Imagine this nightmare scenario: after a long and contentious divorce, you leave the courthouse—and drop dead of a heart attack from the stress on the sidewalk outside. You were on your way to your estate planning attorney’s office across the street to update your last will and testament and other estate planning documents, but you never made it. Does your ex-spouse still inherit based on your current estate plan that you made while you were married?
Thanks to Michigan statutory law, the answer, generally, is no. MCL 700.2807 revokes gifts or appointments made to a now-former spouse in a will or trust. The law also revokes powers of appointment conferred on your ex; nominations of your ex to serve as executor, trustee, or other fiduciary; and makes any property you shared as joint tenants with right of survivorship a tenancy in common. That means while your ex retains their share, they cannot claim yours.
But there are some things the law doesn’t automatically revoke after divorce—like beneficiary designations under ERISA-governed retirement accounts or insurance policies, as well as some irrevocable trusts.
The bottom line is that you should always update your estate plan after a major life event like a divorce or remarriage. Here’s what to think about.
Why Update an Estate Plan After Divorce?
Even if the law revokes any gifts or appointments to your ex-spouse, or your ex’s role as fiduciary, you should still update your last will and testament and other estate planning documents. One reason, as mentioned, is that the “revocation on divorce” law doesn’t cover everything.
Another reason to update your planning is that the law may remove your spouse (they are generally treated under the law as if they have predeceased you, for purposes of your estate), but it doesn’t automatically replace them with the person whom you would want to receive assets. Instead, the gift may default to whoever is next in line under Michigan law, which may not be the person you would choose. Similarly, if you haven’t named an alternate personal representative or trustee, you may need to nominate someone else for those fiduciary roles.
But perhaps the best reason to update your estate plan after a divorce or remarriage is clarity. If you have taken the time to make a new plan in light of your changed circumstances, your loved ones will not have to wonder if the plan you have reflects your true wishes. The same is true of updating your estate plan after a remarriage.
How to Update Your Estate Planning Documents After Divorce
Step 1: Inventory Your Current Plan
Gather all of your existing estate planning documents, including your will, any trusts, powers of attorney, advance healthcare directives, and funeral representative designation, if any. In addition, gather documents for accounts with beneficiary designations, like retirement accounts, life insurance policies, transfer-on-death accounts, and annuities. Last, assemble any real estate deeds, vehicle titles, and documentation of any business interests you own.
If you have an estate planning attorney, they will help you identify needed documents, making the process less stressful.
Step 2: Review Your Goals
Together with your estate planning attorney, review your goals for your estate plan, including making sure that your ex-spouse doesn’t benefit. Beyond that, identify any new goals you may have, such as protecting the inheritance of the children of your previous marriage in the event you remarry.
Step 3: Review Applicable Court Orders
Your judgment of divorce may require you to keep your ex-spouse as a beneficiary on certain assets, such as life insurance, to secure child support. You may also be obligated to use a Qualified Domestic Relations Order (QDRO) to direct some of your retirement benefits to your former spouse. Any changes to your estate planning will need to honor these obligations.
Step 4: Update Beneficiary Designations
File new beneficiary designation forms with retirement plan administrators, life insurance companies, and banks or brokerage firms for any transfer-on-death accounts. Remove your ex-spouse as beneficiary (unless required to keep them on by QDRO or other court order). Add new primary beneficiaries as well as contingent beneficiaries should your primary beneficiary predecease you.
Step 5: Correct Property Ownership
Retitle assets such as vehicles, boats, and business shares to remove your ex-spouse. If you owned property with your ex as a joint tenancy with rights of survivorship, you now have a tenancy in common; neither of you has an automatic right to take full ownership of the property upon the other’s death; instead, the property will pass to your respective heirs.
Step 6: Work with Your Attorney to Revise Your Estate Plan
Having discussed your current estate planning goals with your attorney, it’s time to update or amend your will, trust, powers of attorney, and other documents to reflect your current estate planning goals. Don’t forget to contact your attorney again if you have another major life change, such as a remarriage or the birth of a new child.