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How Will My Divorce Affect My Estate Plan in Alabama?

Home » How Will My Divorce Affect My Estate Plan in Alabama?

Divorce and estate planning go hand in hand. While the number of divorces in Alabama and Cullman County is down from 6.1 to 3.6 in 1,000 people, this doesn’t make it any easier for those going through proceedings.

You planned a life with your spouse, shared assets and planned your estate around “happily ever after.”

Unfortunately, your divorce will trigger immediate changes to your estate plan and some that you might want to make before the divorce is finalized.

How Does a Divorce Change Your Estate Plan?

Alabama’s divorce and estate planning laws protect divorcees in ways that many other states do not. Alabama Code Section 43-8-137 outlines automatic changes to your plan, including:

  • Divorce revokes testamentary disposition
  • Property will be divided as if your spouse did not survive you

If you appoint your spouse as your executor, which is quite common, this appointment is automatically revoked as well. You can add your ex as an executor following the divorce if you wish for them to maintain this right. For couples that fall out of love but remain close or best friends, the person can be added back into your estate plan after divorce.

Specific language must be in place to ensure that there’s no confusion that you want your ex to inherit a portion of your assets or any rights that you may grant them within your will.

However, if you remarry your ex, revocation of these rights may be reversed if they were revoked only due to divorce. 

Notice that these changes pertain to your will and testament, which is only one of many estate documents that make up your entire plan. You must update quite a few documents to ensure that your current wishes are upheld. 

What Documents Will Need Updating Following a Divorce?

Divorce and estate planning requires due diligence to validate that your post-divorce wishes are in place. Your estate may have one or a mixture of the documents below, all of which should be reviewed by a lawyer.

Documents that require immediate attention are:

Wills and Trusts

Following a divorce, it’s typically best to revoke your old will and draft a new one. In Alabama, divorce automatically revokes your ex-spouse’s ability to inherit your assets. However, those assets may then be given to an alternative or residuary beneficiary, which may not be what you wish.

A new last will and testament will reflect your current wishes, including the person you wish to be the executor of your estate and the guardian of your minor children.

Just like your last will and testament, a new living trust should be executed after a divorce.

As a general rule of thumb, you should revisit your estate plan documents any time you experience a major life-changing event, such as a divorce. Otherwise, your last wishes may not be carried out the way you had hoped.

Powers of Attorney

Following a divorce, you should update your powers of attorney documents to reflect your current wishes.

These can include:

  • Financial power of attorney, which gives the agent the right to manage your financial and business affairs, such as filing tax returns, managing investment accounts, and signing checks. Should you become incapacitated, your agent will have broad power to make deposits and withdrawals or even make beneficiary designations.
  • Limited power of attorney, which gives the agent the ability to act on your behalf for specific matters or events, such as managing your retirement accounts. 
  • General power of attorney, which allows your agent to act on your behalf in any matter allowed by Alabama law. 
  • Durable power of attorney, which allows the agent to remain in control of certain financial, legal or property matters specified in the agreement. However, durable agents cannot make decisions related to your health.

Advanced Directives

Health care power of attorney is another advanced directive that must be updated. This directive gives someone else the power to make medical decisions on your behalf if you’re unable to do so yourself.

Beneficiary Designations

If your former spouse is listed as a beneficiary on your financial accounts, life insurance policy, real estate, or other assets, you will need to update these designations.

Retirement accounts that are opened or funded during a marriage are typically considered marital assets and divided during the divorce proceedings. In this case, the judge may determine whether you can make changes to your beneficiary designations on these accounts.

It’s important to remember that if your parents have an estate plan that names your former spouse as a beneficiary, they should also consider revisiting their plans. 

Sometimes, divorcing couples remain friends and continue to trust each other. There is nothing preventing you from leaving assets or a gift to your ex in your will or naming your former spouse as:

  • A beneficiary
  • Power of attorney agent
  • Guardian for minor children

However, you may still want to update your documents to reflect these wishes after the divorce is finalized.

What if Your Divorce Is Not Final but You Want to Change Your Estate Plan?

If your divorce is still pending, you may wish to change your estate plan for a number of reasons. Alabama law only revokes a former spouse’s disposition to property from your estate after a divorce is finalized. 

Until then, your soon-to-be-ex may still inherit your assets and make decisions on your behalf if you pass away or become incapacitated.

While your divorce is pending, you may wish to change your:

  • Advanced health care directive
  • Durable power of attorney
  • Beneficiaries on your last will and testament

Alternatively, you may want to revoke your last will and testament or prepare a new one.

In either case, it is important to consult with an attorney if you wish to make changes to your estate plan before your divorce is finalized. Your attorney will guide you through the process and ensure that your documents are updated properly.

How Can Hankey Law Firm Help With Adjustments to an Estate Plan Following Your Divorce?

Divorce and estate planning can be complex, but we can help. Hankey Law Firm can guide you through the process of updating your estate after your divorce. We will work closely with you to adjust your powers of attorney, advanced directives, will, trust and other essential estate planning documents. 

Our firm serves clients in Cullum, Blount, Morgan (Decatur), and Winston Counties. 

Contact us today to schedule a consultation.