Here is a cautionary tale from New York about the dangers of not properly updating your estate plan after a divorce. Robyn Lewis and her husband executed wills naming each other as the beneficiary of each other's estate in 1996. They later divorced in 2007 and five years later, Robyn died. Since her death her surviving family have been embroiled in a legal battle with Lewis' former in-laws who claim that they are the rightful heirs under Lewis' will. At stake is a home that has been in Lewis' family for generations. Originally, the probate court admitted the 1996 will to probate and affirmed that Lewis' former in-laws were heirs under the terms of the will. That decision was upheld by the Appellate Division and was appealed again to New York's Court of Appeals who finally made a ruling three years after Lewis' death that sends the case back to the trial court for further proceedings. There appears to be some dispute as to whether Lewis, in fact, executed a new will and it just could not be located at the time of her death, but nevertheless, this case highlights the dangers of failing to update your estate plan after a divorce.
When a divorce is over most people are just glad to be through with it and do not really want to dwell on it anymore. Unfortunately, as with a lot of things in life, the work is not over until the paperwork is done. That includes updating your estate plan. If you are like most people you have probably designated your now ex-spouse as your executor, your primary beneficiary of your will, and the beneficiary of your life insurance, investments, and retirement. Your ex may also be designated as your attorney-in-fact under your power of attorney or living will. As a practical matter, the person you just drug through divorce court is probably not the person you want to be making decisions about whether to pull the plug on your life support.
Once the divorce is completed, you need to meet with your estate planning attorney and revoke all previous wills, codicils, powers of attorneys and living wills that designate your ex-spouse in any way. You also should review all of your specific bequests and make sure that your property will be distributed the way you wish it to be distributed. If you have minor children you will need to discuss how to properly provide for them because minors generally cannot inherit directly from an estate so you may need to set up a trust or make other arrangements. You should also designate someone to act as your child's guardian in the event of your death. (Generally, the other parent will assume custody upon the death of one parent, but sometimes the other parent is absentee or otherwise unwilling.)
Next you need to meet with your HR person at your place of employment to change all of your beneficiaries on your pension, retirement plan, and insurance provided through your employer. Finally, you will need to meet with your financial advisor to change all of the beneficiaries on your investments, bank accounts, and private life insurance plans. At some point during your divorce, your attorney probably had you make a list of all of your investment plans and other accounts. Go through that list one at a time and update them.
Thinking about what will happen when you die is never a pleasant experience, but the last thing anyone should want is to leave their loved ones with a nasty lawsuit on their hands. Learn the lesson of Robyn Lewis well and do not repeat her mistakes.
Photo courtesy of Elliott BrownLabels: beneficiary, estate plan, estate planning, post-divorce, will
