Death After Divorce — Who Inherits?

It is common for married couples to craft wills that leave the entirety of one spouse’s estate to the other. In fact, according to New Jersey law, if no will exists and the deceased was married, his or her spouse may automatically inherit the estate. When a couple divorces, ideally, they each obtain new wills to address their change in circumstances. Likewise, estate lawyers recommend that wills be updated or replaced with any major life change.

What happens, however, if a couple divorces and doesn’t update their wills? In New Jersey, the outcome is dictated by statute. Upon finalization of the divorce,N.J.S.A. 3B:3-14 automatically revokes any dispositions or appointments of property made between former spouses prior to the divorce.  Thus, the provisions of the will leaving property to the former spouse are given no effect and instead the property passes to the next beneficiary named in the will, or if none is named, then the estate passes according to state laws of intestacy.

The statute also revokes any powers granted to the former spouse as well as the right of the former spouse to claim joint assets. For example, after divorce, your interest in property owned jointly by you and your former spouse would pass through your estate instead of passing directly to your former spouse if you die.

Awareness of state law is important for the following two reasons:

1. First, some spouses, despite a divorce, may still wish to bequeath their property to their former spouse. It is common for a divorcee to desire to leave some property to a former spouse or to empower a former spouse to make important medical and financial decisions on his or her behalf. In such an instance, the divorcee must make a new will or other new documents post divorce to effectuate those wishes.

2. Second, a divorce may impact your chosen line of beneficiaries.  If you do not update the order in which you want your property distributed, it will automatically flow to the next beneficiary named after your former spouse.

Importantly, divorce does not affect all transfers and dispositions. Transfers made through irrevocable trusts and rights as a beneficiary in a qualified retirement plan remain intact despite the divorce. Accordingly, if you do not intend for your qualified retirement plan to continue to benefit your former spouse, you should update your beneficiary designation.

As the estate planning process can become complicated, especially in light of divorce, it is in your best interests to consult with an attorney for guidance throughout the process. Creating a thoughtful estate plan — one that may include a last will and testament, revocable and irrevocable trusts, advance healthcare directives and prenuptial agreements, to name a few — is no task to tackle on your own. For help in Union or Hunterdon County or elsewhere in NJ, email Alec Borenstein, Esq., a partner with the firm, at alec@bmcestateplanning.com or call 908-236-6457 today.