Divorce and New York Estate Planning

In News by Michael Mangini

One common question we hear after completing a New York estate plan is, what happens if I get a divorce? Many folks don’t realize that New York has a law that automatically revokes gifts or appointments to ex-spouses after a divorce or judicial separation. New York law defines a judicial separation as “a final decree or judgment of separation, recognized as valid under the law of this state, which was rendered against the spouse.”

The law revokes:

  • gifts under a Will;
  • disposition by beneficiary designation in a life insurance policy, pension or retirement benefits plan;
  • gifts by revocable trust, including a bank account in trust form; and
  • powers of appointment or powers to serve in any fiduciary or representative capacity, including as a personal representative, executor, or trustee.

This doesn’t mean that the former spouse’s name automatically disappears from all documents. Instead, it simply means that for purposes of your assets, a former spouse is treated as having predeceased you.

Also, it’s important to note that the law does not apply to irrevocable beneficiary designations, such as in an irrevocable trust.

What Happens To Joint Property Upon Divorce?

Of course, all of the foregoing assumes property that’s owned by one spouse individually, and not jointly. But, the reality is that many spouses hold major assets (like homes) jointly. What happens to that property? 

Upon divorce, New York law automatically transforms spousal joint tenancy interests into “tenancies in common.” The major difference here is that the latter form of ownership doesn’t carry with it automatic right or survivorship for the benefit of the other spouse. Under a tenancy in common, both owners may leave their 50% interest to whomever they wish.

Should You Change Your Estate Plan After Divorce?

Yes. Don’t simply rely on operation of New York law to remove your former spouse from your estate planning. This can create problems for your beneficiaries.  

For example, if you only had your former spouse listed as a beneficiary on your bank accounts with no contingent beneficiaries, your assets would have to go through estate administration before passing to your heirs.  If you designate beneficiaries on your accounts, then the assets will pass directly to them without the need for probate.

It is always a good idea to revisit your estate plan during and after a major life event, such as divorce, judicial separation, or annulment.  

As we previously blogged, if you die in the middle of a divorce or separation proceeding, the law discussed above does not come into play, and your spouse may still benefit from your estate plan.

Does A Divorce In New York Invalidate A Will?

No.  A divorce in New York will not invalidate the entire will.  A court would only re-form the provisions in favor of the former spouse, to pretend as if your spouse pre-deceased you.  

However, if you only have your spouse listed as a beneficiary, or if your spouse is nominated to serve as personal representative, with no back-up representative appointed, your Will could end up not being probated by anyone after your death.

Call or email Velella & Basso today to update your estate plan. 

The information on this website is not legal advice. It is for information purposes only. No user of this site should act or refrain on the basis of this information without seeking legal counsel. This website does not create an attorney-client relationship. Photo credit: Andrii Yalanskyi/ Shutterstock Stock Photo ID 1415475047