Updating Estate Documents After Divorce

Updating Estate Documents After Divorce
Categorized: Family Law

Reviewing and updating estate documents after any major life event, including divorce, is important to ensure that the documents reflect your current wishes. A divorce can impact your current estate plan and changes may need to be made and updated documents prepared to protect your interests.

1. Will

Divorce does not invalidate a valid will. However, under Virginia law, if after making the will, the testator is divorced, the divorce revokes any disposition of property made by will to the former spouse, and the former spouse is treated as if he/she predeceased the testator.[1] This means that if you left any property to a former spouse in your will, the inheritance would pass by the former spouse and go to any secondary beneficiaries named. If you failed to name any other beneficiaries, then the assets may become subject to intestacy rules.

Virginia law also revokes any provision in a will naming the former spouse as executor, unless the will expressly provides otherwise. If no alternate executor is named in the will, then an executor will be appointed by the court.

While Virginia law prevents any property from going to a former spouse pursuant to the terms of a will created prior to a divorce, creating a new will after a divorce allows you to completely revoke the old will and determine beneficiaries and appoint an executor based on your new circumstances.

2. Trust

Similar to a will, Virginia law prevents a former spouse from receiving any beneficial interest or property from a revocable trust. If you created a revocable trust prior to your death and you named your former spouse as trustee or a beneficiary, the former spouse would be treated as if he or she predeceased you.[2] Any named successor trustee would be appointed and property would pass to any named successor beneficiaries.

3. Power of Attorney

Like wills and trusts, if a spouse is named as your agent in your power of attorney, the spouse’s authority as agent ends (unless the power of attorney provides otherwise) if a divorce action is filed, if an action for separate maintenance from the other is filed, or if an action for custody or visitation of a child in common is filed.[3] A power of attorney terminates if there is no other agent to act under the power of attorney.  

4. Beneficiary Designations  

After getting a divorce, it is very important to contact your bank, insurance company, administrator of retirement assets, and brokerage firm to request a change of beneficiary if you named your former spouse as a beneficiary on these accounts.

Virginia is one of only roughly half of states to have a revocation-on-divorce statute. Except as otherwise provided under federal or Virginia law, upon the entry of the final decree, any revocable beneficiary designation contained in a then existing written contract owned by one party that provides for the payment of any death benefit to the other party is revoked.[4] Ther term “death benefit” includes any payments under a life insurance contract, annuity, retirement arrangement, compensation agreement, or other contract designating a beneficiary of any right, property, or money in the form of a death benefit.[5] As in the contexts of will and trusts, the former spouse is treated as having predeceased their ex-spouse. Importantly, this statute will not automatically revoke designations for death benefits that are specifically contemplated in a settlement agreement and/or final decree. 

Despite this statute, it is important to keep in mind that your ex-spouse will not be removed as beneficiary from any plan governed by federal law (i.e. ERISA), such as a 401(k) plan or pension plan. Therefore, despite the statute, if you designate a former spouse as beneficiary under a plan governed by federal law, the plan will pay in accordance with your beneficiary designation. Simply updating your beneficiary designations post-divorce will make your intentions clear and avoid possible tax consequences from the property being included in the taxable estate or costly lawsuits regarding the application of the statute to your situation.

5. Other Considerations

Remember that it is important to discuss your estate plan with an experienced Virginia estate planning attorney whenever a significant life event occurs. An attorney can assist you in re-evaluating your estate plan and making sure that your goals are achieved and your interests are protected.  

[1] Va. Code § 64.2-412

[2] Va. Code § 64.2-412

[3] Va. Code § 64.2-1608

[4] Va. Code § 20-111.1

[5] Va. Code  § 20-111.1

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