Estate Planning Attorney Serving Greensboro
May I Change Beneficiary Designations on Financial Assets During Separation or Divorce?
You may change most of your beneficiaries when you separate. However, some of those changes may need to be revised as part of the divorce settlement or revised if death occurs before the divorce to preserve a spousal share. You may not change the beneficiaries on ERISA retirement accounts, like your 401k or 403b unless your soon-to-be-ex-spouse agrees to formally waive such rights by signing the required waiver on the appropriate beneficiary designation forms. After your divorce becomes final, you may change your beneficiaries provided such changes comply with your divorce order.
May I Change My Estate Planning Documents When I Become Separated?
You may change most of your documents without permission from your spouse. There are exceptions for irrevocable trusts, and for some joint revocable trusts which don’t have provisions allowing either spouse to revoke the trust.
You don’t have to name your spouse as your agent to handle financial or medical decisions, and you don’t have to leave your spouse your entire estate. However, your spouse is entitled to inherit part of your estate, unless you have a legally binding pre-nuptial or post-nuptial agreement, you have a binding legal separation agreement or, you’re officially divorced.
Even if you remove your spouse from your estate planning documents, you may not disinherit your spouse or soon to be ex-spouse unless you receive your spouse’s formal consent on a separation agreement or until you’re formally divorced. Until either of those things happen, you have a legal obligation to take care of your spouse’s necessary health needs and support, and to leave your spouse a state law defined portion of your assets, even if everything you own is in your name, you didn’t leave them anything in your estate plan, and you didn’t name them as a beneficiary on any of your accounts.
May I Remove My Spouse’s Name on a Deed Where We’re Both Named During Separation?
You will need signatures from both spouses to change the ownership of real estate which lists both spouses on the deed. Moreover, removing a spouse doesn’t remove loan obligations.
May I Purchase Property During Separation Without My Spouse’s Signature?
It’s not a good idea to purchase property in your name until you have a signed separation agreement that addresses such a purchase or until you’re officially divorced. Married individuals have property interests in real estate until a divorce, or a separation agreement absolves them of such interests.
What Happens if I Die After Divorce, but Before Removing My Ex-Spouse as the Beneficiary of My Will, Accounts, Life Insurance, IRAs and Other Contractual Obligations?
In N.C., if you die after you’re divorced, but before you remove your spouse’s name from your contractually driven accounts, such as your IRA, 401K, Investment Accounts or Life Insurance, these assets will go to your ex-spouse.
What Happens to My Will, Health Care Power of Attorney and Property Power of Attorney if I Fail to Remove My Ex-Spouse as my Executor or Agent if I Get Sick or Die?
After your divorce, your ex-spouse won’t be allowed to serve as your executor and won’t inherit under your will. Your ex-spouse also won’t be allowed to serve as your health care agent or your property power of attorney if you become incapacitated. The next person listed will serve in your spouse’s place.
What if I Want My Ex-Spouse to Serve as My Executor or Agent on My Will, Health Care Power of Attorney and Property Power of Attorney?
There is a legal presumption that you wouldn’t want your ex-spouse to serve, but if this is what you want, and if your ex-spouse agrees to serve, your documents should reflect that you are divorced and that you want your ex-spouse to serve in this capacity.
What’s the Best Advice You Can Give Me About Changing My Beneficiaries or My Estate Plan If I’m Separated or Divorced?
My recommendation is to speak to your divorce attorney and estate planning attorney about the best practices for your situation before modifying any beneficiaries or Plans.