Estate Planning After Divorce

Partly, and the gaps are what hurt. In 37 of 51 jurisdictions, divorce automatically revokes an ex-spouse beneficiary designation — life insurance, retirement accounts, payable-on-death and transfer-on-death registrations — and treats them as having predeceased you. In the remaining jurisdictions, nothing is revoked and your ex stays named. And in every state, an employer 401(k) is governed by federal law that overrides the state statute entirely, so your ex remains its beneficiary until you file a new form with the plan. Assume nothing updated itself and check who is on file for every account.

Divorce does not revoke your will. What most states do is treat the gift to your ex-spouse as though they died before you — the rest of the will stands, including the executor you named, who may well be your ex or their relative. That leaves you with a will that technically works and does not say what you now want. Two things need to change deliberately: who inherits, and who serves as executor and guardian. Make a new will rather than patching the old one — a codicil that unwinds an ex-spouse from a document that mentions them a dozen times is how disputes start.

Because federal law says so. ERISA governs employer-sponsored plans and preempts the state statutes that would otherwise revoke an ex-spouse designation on divorce — the Supreme Court settled this in Egelhoff v. Egelhoff, 532 U.S. 141 (2001). The plan administrator pays whoever is on the form, and neither your divorce decree nor your state's revocation statute changes that. File a new beneficiary designation with the plan directly. An IRA is not an employer plan, so state law can reach it — but the safe assumption is still that you change every form yourself.

Maybe not. Many states issue automatic temporary restraining orders (ATROs) during divorce proceedings that prohibit changing beneficiaries, canceling insurance, or transferring assets. Check your state's rules and your divorce filings before making changes. Once the divorce is final, update immediately.

Your ex likely retains parental rights regardless of divorce. If you die, your children will typically go to their other parent — that's not something your estate plan can override. What you can control: who manages their inheritance (your trustee), who serves as backup guardian if both parents are unavailable, and the terms under which your children receive assets.

A new trust is cleaner. Your old trust probably names your ex-spouse throughout — as co-trustee, successor trustee, beneficiary, and more. Amending all of that creates a messy document with room for confusion. Starting fresh ensures your plan reflects your life now, not your marriage.

Follow the decree. Divorce agreements often require maintaining life insurance with your ex-spouse or children as beneficiaries, especially if you owe child support or alimony. Changing those designations could put you in contempt of court. Keep what you're required to keep — and update everything else.