When Your Marital Status Changes, So Does Your Estate Plan

In the Press · September 25, 2014

Recently Massachusetts enacted the Massachusetts Uniform Probate Code, which, among other things, replaced a patchwork set of laws governing what happens to your estate plan if your marital status changes. A summary of the new law is set out below, along with steps you can take now to ensure your estate plan accurately reflects your wishes.

Marriage

For many years, Massachusetts law provided that, upon marriage, a will was revoked unless it was expressly executed in contemplation of the marriage. With the recent introduction of the Massachusetts Uniform Probate Code, a will is no longer revoked automatically upon marriage. Generally, under current law, a surviving spouse is entitled to an “intestate share”, or a share of the deceased spouse’s estate equivalent to the share they would have received were there no will. There are several important limits to this rule. The surviving spouse will not be entitled to an intestate share:

1) If the share would compromise property devised to a child (or furtherissue) born before the marriage and not a child of the surviving spouse;
2) If the will was expressly made in contemplation of the marriage; and,
3) If the deceased spouse provided for the surviving spouse through transfer outside the will (e.g. through a will or life insurance) and these transfers were intended to be in lieu of provisions in the will.

What Should You Do After You Get Married?
While your new spouse will automatically receive benefits under your estate plan, it is still important to update your estate plan to make sure your new spouse receives all of the property you would like him or her to receive, to make sure you take advantage of any available estate tax marital deductions and to name your new spouse as fiduciary where appropriate.

Divorce
The Massachusetts Uniform Probate Code also alters the way divorce affects your will. Under prior law, a divorce revoked the testamentary dispositions to decedent’s former spouse, revoked any power of appointment exercisable by the former spouse under the decedent’s estate plan, and revoked any appointments of the former spouse as a executor,trustee, conservator or guardian of the decedent or their estate. This law was expanded by the court to include provisions not just in wills,but also in revocable trusts executed concurrently with the testator’s will. Under separate laws, appointments of former spouses under durable powers of attorney and health care proxies were revoked upon divorce.

The Massachusetts Uniform Probate Code provides that divorce revokes all revocable dispositions to the former spouse, whether in a will, revocable trust (whenever executed), life insurance beneficiary designations and retirement plan beneficiary designations; provided, however, that while the Code purports to revoke life insurance and retirement plan beneficiary designations, courts have found those provisions of the Code to be unenforceable, therefore it is important that a former spouse be affirmatively removed as a beneficiary.

Further, divorce severs any joint tenancy with regard to real estate owned by the former spouses, causing them to now own that real estate as tenants-in-common. Finally, all fiduciary nominations in wills, revocable trusts, health care proxies and durable powers of attorney continue to be revoked. Even though the revocations are automatic upon divorce, you should affirmatively notify all interested persons and companies of your divorce.

Interestingly,while the Massachusetts Uniform Probate Code revokes all benefits and appointments in favor of a former spouse under all revocable estate planning documents, it does not revoke any benefits or appointments under irrevocable documents, such as life insurance trusts. The trustees of an irrevocable trust may, however, be able to “decant,” or transfer, the assets of one irrevocable trust to a new irrevocable trust for the benefit of some but not all of the beneficiaries of the first trust.
Since the trustees are the ones who would make the transfer, decanting could be a problem if your former spouse is a trustee of the original trust.

In addition, the new provisions of the Massachusetts Uniform Probate Code generally only pertain to the parties to a marriage or divorce. It is therefore important that if your family member is going through a divorce, that you review your estate planning documents to ensure your family member’s former spouse is not inadvertently included as a beneficiary or fiduciary.

What Should You Do Now That Your Divorce is Final?
While your former spouse has been effectively removed from the bulk of your estate plan by operation of law, we still recommend that you update your estate plan for several reasons, including:

1) To ensure your former spouse does not possess powers or rights in connection with your estate plan due to his or her status as parent of your children;
2) To remove any confusion that may arise when dealing with third parties, such as banks or other financial institutions; and,
3) To update your fiduciary appointments to reflect your current wishes.

If you would like to speak with an attorney about updating your estate plan, please do not hesitate to call your current Prince Lobel domestic relations attorney, or the author of this alert, Eric D. Kalberg, Prince Lobel estate planning attorney at 617 456 8073 or ekarlberg@princelobel.com.