While each divorce is different, there are a few things that many divorces share in common. Regardless of how amicable the divorce is, there are typically a variety of financial complications involved when a married couple splits. Divorcees who have estate plans may need to make major updates to several components of the plan, although state laws in Washington will automatically revoke some aspects of an estate plan once a divorce has been finalized.
While updating an estate plan after a divorce can be difficult, the estate planning implications of a divorce can be simplified with the assistance of an experienced estate planning lawyer. For more information about estate planning and divorce or other estate planning matters, contact Baxter Legal Services’ team of experienced Washington estate planning attorneys at 425-686-0574.
Updating a Will After Divorce
Divorcing couples who have an estate plan together may need to consider changing or revoking their wills following a divorce. However, Washington state law RCW 11.12.051 states that provisions of a will that benefit the former spouse are automatically revoked once a divorce is finalized. There are a few key components of a will that may need significant updates following a divorce:
- Many divorcees will want to name a new executor of their will if their spouse was previously listed in that role.
- Property gained or lost in the divorce may need to be added or removed, such as a house that was awarded to one of the former spouses.
- Beneficiaries may need to be changed.
Determining what changes will be necessary will vary depending on the circumstances of the divorce. However, anyone who is going through a divorce should revisit their will and most divorcees will need to make some major changes. An experienced estate planning lawyer can provide a professional opinion on what changes need to be made to a will following a divorce.
Can a Trust be Changed Following a Divorce?
A trust may be dissolved after a divorce if it is revocable, while irrevocable trusts cannot be changed or revoked after they have been finalized. Revocable trusts, also known as living trusts, are more common. Irrevocable trusts are most commonly used by wealthy families and individuals to minimize estate taxes.
Living trusts often contain assets from both spouses, including bank accounts, real estate properties, investments, and other high-value assets. It is common to dissolve a living trust during a divorce, with assets from the trust being divided and distributed in a similar process as the other property involved in the divorce. This division process is determined by state laws. The estate planning lawyers of Baxter Legal Services can help you understand how Washington state laws and other factors will affect estate planning and divorce.
Washington State Law on Property Division During Divorce
In Washington state, section 26.09.080 of the Revised Code of Washington states that each spouse has equal ownership of assets and debts accrued during a marriage, and that any assets or debts gained before the marriage or after the separation are considered separate property. Divorce proceedings in Washington also rely on the concept of “equitable and just distribution”, which means that divorce courts will divide and distribute marital property in a way that the court deems fair. There is no guarantee that each spouse will receive an equal share of the marital property.
If a trust was created before the marriage, the assets held in the trust will not be at risk in the divorce. Only marital property is subject to division in the divorce, and a pre-marriage trust is legally considered the separate property of the person who created the trust. For trusts created during the marriage, any provisions that benefit the other spouse will be automatically nullified once the divorce is complete.
Changing Beneficiaries Outside of a Will or Trust
Beneficiaries are not just an important consideration for wills and trusts. Following a divorce, it is important to consider updating beneficiary designations for assets including outside of wills and trusts, such as:
- Retirement accounts like 401(k)s and IRAs
- Life insurance policies
- Payable-on-death bank accounts
- Transfer-on-death brokerage accounts
In many cases, individuals name their spouses as beneficiaries of these accounts. Most divorcees will want to change this designation once they have filed for divorce and may wish to name new beneficiaries who will inherit their assets. Unlike wills and trusts, state laws may not automatically revoke these types of beneficiary designations for former spouses. For example, 401(k)s and pensions are governed by the federal Employee Retirement Income Security Act (ERISA). This law states that funds will be distributed to beneficiaries named in documents, regardless of state law, unless the plan holder changes the beneficiaries themselves.
Changing Power of Attorney
Most estate plans include two powers of attorney: a healthcare directive and a financial power of attorney. Married couples who build an estate plan together often grant their spouse both of these powers of attorney. In Washington state, powers of attorney granted to a spouse are also automatically revoked once documents have been filed for divorce, dissolution, or legal separation. This law is designed to offer protection against one spouse accessing the other spouse’s assets against the asset owner's wishes. Individuals who reside in states without similar laws should consider naming new powers of attorney as soon as possible.
How an Attorney Can Help with Estate Planning and Divorce
A strong estate plan is crucial for ensuring that assets and other property are distributed according to our wishes after we pass away or become incapacitated. However, the estate planning process does not end once an initial estate plan has been finalized. Estate plans should be reviewed regularly, and major life changes like divorce often require major changes to an estate plan.
Updating an estate plan following a divorce may not be easy, as there are many complex variables to consider, including the personal needs of the divorcee and how state and federal laws may affect the process. As a result, many divorcees seek legal counsel from experienced estate planning and divorce lawyers. At Baxter Legal Services, our Washington estate planning lawyers help our clients with a variety of estate planning matters, including updating estate plans after divorces. To learn more about divorce-related estate planning matters, contact us at 425-686-0574.