Divorce and Estate Planning in Michigan

Going through and getting over a divorce certainly takes its toll. A divorce is a process of unwinding the marriage itself, the property, and sorting out each other’s legal obligations. It can affect your estate planning objectives significantly.

When the Divorce is Final,  Your Estate Plan Documents Need to be Updated Immediately

Many married couples have an estate plan that leaves everything to the spouse and there is a Michigan statute (MCL 700.2807) that revokes these provisions when the couple divorces, but relying on this statutory revocation is never a good idea – it is a mistake to think that your estate plan will automatically take care of itself.  Ultimately, when a married couple divorces, there is an immediate need to prepare new estate plans.

Other than gifts to your ex-spouse, there are other parts of your estate plan that may need to be revised, because the ex-spouse is often specifically designated in them such as:

  • Changing trustees and/or personal representatives
  • Changing trust or estate beneficiaries
  • Updating all beneficiary designations, including retirement accounts, life insurance policies, bank accounts, and brokerage accounts
  • Creating new powers of attorney for healthcare and financial matters
  • Naming a guardian for minor children, in the event your ex-spouse is unable to care for them (assuming the ex-spouse is the other parent)

Note that Michigan law only revokes language in wills or other documents signed prior to the divorce. This means that you are free to make new Will after the divorce, naming your ex-spouse as Personal Representative or Trustee or some type of beneficiary. (Yes, believe it or not, some divorced couples still remain on friendly terms.)

Failure to Update Your Estate Plan After Divorce Can Have Unintended Results

As I mentioned earlier, Michigan law provides that a divorce revokes a disposition of property made by a former spouse in a Will. However, this statutory provision only affects property given to a former spouse in the Will – not financial assets like retirement accounts or life insurance or other payable-on-death accounts. So, for these accounts, the beneficiary designations for those accounts are not automatically revoked upon divorce.  They will need to be updated immediately because otherwise the ex-spouse, if he or she is still named as the primary beneficiary, may successfully claim those assets – and that may not be your intent.

Major Caveat: Your New Estate Plan Needs to Abide by the Divorce Judgment or Settlement

Before updating your estate plan documents, a review of the divorce judgment or settlement is required. It might actually require the ex-spouse be named as beneficiary to all or a portion of certain assets. So always consult the divorce judgment before updating your estate planning documents and your beneficiary designations. This is why I always ask new clients if there is a divorce judgment in place for a prior marriage.

Everyone situation is unique. A divorce can be an immensely difficult and stressful time but it doesn’t need to be that way for your beneficiaries after you pass away. So it is so important to update your estate plan documents when a divorce is anticipated and especially when it is final.  Contact me with any questions.



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