will is a document that expresses your desires regarding the end of life. For example, this document determines whether you wish to be kept alive by a feeding tube or ventilator. In Georgia the living will is actually part of the healthcare power of attorney — also known as the advance directive for healthcare. In Florida it’s a separate document.

As is the case with the durable power of attorney and healthcare power of attorney documents, the living will is revoked in Florida as soon as the divorce is filed. But that’s not the case in GA. You’ll need a written revocation or a re-execution of a new living will.

Last Will and Testament

This is the basic document that everyone needs as a part of their estate plan. This is where you determine who gets your property when you pass and how they are going to get it. Maybe you have minor children and so everything would be in a trust. Maybe it’s a second marriage and part of it will be in a trust for your wife and the other part in a trust for your children. There are many ways to distribute your assets upon your death and this document outlines how you wish to do that.

As a general rule we have our spouses in charge of everything if we’re no longer here. They would be charge of our will, executors, personal representatives, and you’d provide something for them in the will. You would think that each state would have a law that revokes your will as soon as a divorce is filed, but that’s not the case.

Your soon to be ex-spouse’s interest in your will continues until the judge signs the final divorce decree. The problem arises when you’re in the pendency of divorce. If something happens to you during this time, your soon to be ex-spouse would still get everything you own. And you probably don’t want that to happen. As a result, I highly recommend drafting a new will if you or your spouse has filed for divorce.

Don’t try to do this on your own via a website template. Go to an attorney who knows what they’re doing. Because especially here in Georgia, you have to do this a certain way for it to be correct. There has to be certain language in the will that says why you are no longer providing for your spouse during the pending divorce. Just make sure to get some legal council so you do this properly in accordance with your state law.

The will is revoked upon the court entering their final divorce order. But it’s not totally revoked. Whatever is supposed to go to the former spouse is revoked, but everything else in the will would be administered as is stated in the will.

I had a child client whose father died. The deceased father’s sister (my client’s aunt) went to the attorneys office after her brother died. She got her hands on the will and saw that his ex-spouse’s name was on the will and that the ex-spouse was going to receive his entire estate. She didn’t want that so she destroyed the will.

Now there were a lot of problems with her destroying the will. But the main one was that it created a lot of issues for my client who was a child. We now had to do an administration which is much more costly. The aunt was trying to do what she thought would help her brother’s child, but she actually caused more problems by going rogue and destroying the will.

Revocable or Living Trusts

Revocable or living trusts are documents that we create to avoid probate. These documents provide some competent management if you become incapacitated. It’s a really solid estate planning technique that we use quite frequently at my office. But much like the other documents mentioned above, these are not automatically revoked upon the divorce filing.

The trust automatically terminates only when the court enters its final judgement. During the pendency of the divorce, he or she is still named as a beneficiary of the trust. They could be named as a co-trustee or as a successor trustee of the trust. Therefore I recommend getting your divorce attorney to do an amendment to the revocable trust during the pendency of divorce. This amendment could simply say that you’re not providing for your spouse because of the pending action of divorce.

Hopefully you can see a common theme with all of these estate planning documents. If you’re going through a divorce, you’ll want to tell your attorney to change all these estate planning documents during the pendency of divorce. Once the divorce is finalized, you’ll want to change those documents again. This may seem like a pain to do this twice, but I promise it will be well worth it if something happens to you during the divorce proceedings.

Beneficiary Designations

Now let’s talk about beneficiary designations for IRAs, 401ks, life insurance, annuities, etc. Many times these pieces of the estate planning puzzle are forgotten during a divorce. Many states have enacted laws saying that your former spouse automatically loses his or her designation as a beneficiary, but don’t take a chance here.

If you have life insurance or a retirement account through your employer, make sure you contact the right people and get your beneficiary designations changed. I’ve witnessed this issue many times over the years. Someone forgets to change their beneficiary designations and now their ex-spouse is getting their entire life insurance payout and retirement accounts. Those funds are extremely difficult to recover if they go to your ex-spouse instead of your children or another relative.

Jointly Titled Assets

In Florida you can own a house and we call that tenancy by the entirety, meaning it’s in both you and your spouse’s name. In Georgia when spouses own a property, it’s called “joint with rights of survivorship.” It’s basically the same thing, just two different terms in two different states. You can have joint bank accounts and joint assets as well.

If you’re going through a divorce, you need to look at how all your assets are titled. These would include cars, houses, boats, trailer, campers, etc. Make sure you address this early in the divorce process. Talk to your divorce attorney and real estate attorney to determine the best course of action so that your ex-spouse doesn’t get all your stuff if something happens to you.

Post Divorce

After the divorce is finalized by the court, all of these documents will be revoked. That includes the durable power of attorney, healthcare power of attorney, living will, last will and testament, revocable trusts, etc. The fly in the ointment here are the beneficiary designations. As soon as the divorce action is filed or shortly after, you need to contact your insurance agent, financial advisor, accountant, etc., to change those designations.

Contact Us So We Can Help!

If you’re in Georgia or Florida and need help with estate planning, you can complete this form or give us a call at (229) 226-8183. We’ll ensure that you have all the proper documents that you need in case you prematurely pass away.

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