Divorce can wreak havoc on an estate plan. Upon marriage in Massachusetts, a previous will is void unless it was "made in contemplation of marriage." Once divorced, provisions in a will that mention an ex-spouse are void. Unfortunately, the legal consequences of a divorce on an estate plan don't end there.
Massachusetts laws govern what happens to a will or trust upon divorce. A will, as mentioned, is significantly altered automatically - although not necessarily in the way the divorced person desires. A trust may not necessarily change at all. An irrevocable trust made for the benefit of a child will not - in fact cannot - change. The type of trust established and its intention will affect whether it needs to be revoked and rewritten or can be amended to reflect the grantor's current wishes. Trusts are a complicated legal device and individual circumstances greatly shape the best course of action after a divorce.
In addition to wills and trusts, a soon-to-be ex spouse may be named as a health care proxy or durable power of attorney in the event of incapacitation. IRAs and other retirement accounts also may list the ex as a beneficiary. All of these must be revisited as part of the divorce process.
Massachusetts prohibits changing life insurance beneficiaries or retirement plans while divorcing - these will be negotiated in the divorce. For example, as part of the divorce agreement one spouse may agree to keep an ex as the life insurance beneficiary in exchange for some other asset, or in exchange for agreeing to be removed from the other's estate plan.
Once the divorce is final an ex-spouse can make any changes he or she wishes regarding beneficiaries of life insurance policies, bank accounts and retirement benefits, so long as that change is in accordance with the divorce settlement and state law.
Massachusetts law terminates the interest of an ex-spouse in beneficiary designations for life insurance policies after a divorce is final - but retirement plans governed by ERISA, IRAs and retirement accounts do not automatically void an interest by an ex-spouse. In any case, it makes sense to ensure that these accounts reflect the wishes of the divorced person.
Get experienced help
Updating an estate plan after a divorce requires experienced help. While divorce is difficult enough and contemplating what happens to assets upon death is disconcerting, revising an estate plan after a divorce is an essential part of the process. Massachusetts residents contemplating divorce or in the divorce process should contact an experienced family law attorney to discuss first steps.