Estate Planning and Former Spouses: Updating your Will, Life Insurance and Other Beneficiary Designations following a Divorce


Following a divorce, you should carefully review your estate plan to ensure that your former spouse will not receive any unintended distributions from your estate.  Unless otherwise required by the terms of the divorce, you should revise your Will to remove your ex-spouse as a beneficiary.  You also should update beneficiary designations for any non-probate assets in which you hold an interest, such as life insurance policies, retirement plans and joint bank accounts.

Even if you neglect to revise your estate plan, New Jersey law provides some protection by presuming that a divorce generally revokes a former spouse’s designation as a beneficiary under any “governing instrument.” N.J.S.A. 3B:3-14.  The term “governing instrument” is defined broadly to include a variety of items, such as deeds, Wills, trusts, insurance policies, retirement and bank accounts and powers of attorney. N.J.S.A. 3B:1-1. 

However, N.J.S.A. 3B:3-14 does not apply in all situations. Courts have concluded that the statute cannot trump beneficiary designations governed by the Employee Retirement Insurance and Security Act (“ERISA”).  See Juno v. Verizon Communications, Inc., 2011 WL 1321683 (D.N.J. Mar. 31, 2011) (holding N.J.S.A. 3B:3-14 did not apply to 401(k) ERISA plan); In re Kensinger, 2010 U.S. Dist. Lexis 116078 (D.N.J. Nov. 1, 2010) (same).  Nor can it disturb beneficiary designations made pursuant to the Servicemembers’ Group Life Insurance Act. See Calmon-Hess v. Harmer, 904 F. Supp. 2d 388 (D.N.J. 2012).  Moreover, the Supreme Court of the United States recently held that a similar Virginia statute could not alter a beneficiary designation controlled by the Federal Employees’ Group Life Insurance Act.  See Hillman v. Maretta, 133 S. Ct. 1943 (2013).

Accordingly, the best method to prevent confusion, unnecessary disputes and the unwanted disposition of your assets to a former spouse is to update your estate plan promptly after a divorce.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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