Occasionally people will tell me something like, “I’ve had my will done since my first marriage.” That always gives me concern, because if what they meant is that they and their first spouse did estate planning documents and then they divorced, the terms of those documents have been radically changed by that divorce.
Durable Power of Attorney – An agent who is the spouse of the principal loses their authority to act as agent upon the dissolution of the marriage by court decree of divorce or annulment or some other court decree declaring the marriage void. To prevent this result a provision providing otherwise must be included in the Durable Power of Attorney.
Life Insurance Policy – Designation of a spouse as beneficiary is ineffective if the marriage is later dissolved by divorce or annulment. To prevent this result the divorce or annulment decree can designate the former spouse as beneficiary or the insured can redesignate the former spouse as beneficiary after the decree. This provision also does not apply if the former spouse is designated to receive the proceeds in trust for a child or dependent of either former spouse.
Multi-party Accounts – Dissolution by divorce, annulment or a voiding declaration of a court will nullify the provision in favor of the former spouse or any of the former spouse’s relatives who are not also relatives of the decedent. Similar provisions to those set out above allow for this result to be overcome.
Wills – Dissolution by divorce, annulment or a voiding declaration of a court will result in the Will being read as if the former spouse and each relative of the former spouse who is not a relative of the testator had failed to survive the testator. To prevent this result requires a court order or an express provision in a contract relating to the division of the marital estate entered into between the testator and the former spouse.
Revocable Trusts – Similar provisions apply to nullify provisions in revocable trusts in favor of a former spouse and the former spouse’s relatives who are not relatives of the divorced individual. The same non-applicability provisions for Wills apply to revocable trusts. In addition, an express term in a trust executed by the divorced individual can overcome this provision.
There are additional details and nuances in Texas law regarding these laws. So as soon as your divorce decree is final, and assuming that decree does not prohibit such changes, you should immediately update your estate planning documents and beneficiary designations. You should also advise any banks, life insurance companies and investment companies with whom you have accounts of the divorce decree and its pertinent provisions. A meeting with your estate planning attorney should be scheduled as soon as possible