After Your Alabama Divorce, Divide Your Estate Plans Too

Posted by Steven D. Eversole | Feb 27, 2015 | 0 Comments

After matters of child support, child custody, spousal support and division of marital property and debt have been settled, it's understandable newly-divorced couples just want to put it all behind them. However, they may be in for an unpleasant surprise if they don't attend to estate matters immediately following the divorce.

While the divorce order itself can end or establish certain payments or obligations, estate planning could be an important next step. Failure to do this could potentially result in certain benefits or assets being funneled unintentionally to your ex-spouse or even his or her family if you die.


Take for example a recent case out of New York, wherein the family of a woman who died five years ago at the age of 43 is locked in a nasty battle for her $200,000 home with her former in-laws. Although she and her husband divorced three years before her death – and the home was clearly hers to keep in the divorce settlement – an existing will is central to the dispute.

A will executed ten years before her death named her then-husband as the beneficiary of her property should she die. That property included a home that had been passed down in her family for generations. The divorce proceeding cut her husband automatically out of the will (though such documents should be updated anyway just for clarity's sake). However, her father-in-law, who was named as a secondary beneficiary, asserts that under the terms of that will, he is the beneficiary of the home.

The decedent's family insists she drew up a new will after separating from her husband, but thus far, no one has been able to locate or produce that newer documented. An appellate court ruled the will should be upheld, but one last appeal is slated to go before the state's highest court next month.

Drafting a new will isn't the only thing to consider. New divorcees should also update all proxies, if they haven't already. Updating one's health-care proxies and health care powers of attorney can be done even while the divorce is pending – and in fact should be done, unless you want your soon-to-be ex making important financial and health care decisions for you in the event you are unable to do so.

Another important update to make is that of beneficiary designations. Usually, retirement, brokerage, insurance and bank accounts are divvied up in a divorce. However, if the named beneficiary isn't updated, it's possible the ex could still collect. Take for example the 2013 U.S. Supreme Court case in which justices sided with an ex-wife who collected $125,000 on a life insurance policy after he died. They had been divorced for years at the time, and he had actually remarried. However, he failed to update the policy beneficiary after the divorce, so the beneficiary as listed was honored.

It's important to make sure your divorce attorney is aware of all such accounts. Note too that if a divorce settlement grants a portion of an ex-spouse's retirement account, claimant may additionally need to request a Qualified Domestic Relations Order to ensure the divorce settlement terms are upheld.

Additional Resources:

After Divorce, Separate Your Estate Plans Too, Feb. 20, 2015, By Liz Moyer, The Wall Street Journal

About the Author

Steven D. Eversole

J.D., Samford University's Cumberland School of Law, Birmingham, Alabama B.A., University of Alabama, Tuscaloosa, Alabama


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