When you’re going through a divorce, estate planning is probably the last thing on your mind. After all, you’re dealing with the immediate concerns. Who will get the house? Who will get custody of the children? How will you be able to afford this?
Who has time to think about an estate plan?
But here’s the truth: your estate plan can be a crucial concern when you’re ending a legal marriage contract. Without updating your estate planning documents, your ex-spouse may still have legal authority over some of your affairs and even inherit your assets.
At Melone Hatley, P.C., our experienced Reston, Virginia estate planning attorneys help clients protect not just what they have today, but everything they’re building for their future. We work with clients in Reston and throughout Northern Virginia to ensure their estate plans reflect their post-divorce lives. Let’s look at the risks of not considering your estate plan during your divorce.
Virginia Divorce Law and Estate Planning: How They Intersect
In Virginia, certain aspects of your estate plan may be automatically affected once your divorce is finalized. For example, Virginia Code § 64.2-412 revokes certain provisions in your will that leave assets to your ex-spouse and name them as executor. But this law only goes into effect after your divorce is officially complete, not while you are separated or going through the process.
That means if something were to happen to you during your separation or divorce, your soon-to-be ex might still have legal authority over your estate and financial matters, your healthcare decisions, and your children’s financial future.
Even after divorce, failing to formally update your estate plan can leave behind a trail of legal confusion, unintended beneficiaries, and unnecessary stress for your family. If you are in the midst of or considering a divorce, you’ll want to consider the following action items.
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1. Draft a New Will That Reflects Your Post-Divorce Wishes
Most married couples name each other in their wills. In Virginia, a divorce revokes spousal provisions in a will, but that doesn’t protect you during the process or mean the rest of the document is still right for you. Your old will is valid until the divorce becomes final. Furthermore, it may still name outdated beneficiaries, omit new family members, or lack a clearly designated guardian for your children.
If you’re considering a divorce, you should start fresh by revoking your old will and creating a new one that better aligns with your current situation and future goals. During the process, you can name a new executor – someone you trust now – and specify how your property should be divided among your children, loved ones, or charitable causes. If you have minor children, you will also want to name a guardian for them, ensuring the court considers your wishes should something happen to you.
2. Update Powers of Attorney and Beneficiary Designations
Powers of attorney are powerful tools, provided you’ve named trusted individuals as your agents. If you designated your ex-spouse as your agent, they could still access your accounts, transfer property, or make major financial decisions on your behalf. Furthermore, if they hold your healthcare power of attorney, they could make critical medical decisions for you if you become incapacitated. Virginia does not automatically revoke these powers upon divorce. This means your soon-to-be or ex-spouse still holds these powers. You must revoke them in writing and replace them with updated versions.
Additionally, you will want to consider any beneficiary designations you’ve made. Assets such as life insurance proceeds, retirement benefits, and bank account funds go directly to the named beneficiary on each account. If your soon-to-be or ex-spouse is still listed as a beneficiary on these accounts, they may still receive these assets, even after your divorce is finalized. You will want to submit new designation forms to your banks, insurers, and plan administrators so your former spouse no longer has access, and your updated wishes are carried out.
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3. Create a Trust to Protect Your Children’s Financial Future
When you’re a parent, your estate plan isn’t just about you – it’s about securing your children’s future. If you pass away while your children are still minors, any assets you leave them will be placed in a court-controlled guardianship account until they turn 18. And guess who is likely to control that money? Your ex-spouse.
If that’s not the arrangement you want, a revocable trust is a solution. With a trust, you can appoint someone you trust as trustee to manage the funds on behalf of your children. You also get to control how and when your children receive their inheritance. For example, you may decide they’ll receive distributions at certain ages as they gain financial maturity instead of getting the bulk of the funds at 18.
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4. Update Other Existing Trusts
If you created a revocable living trust during your marriage, you likely named your spouse as a successor trustee, primary beneficiary, or co-trustee if it was a joint trust. After a divorce in Virginia, none of these roles automatically change unless the trust document includes a clause that removes your spouse upon divorce, which most don’t.
You will want to remove your soon-to-be or ex-spouse as a successor trustee or beneficiary. Instead, you will want to appoint a new trustee to responsibly manage the assets in the trust. At this time, you can also update the distribution terms to reflect your new wishes and remove your ex’s access to funds. If the trust was jointly funded, you may need to terminate it and create a new individual trust to avoid future complications or co-ownership issues.
You may also have created additional trusts with your ex during your marriage. Take this time to speak with your estate planning attorney to revoke or update these documents to ensure your former spouse no longer benefits from them.
5. Considering Blended Families After Divorce
After your divorce, remarriage may be in your future. But that can also bring its own legal challenges. If you’re considering a remarriage after your divorce, or have already remarried, your estate plan should address your now-blended family. Without proactive updates, your children from your prior marriage could unintentionally be left with less inheritance, or your new spouse could be left vulnerable because of outdated or incomplete documents.
It’s important to understand that in Virginia, your new spouse has legal rights to a portion of your estate, even if your will says otherwise. Under Virginia’s elective share statute, a surviving spouse may claim up to a third of your estate, regardless of your will’s instructions. This means that even if you intend to leave your estate to your children from a previous marriage, your new spouse can still claim a significant portion unless you take steps to prevent it.
Are You Ready to Update Your Estate Plan?
Divorce is a turning point, and your estate plan should reflect the new chapter you’re beginning. Unfortunately, if you do nothing, you could leave your future at risk. Your ex could still be named on accounts. Your will could be partially invalid and outdated. Your children’s financial future could land in the hands of someone you no longer trust. These are the kinds of issues that end up in court battles and create added stress for families during already emotional times.
Let us help. At Melone Hatley, P.C., our experienced Reston estate planning attorneys are here to help protect what matters most – your family and your future. Let us review your estate plan and help you put protections in place. Schedule a free consultation with one of our Client Services Coordinators online or call us at (703) 995-9900.
Schedule a call with one of our client services coordinators today.
