I was working with a client recently who had just gotten divorced. He wanted to update his estate plan to make sure that all of his ex-wife's rights to his estate had actually been terminated. Naturally, if he passed away, he did not want to leave her his money and physical property. He wanted it to go to his children.
We talked about how divorce can often terminate some of these rights automatically, though not all of them, and how that meant it was important to comb through the plan, just as he was doing. But it also got me thinking. What if he had passed away before his divorce got finalized?
Say, for instance, that he filed for divorce and determined that his estate plan was crafted in such a way that the end of the marriage would automatically cut his wife out of that plan. He didn't bother to make any updates, assuming it would all take care of itself. Then, a week before the court gave him the official divorce decree, he passed away in a car accident. What would happen?
As you may have guessed already, that would mean his soon-to-be ex still got whatever he left to her in his will and his original estate plan. The marriage was technically and legally still intact, even if it was clearly "over" in their minds. His assets would pass to a partner he was about to divorce and no one could stop it from happening.
What this means is that you shouldn't just think about reviewing your estate plan after divorce. You should think about reviewing it during a divorce.