How Does Divorce Impact Your Estate Plan?

There are many individuals who have established an estate plan with their spouse, but who are now divorced or going through the divorce process. Such circumstances would naturally raise a number of questions.

• What if my former spouse and I created a trust together?
• What if my spouse is named as a beneficiary on my insurance policy or retirement accounts?
• What if my spouse is my designated agent on powers of attorney?
• What about property that we own together, or that is owned by the trust we created together?

These issues can be addressed by looking to uniform law and statute, as well as meeting with your estate planning attorney.

THE UNIFORM PROBATE CODE  

The Uniform Probate Code (UPC) addresses the issue of divorce in detail. UPC § 2-804 basically revokes any disposition of property to former spouse, or powers of appointment conferred upon former spouse or former spouse’s relatives. Divorce will also revoke any nomination of former spouse in an instrument to serve in any fiduciary capacity or representative capacity (e.g. personal representative, executor, trustee, conservator, agent, or guardian). This means that trusts, wills, and powers of attorney will become void if the former spouse received any designation through the instrument. A divorce also severs the interest of former spouses in property held as joint tenants in common with right of survivorship, transforming the interest into equal tenancies in common. This would apply to any states that have adopted the UPC.

A.R.S. 14-2804

The Arizona law addressing this matter mirrors the UPC, even down to the statute’s section number, and is applied accordingly. Other states that have likewise enacted legislation reflective of the UPC, or that have formally adopted the UPC will also be applied similarly.

UPDATING YOUR ESTATE PLAN

If you do not update your estate plan following a divorce, the law in Arizona and in states that apply the UPC will automatically revoke any assignments to a former spouse, making any alternate designations effective. However, probably the best course of action is to have an updated estate plan that reflects your current circumstances. This will ensure that there is no confusion or difficulty in carrying out your wishes.

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