Divorce can be heartbreaking, emotional, overwhelming, or even liberating, depending on the circumstances.
At McDonald Law Firm, we believe it is responsible for families to create an estate plan. We also recognize that divorce creates specific estate planning challenges.
If you are going through a divorce or have recently finalized one, the last thing you probably want to think about is more legal paperwork. However, failing to review your estate plan can have serious and long-lasting consequences.
For example:
- Is your former spouse still named on a life insurance policy?
- Who can make healthcare decisions if you become incapacitated?
- Who will manage your financial affairs?
- Who will serve as your personal representative or trustee?
- Do your retirement account designations match the divorce agreement?
- Does the deed to your home reflect the divorce decree?
State law may automatically revoke or terminate some rights granted to a former spouse. However, those rules vary by document, account, jurisdiction, and stage of the divorce.
Do not assume the divorce decree updates everything automatically. Each part of your estate plan should be reviewed directly.
When Should You Review Your Estate Plan During a Divorce?
Estate planning should be considered at three different stages:
- When divorce is being considered or filed
- While the divorce is pending
- After the divorce becomes final
What you can change may depend on the divorce proceeding, court orders, marital property rules, and agreements between the spouses.
Before changing ownership, beneficiaries, or substantial assets while a divorce is pending, coordinate with your family law and estate planning attorneys. An improper change could violate a court order or affect the division of marital property.
After the divorce is final, review the entire plan again. The final agreement or court order may create obligations that must be reflected in your estate planning documents.
How Important Is It to Update Your Estate Plan After Divorce?
It is extremely important.
Divorce affects your family relationships, property ownership, decision-makers, and financial obligations. An estate plan created during the marriage may no longer reflect what you want.
Some provisions benefiting a former spouse may be revoked automatically under state law. Others may remain effective until you change them.
Federal law, plan documents, contractual obligations, and the divorce decree may also control certain assets.
Reviewing the complete plan helps ensure that your wishes are clear and that the correct people have authority to act.
Should I Update My Will After Divorce?
Yes. Your will should be reviewed and updated after divorce.
In Maryland, an absolute divorce or annulment generally revokes provisions in a will relating to the former spouse, unless the will or divorce decree provides otherwise. This rule appears in Section 4-105 of the Maryland Estates and Trusts Code.
However, relying only on automatic revocation can create uncertainty.
Your existing will may still:
- Name people connected to your former spouse
- Contain a distribution plan designed for the former marriage
- Name an inappropriate backup personal representative
- Fail to address property received in the divorce
- Include outdated guardian nominations
- Create gaps after the former-spouse provisions are removed
A will is a foundational estate planning document. It can be used to:
- Leave property to family members or charities
- Name a personal representative
- Nominate guardians for minor children
- Create trusts for children or other beneficiaries
- Explain how probate assets should be distributed
Updating the document directly provides a clearer plan than relying on state law to remove isolated provisions.
Should I Update My Revocable Living Trust?
Yes. Review your revocable living trust after divorce.
Your former spouse may have been named as:
- A current or successor trustee
- A beneficiary
- A person with the power to remove or appoint a trustee
- A person authorized to make decisions during your incapacity
- A recipient of trust property at your death
The trust may also have been designed around shared property, tax planning, or family goals that no longer apply.
A revocable living trust can hold and manage assets during your lifetime. It can also provide instructions for incapacity and distribute properly funded assets after death without probate.
A trust may provide greater privacy than a will because its terms do not ordinarily become part of a public probate record simply because the trustmaker dies.
However, the trust must be coordinated with the divorce decree and the new ownership of property. Assets awarded to a former spouse must be removed or retitled as required. Assets awarded to you may need to be transferred into your updated trust.
Do I Need to Update My Financial Power of Attorney?
Yes. You should review and usually replace a financial power of attorney that names your former spouse as agent.
A financial agent may have authority to:
- Access bank accounts
- Manage investments
- Pay bills
- Handle real estate
- Enter into contracts
- Manage business interests
- Address taxes
- Apply for government benefits
- Pursue legal claims
Maryland law generally terminates a spouse-agent’s authority when an action is filed for divorce, annulment, or legal separation, unless the power of attorney provides otherwise. The rule is explained in Section 17-112 of the Maryland Estates and Trusts Code.
Even when the former spouse’s authority terminates automatically, you should prepare an updated document.
The old power of attorney may not name an appropriate successor. Financial institutions may also be uncertain about who currently has authority.
A new document provides clear instructions and reduces the risk of delay during an emergency.
Should I Update My Healthcare Power of Attorney?
Yes. Your healthcare agent designation should be reviewed during and after divorce.
A healthcare power of attorney, usually included in an advance directive, names someone to make medical decisions if you cannot make or communicate those decisions yourself.
The healthcare agent may be asked to decide:
- Whether to approve a treatment
- Which doctors or facilities should provide care
- Where you should live or receive treatment
- Whether life-sustaining procedures should be used
- How your stated healthcare wishes should be followed
Maryland law places restrictions on a spouse serving as healthcare agent after a separation agreement or divorce filing unless the person has indicated an intention for that spouse to continue serving. The relevant provisions appear in Maryland’s law governing advance directives.
Do not rely on healthcare providers to determine whether an old appointment remains valid during an emergency. Complete a new directive that clearly identifies your preferred agent and backup agent.
If no healthcare agent is available and you cannot make decisions, Maryland law may authorize a surrogate, such as a family member or close friend, to act according to a statutory order of priority.
That person may not be the individual you would have chosen. A current advance directive gives you more control.
Do I Need to Update My Living Will?
Yes. Review the medical instructions in your living will or advance directive.
A living will is commonly understood as the part of an advance directive that explains your preferences for medical care if you become seriously ill and cannot communicate.
It may address:
- Life-sustaining treatment
- Artificial nutrition and hydration
- Ventilator use
- Pain relief
- End-of-life care
- Organ donation
- Other treatment preferences
A living will is not exactly the same as naming a healthcare agent. One provides instructions, while the other appoints a person to make decisions.
Both may appear in the same advance directive.
You should review the document to make sure it names the correct decision-maker and still reflects your medical preferences. The Maryland Department of Health provides information and forms for advance healthcare directives.
Should I Update My Beneficiary Designations?
Yes. Review every beneficiary designation individually.
Beneficiary designations may control:
- Life insurance
- Annuities
- Employer retirement plans
- IRAs
- Health savings accounts
- Payable-on-death bank accounts
- Transfer-on-death investment accounts
These assets generally pass according to the designation on file, not according to your will.
Do not assume that divorce automatically removes your former spouse from every account. The result may depend on state law, federal law, the account contract, and the divorce decree.
Retirement Accounts Require Special Attention
Employer-sponsored retirement plans may be governed by the federal Employee Retirement Income Security Act, commonly known as ERISA.
Federal rules and the plan documents may control who receives the benefit. A divorce decree may also require a qualified domestic relations order, or QDRO, to assign some or all of a retirement benefit to a former spouse.
The U.S. Department of Labor explains that a QDRO can assign retirement benefits to a spouse, former spouse, child, or dependent.
Before changing a retirement account beneficiary, confirm whether the divorce agreement or QDRO requires the former spouse to receive any portion.
Life Insurance May Be Required by the Divorce Agreement
A divorce decree may require one spouse to maintain life insurance for child support, alimony, or another financial obligation.
Removing a former spouse or changing coverage without reviewing that requirement could violate the agreement.
Contact each insurance company and account administrator directly. Request written confirmation after the changes are completed.
Do I Need to Update the Deed to My House?
Maybe.
If both spouses owned the home and the divorce decree awards it to one spouse, the land records may still need to be updated.
A divorce decree does not always change the recorded deed automatically. A new deed or other document may be required to remove the former spouse’s ownership interest.
The person receiving the home should also review:
- The mortgage
- Homeowners insurance
- Property tax records
- Homestead or principal residence filings
- Title insurance
- Any living trust connected to the property
Changing the deed does not necessarily remove a spouse from the mortgage. Refinancing or lender approval may also be required.
Work with the divorce attorney, estate planning attorney, lender, and title professional to ensure the ownership and loan records match the final agreement.
Should I Review Guardianship Plans for My Children?
Yes. Divorce may affect how you think about guardians and financial management for minor children.
The child’s surviving legal parent will usually have priority to care for the child if the other parent dies. A will generally cannot eliminate the surviving parent’s rights without a legal basis.
However, you should still review:
- Backup guardian nominations
- Trusts for minor children
- The person selected to manage a child’s inheritance
- Life insurance beneficiaries
- Instructions for educational or medical needs
If you do not want your former spouse to control property inherited by your child, a trust may allow you to name a different trustee to manage the inheritance.
The person who raises the child does not have to be the person who manages the child’s money.
Should I Update My Digital Estate Plan?
Yes. Divorce is also a good time to review digital access and online accounts.
Update:
- Passwords
- Account recovery contacts
- Shared cloud storage
- Email access
- Social media legacy contacts
- Password managers
- Digital wallets
- Online financial accounts
- Shared subscriptions
Changing a password is not a substitute for updating legal authority. Your power of attorney, will, or trust may also need provisions addressing digital assets.
What Documents Should Be Reviewed After Divorce?
A complete post-divorce review should include:
- Will
- Revocable living trust
- Financial power of attorney
- Advance healthcare directive
- Living will instructions
- Life insurance beneficiary designations
- Retirement account beneficiary designations
- Payable-on-death and transfer-on-death accounts
- Real estate deeds
- Business agreements
- Guardianship nominations
- Trusts for minor children
- Digital asset instructions
- Funeral and burial instructions
You should also review documents that name backup decision-makers. Those individuals may have been selected because of their relationship with your former spouse.
What If the Divorce Is Not Final Yet?
Do not wait until the divorce is complete to obtain advice.
You may be able to update certain documents while the case is pending. Other changes may be restricted by court orders, marital property laws, or agreements between the spouses.
A coordinated review can identify:
- Documents that can be changed immediately
- Changes that require consent or court approval
- Beneficiary designations that should remain in place temporarily
- Obligations that will continue after divorce
- Updates that should be completed immediately after the final order
Never conceal, transfer, or retitle marital property in an effort to remove it from the divorce proceeding.
Create a Clear Post-Divorce Estate Plan
Do not let decisions made during your marriage continue to control your affairs unintentionally.
Some former-spouse provisions may terminate automatically, but relying on those default rules can leave gaps and create disputes. Updating each document directly provides clearer instructions for your family, financial institutions, healthcare providers, and the court.
McDonald Law Firm understands that divorce can be stressful and overwhelming. We can guide you through the estate planning steps needed to protect yourself and your family.
To schedule a consultation, contact us:
- Howard County: 443-741-1088
- Montgomery County: 301-941-7809
- District of Columbia: 202-640-2133
You have enough things to worry about right now. Your estate plan does not need to be one of them.
DISCLAIMER: THE INFORMATION PROVIDED IN THIS GUIDE IS INTENDED FOR EDUCATIONAL PURPOSES ONLY AND IS NOT INTENDED TO CONVEY LEGAL, INSURANCE, OR TAX ADVICE.