If you are going through a divorce, it is absolutely necessary to review your estate plan.
Here are some things to consider when you are considering divorce or separation, and after your divorce is final:
Prior to Finalizing Your Divorce
1) If you do not have an estate plan:
If a person dies without having their estate planning in order, Pennsylvania’s law of intestate succession will govern who inherits from your estate.
If you are currently separated or in the process of getting a divorce and you do not have an estate plan, your wishes are in the most danger of not being honored. Pennsylvania law states that those who are married (and, with a few exceptions, a person will be considered married until a divorce is final), the surviving spouse will receive all or a portion of the decedent’s estate. This not only means that your ex will unfairly inherit but if you have children, that less money will be going to them.
2) If you haven't updated your estate plan:
If you die prior to the divorce being finalized and you have not updated your estate plan, then the provisions in your existing estate plan, which likely include the not quite ex-spouse, will govern and the ex-spouse will inherit under whatever provisions were put in place while you were once happily married.
3) If you updated your estate plan:
If your divorce hasn't been finalized but you updated your estate plan to exclude the not quite ex-spouse, the surviving spouse may still receive money from your estate. That is because Pennsylvania allows your ex to claim their "spousal share." This right of the election could give your ex one-third of your estate.
After Your Divorce Is Finalized
1) If you haven't updated your estate plan:
If you die after your divorce is finalized but you haven't updated your estate plan, then the ex-spouse and all of your former in-laws will be treated as though they pre-deceased you. This means that, if you still want your ex-spouse to be a trustee for your minor or disabled children, there is no law to ensure this happens. If this is not what you want, then you sign new estate planning documents after the divorce is finalized, naming the ex-spouse as such.
2) Change those beneficiary designations:
Certain retirement plans require their beneficiary designations to be updated to remove an ex-spouse as the beneficiary, otherwise, the ex-spouse would still inherit the plan after the divorce.
Beneficiary designations on any life insurance or other “contract”-type property should also be updated after the divorce is finalized, to ensure that the agreement governing the asset doesn’t result in the ex-spouse remaining the beneficiary of the asset at the decedent’s death.
These are just some of the estate planning issues that should be considered when going through a divorce. These issues also don’t take into account any provisions of a premarital or post-marital agreement in which a spouse may have waived their statutory rights to inheritance, or any provisions of the divorce settlement agreement.
In order to determine if you should consider these issues during and after a divorce, you should consult with your own estate planning attorney, who will be aware of facts specific to your circumstances.
Located in Merion Station, PA, Sallen Law assists clients with estate planning matters throughout the Philadelphia-Main Line area including but not limited to Lower Merion Township, Montgomery County, Bucks County, Delaware County, and Chester County. Attorney Sallen is also licensed to practice in the state of NJ and serves Burlington County, Gloucester County, Camden County.