During or After Your Divorce, It’s Time to Update Your Estate Plan
By Jennifer L. Fulton, Esquire
If you are going through a divorce, consider your estate plan. Most people want someone other than the spouse they are divorcing to make their health care decisions for them. You may also want to change the fiduciaries named in your documents and change the beneficiaries. The rules are different if your divorce is still pending versus if you have a final judgment. Here’s how your estate planning documents naming your spouse are treated in Florida during and after a divorce:
A Designation of Health Care Surrogate names another person (or persons) who can make health care decisions for you if you are not capable of doing so. These decisions include the end-of-life decisions you would state in your Living Will. In Florida, during the divorce, there is NO statutory provision to remove your spouse, but there is upon final judgment.
If you have a HIPAA authorization and waiver naming your spouse, you could create a new one that did not include your spouse. It allows the people named therein to ask questions of the medical staff at your hospital and receive answers.
A Durable General Power of Attorney will allow your named agent to act on your behalf to transact the business of your life. This document is valid immediately in Florida. Upon the filing of an action for dissolution in Florida, the spouse is statutorily removed as your agent.
A Declaration of Pre-Need Guardian allows you to pick, while you are competent, the person you would want the court to use as your guardian if a guardianship was ever needed. Preference is given to someone related by blood or marriage, and an ex-spouse could petition for the job. Filing a declaration of pre-need guardian when you separate lets the judge know your preference while you still have capacity.
Your Last Will and Testament may need some changes. Most people want to change their named personal representative when a divorce is filed. In addition, you can change your asset distribution. However, unless there is a valid nuptial agreement stating otherwise, a spouse is entitled to elect against the will, even after filing for divorce, to take a total of 30% of the “augmented” estate, which is most of your assets. After the divorce is final, an ex-spouse does not benefit from the will.
If you are divorcing without a will, and die before the divorce is final, the spouse will receive 100% of your probate assets, unless you have a minor child, and then the spouse will receive half.
A Revocable Living Trust is treated much like a will. If you are the grantor, you will want to remove your spouse as successor trustee, and change the dispositive provisions that would typically give 100% to the spouse upon your death. As with the will, the spouse could still claim an elective share, of 30% of the augmented estate.
If your divorce is pending, you should change the beneficiary designations and PODs on your accounts. Post-divorce, most beneficiary designations are covered by a Florida statute removing the ex-spouse. An exception is ERISA-qualified employee benefit plans, such as 401(k) plans. If your employer’s retirement plan is ERISA-qualified, and the spouse is the beneficiary, upon dissolution, you must sign a new beneficiary designation; the ex-spouse will NOT be automatically removed as beneficiary.
After divorce, joint accounts with survivorship features that are awarded to a spouse in the divorce, but not retitled prior to the death of the account owner, maintain their survivorship features. Check with your family law attorney before retitling these if the divorce is not final, they are probably marital assets.
Irrevocable Trusts. As their name implies, an irrevocable trust cannot be changed after it is in place. The most common irrevocable trusts are Irrevocable Life Insurance Trusts, or ILITs. Sometimes this problem can be solved after divorce (provided it is not in opposition to the final judgment) by allowing the policy to lapse. However, this is not always a perfect solution, as it may no longer be possible for the insured to obtain a new policy under similar terms. Sometimes an irrevocable trust can be changed, if a material purpose of the trust no longer exists.
If you are getting or have just gotten a divorce, your estate plan is outdated and should be reviewed. The Law Offices of Robin Bresky remain open even during the coronavirus pandemic, to provide these essential services, and can help you with your estate planning needs while practicing safe social distancing. Consultations can be done remotely, and, as of this writing, appointments for signing and witnessing the documents can be done through the window of your car. Updating your estate plan during a divorce protects you and your family, and should not be overlooked.
Jennifer L. Fulton, Esq. is an attorney, of counsel, at The Law Offices of Robin Bresky (www.breskylegal.com) focusing on Estate Planning, Probate, and Estate and Trust Administration. A member of the Florida Bar since 1996 with a Juris Doctor degree from Nova Southeastern University, Fulton works with clients to plan for the milestones of life (college, “adulting”, marriage, children, grandchildren, aging parents, pre- and post-divorce, loss of a spouse, aging, diminished mental capacity) and administration upon death. She can be reached at 561-994-6273 or EstatePlanning@BreskyLegal.com. If you have an estate planning topic you would like to hear more about, please drop her a line, and perhaps it will spark a future article!
This information is provided for general educational purposes and may not apply to your specific situation. Please consult with an attorney before relying on this information.