Recently Divorced? Why You Should Update Your Estate Plan in Texas
Divorce changes more than your marital status. It can also affect who inherits your property, who manages your finances if you become incapacitated, who makes medical decisions on your behalf, and who is responsible for carrying out your wishes after your death.
Texas law automatically addresses some estate planning provisions after a divorce. However, relying solely on those automatic changes can leave gaps or produce results you never intended.
That is why reviewing and updating your estate plan after divorce should be an important part of moving forward.
What Happens to Your Will After Divorce in Texas?
If you created a will while you were married and later divorce, Texas law generally treats certain provisions involving your former spouse as though the former spouse had failed to survive you, unless the will expressly provides otherwise.
The law can also affect provisions involving certain relatives of your former spouse who are no longer related to you after the divorce.
That may prevent a former spouse from receiving property under an old will, but it does not mean your estate plan now reflects what you actually want.
For example, after a divorce you may want to:
Name different beneficiaries
Change how assets are divided among children or other loved ones
Select a new executor or other fiduciary
Reconsider guardianship provisions involving minor children
Review trusts created as part of the estate plan
Instead of depending on default rules to modify an outdated plan after your death, updating your documents allows you to affirmatively state your current wishes.
Related reading: When Should You Update Your Estate Plan?
Review Beneficiary Designations After Divorce
A will does not control every asset you own.
Many assets can transfer according to beneficiary designations, account agreements, survivorship provisions, or other arrangements outside of a will.
These may include:
Life insurance
Retirement accounts
Payable-on-death accounts
Certain bank and investment accounts
Annuities
Other assets with designated beneficiaries
The effect of divorce on these arrangements depends on the type of asset and the law or plan rules that govern it.
For example, Texas Estates Code § 123.151 generally makes a former spouse's designation ineffective on certain P.O.D. and multiple-party accounts after divorce unless an applicable statutory exception applies.
Other assets may be governed by different rules, including federal law.
The safest approach is not to assume that divorce automatically corrected every beneficiary designation.
Review each account individually and make sure the beneficiary currently on file reflects your intentions.
Related reading: 3 Estate Planning Strategies to Keep Assets Out of an Estate
Update Your Durable Power of Attorney
Estate planning is not only about what happens after you die.
A durable power of attorney allows you to designate someone to handle certain financial and property matters on your behalf.
If you previously named your spouse as your agent, divorce can affect that authority. Texas's statutory durable power-of-attorney provisions recognize dissolution of marriage as an event that can terminate a spouse-agent's authority unless the document provides otherwise.
Even when the law terminates your former spouse's authority, an outdated document can create unnecessary uncertainty.
Updating the document allows you to clearly name the person you now trust to act on your behalf.
Your new agent might be an adult child, sibling, trusted friend, or another appropriate individual.
Don't Forget Your Medical Power of Attorney
You should also review who has authority to make health care decisions for you if you become unable to make those decisions yourself.
Under Texas law, unless the document states otherwise, the appointment of a spouse as agent under a medical power of attorney is revoked when the marriage is dissolved, annulled, or declared void.
But once again, automatic revocation does not answer the next important question:
Who should make those decisions now?
Executing an updated medical power of attorney allows you to make that choice yourself.
You should also review other advance planning documents to make sure your instructions regarding medical care and end-of-life decisions continue to reflect your wishes.
Review Your Trusts After Divorce
If your estate plan includes a trust, it deserves its own review.
Depending on the type of trust, its terms, when it was created, and the property it holds, divorce can raise questions involving beneficiaries, trustees, distribution instructions, and control of trust assets.
Trusts should therefore be reviewed alongside your will, powers of attorney, and beneficiary designations rather than treated as a separate planning issue.
Related reading: What Is an Irrevocable Trust and Is It the Right Choice for Your Estate Plan?
What Estate Planning Documents Should You Review After a Divorce?
A post-divorce estate plan review may include:
Your will
Revocable or irrevocable trusts
Durable power of attorney
Medical power of attorney
Advance directives
Beneficiary designations
Payable-on-death and transfer-on-death arrangements
Executor, trustee, and other fiduciary appointments
Guardianship provisions, when applicable
Your financial accounts and estate planning documents should work together.
Changing your will while leaving outdated beneficiary designations or other documents untouched may not accomplish your overall goals.
Divorce Is a Major Reason to Revisit Your Estate Plan
Your estate plan should represent your life as it exists today—not the relationships and circumstances that existed when you originally signed your documents.
Divorce is one of the clearest reasons to conduct a comprehensive review.
Updating your plan can help you:
Clearly identify who should inherit
Choose who should handle your financial affairs
Decide who should make medical decisions for you
Update fiduciary appointments
Coordinate beneficiary designations with your overall plan
Reduce uncertainty for your loved ones
Related reading: When Should You Update Your Estate Plan?
Update Your Estate Plan With Confidence
Texas law may automatically modify certain provisions after divorce, but those default rules are not a substitute for creating an estate plan that affirmatively reflects your current wishes.
A comprehensive post-divorce review can identify outdated documents, beneficiary designations, fiduciary appointments, and other provisions that may no longer align with the future you are building.
Hyde Legal Group helps individuals and families in Texas create and update estate plans that reflect changes in their lives, families, and long-term goals.
If you recently divorced or experienced another major life change, contact Hyde Legal Group to discuss whether your estate plan needs to be updated.
