The Big D – Estate Planning and Divorce
In his hit song from the 1990s “Goin’ Through the Big D” country singer Mark Chesnutt sang:I'm goin' through the big DAnd don't mean DallasI can't believe what the judge had to tell usI got the Jeep she got the palaceI'm goin' through the big DAnd don't mean DallasThis is one of many country and western songs about being on the wrong side in a divorce proceeding. While we may laugh at the lyrics, there is really nothing fun about being in the midst of a Divorce. It is an emotional, difficult and often expensive process. But as a recent article in the Wall Street Journal reminds us, just because the decree is final does not mean the work is done. The article is about a case in New York involving the estate of Robyn Lewis. Lewis divorced her husband James Simmons in 2007. Despite the divorce, the will of Ms. Lewis went unchanged and at her death named Simmons as the beneficiary and his father as the alternate beneficiary. New York law provides that a divorce automatically revokes any gift to the now ex-spouse. So Simmons had no claim, however, the New York Court held that Simmons’ father, the ex-father-in-law, remained a valid beneficiary. This decision is scheduled to be reviewed by the New York court of appeals in the near future. So stay tuned. But, regardless of whether or not Lewis’ family ultimately prevails you should never want to place your family in a position where a court will need to decide.Divorce (yours or that of a beneficiary, trustee, guardian, etc.) is just one more reason to regularly review and update your estate plan. A divorce should be trigger event to meet with your estate planning attorney and other financial and life insurance professionals to review your trust, will, powers of attorney, health care directive/living will and other planning documents to ensure they continue to reflect your wishes. Beneficiary designations on life insurance policies or other transfer on death accounts should be reviewed and updated as well. In 2013, the U.S. Supreme Court ruled in the case of Hillman v. Maretta that an ex-wife was entitled to the proceeds of a life insurance policy when she was not removed as a beneficiary of the policy.So don’t procrastinate. If you are now or have ever been through a divorce get with a qualified estate planning attorney to review and update your estate plan as needed. You don’t want the ex to end up with the Jeep and the palace.