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What Happens to Your Estate Plan When You Divorce?


What Happens to Your Estate Plan When You Divorce?

By Michael Giusto and Lois Brenner

Getting a divorce is a stressful experience and it’s not unusual for spouses to forget to address estate planning issues either before, during, or afterwards. However, not updating certain documents or considering your future financial situation could have serious unintended consequences.

Impact of divorce on existing planning documents

New York law attempts to protect spouses who fail to update their estate planning documents by providing that a final divorce decree automatically triggers certain changes. NY Estates, Powers, and Trusts Law § 5-1.4 states that except as provided by the express terms of a governing instrument, a final divorce decree automatically revokes dispositions of property to a former spouse, including under wills or by beneficiary designations on testamentary assets. In other words, even if the divorced spouses don’t change their estate planning documents to disinherit their former spouse, a divorce decree generally will automatically revoke the disposition of property to the former spouse. The exception would be in the unlikely event that the terms and conditions of the trust, insurance policy, retirement account, etc. expressly stated that a divorce would not revoke the beneficiary designation.

A divorce decree also revokes a former spouse’s authority to act as a fiduciary, executor, trustee, guardian, power of attorney (See NY General Obligations Law § 5-1511) and health care proxy (See NY Public Health Law§ 2985(1)(e)). In the case of real estate jointly-held by spouses, the “tenancy by the entirety” (which means that at the death of the first spouse, the survivor owns 100% of the property) is automatically changed to a “tenancy in common,” meaning that each party holds a half-interest in the property with no right of survivorship.

New York law does not automatically make all of the necessary updates to estate planning documents which should be addressed after a divorce. Certain changes require action by the parties. Common situations you should address with your estate planning attorney include the following:

  • Designations during the divorce process. Finalizing a divorce can take years. While that process is ongoing, you likely do not want your estranged spouse (soon-to-be former spouse) to have authorization to make decisions related to your medical Power of Attorney or to conduct financial transactions on your behalf. These documents should be updated before your divorce is final. (One thing to keep in mind—if you pass away before your divorce is final, you cannot disinherit your estranged spouse, who is still entitled to an elective share of your estate under New York law).
  • Designations to your in-laws. It is common during a marriage for a will to name in-laws as guardians, beneficiaries, or executor. These designations are not automatically eliminated by a final divorce decree.
  • Gaps in designations. For purposes of administering an estate, a divorced spouse is treated as having died before you. This means that if your will named your former spouse as a beneficiary or nominates him/her as an executor, you may now have a gap in your estate plan. While state law does establish an order in which assets not covered by a will are distributed, this may not be consistent with your intentions.
  • Changes required by divorce decree. Spouses may be required to take steps related to estate planning devices as a part of the divorce resolution, such as maintenance of life insurance; or formation of a trust for the benefit of the divorced spouse or for the benefit of a child, but controlled by the divorced spouse as a trustee.

Impact of divorce on retirement accounts and pensions

During the divorce process, the division of retirement accounts and pensions will be part of the financial settlement. Normally the portion of each account that has accumulated during the marriage for both parties is added together and divided, with half the value given to each party. In the case of pensions, the portion accumulated before marriage and after the marriage is over is generally considered separate property; the rest is subject to equitable distribution as marital property. Distribution of retirement accounts and pensions can be complex and involve analysis of the type and value of the accounts and tax consequences when the recipient takes money out of the accounts, in addition to possible penalties for early withdrawal. A lawyer can arrange to have a pension evaluated for purposes of the financial settlement.

Negotiations regarding financial settlements are common. Since the financial settlement will have long-term consequences to the spouses’ retirement and estate planning goals, it’s important to have legal representation. However, litigation is not necessarily the best solution for reaching a beneficial settlement.

In a lawsuit, there is a lawyer for each party (and twice the cost). This is particularly true for the spouse with more assets, who may be required by law to pay for both sides’ attorneys. The process is time-consuming, adversarial and the parties have little control over what occurs or the results. As an alternative, in mediation, one trained person—usually a lawyer—helps both parties negotiate their own agreement without the interference of judges or adversarial lawyers. There is only one (smaller) fee for both people. It is faster and more collaborative. The mediator facilitates creative problem-solving. The parties control the results and are more likely to be satisfied with the outcome.

Once a settlement is reached and the divorce is finalized, New York law automatically revokes beneficiary designations except where the plan documents may have contrary provisions as discussed previously. In the case of retirement accounts and pensions, it is good practice to make these changes yourself to ensure they are implemented particularly if the divorce decree and financial settlement requires a change in beneficiary designation. It is also important to revisit your whole estate plan since your new circumstances may necessitate other modifications.

Divorce involves many legal and financial changes (in addition to the emotional ones). If you are considering divorce, contact Lois Brenner for a consultation to discuss your options.

For assistance with your estate planning during or after your divorce, contact Michael Giusto.


Lois M. Brenner, Esq., PA-C, is a New York Divorce Attorney and an accredited Divorce Mediator with over 35 years' experience. She is also a psychologically trained licensed medical professional. For more information, visit

Michael Giusto is a partner at Neufeld, O’Leary & Giusto and focuses his practice in the areas of estate/trust matters and civil litigation. For more information, visit