Q: Estate planning client has concerns about whether her former spouse can still inherit her assets?
A client had been through a divorce several years before coming to our office for a will, trust and some business transition strategy advice. During marriage she had built up a profitable business, and had retained several assets post-divorce, including life insurance, retirement plans and various investment accounts. She and her ex had put in place simple wills (primarily to designate a guardian for their then minor, now grown children) as well as health care proxies and financial powers of attorney.
She never got around to updating her documents because she assumed that the divorce effectively cut off her ex’s inheritance rights. She was partially correct!
In NH RSA 551:13 provides that a divorce does have the effect of automatically revoking provisions in a will or a revocable trust in favor of a former spouse. However, durable powers of attorney and beneficiary designations under life insurance policies, retirement accounts and other assets fall outside the scope of RSA 551:13. Unlike a will or revocable trust these assets are treated by the courts as “contract assets”. The failure to change the beneficiaries and agents under these documents can result in a former spouse maintaining power as attorney-in-fact or agent, or inheriting the proceeds of these assets.
Estate planning post-divorce, or during a pending divorce, is a complicated process and should be undertaken with the assistance of a seasoned estate planning attorney with input from the divorce attorney.
At Welts, White & Fontaine, P.C. our lawyers have experience representing clients estate planning incident to a divorce. We can help you develop strategies for a successful navigation of New Hampshire’s estate planning landscape. Please contact Attorney John Polgrean if you have questions or concerns about your estate planning matters (603) 883-0797 firstname.lastname@example.org
Author: John Polgrean
This blog is intended for informational use only. The information contained herein should not be construed as offering legal advice or a legal opinion.