Upon the relief of finally achieving a divorce judgment, you might consider that all the work is now done to sever the relationship with your ex-spouse. Don’t be fooled, there is still work to do.
The failure to do this work has at times resulted in an ex-spouse receiving assets that a person did not intend to benefit the ex-spouse after the divorce. Recent changes in the law in Maine, while taking care of unintended benefits to an ex-spouse, could have the opposite effect. This article addresses some of the things that should be considered once the settlement agreement has been signed or the divorce judgment issued by the court.
The new Maine Uniform Probate Code, which went into effect on September 1, 2019, addresses the most common practical problems remaining after a couple’s divorces if no further steps are taken. Once a couple has divorced, the new statute automatically treats beneficiary designations in retirement assets and life insurance policies as if the ex-spouse (or a relative of the ex-spouse who is no longer a relative of the person) had disclaimed the asset immediately before the divorce. Any gift of property in a Will or Trust is automatically revoked, and any reference to “spouse” excludes the ex-spouse. If the couple owned property as joint tenants, the joint tenancy is severed and the couple will own the property as tenants in common, allowing each to transfer a one-half interest or to leave their one-half interest to someone else in a Will. Any designations of the ex-spouse in a fiduciary role, (i.e., trustee, agent, personal representative, conservator, guardian) are automatically revoked as well.
The Divorce Judgment can override these provisions in the statute by specifically stating a different outcome in the Judgment or Settlement Agreement.
Recommended steps are to revise any Last Will and Testament to ensure that your property goes where you want it to go and the Personal Representative named is who you want to manage your estate. Check and change all beneficiary designations in retirement assets and life insurance policies to reflect your updated first choice and contingent beneficiary. Some life insurance policies have a stated order of beneficiary in the policy if no beneficiary is named, rather than paying into your estate to pass under your will. The policy-named beneficiary may be different than what you want. Make sure your ex-spouse’s name is taken off any joint assets or joint credit accounts.
It may be that you want your ex-spouse to remain in a fiduciary role (for example, as trustee for children in common), or as beneficiary of a life insurance policy, but this is not specifically expressed in the Divorce Judgment or Settlement Agreement. In that case, you will have to sign new beneficiary designations or new documents to confirm your ex-spouse as your choice of fiduciary, that would have to be dated after the date of the Divorce Judgment and/or Settlement Agreement.
If you are happy with the result of the new probate code on your ex-spouse’s interest in your property, it is still necessary to give notice to the life insurance underwriter or the retirement asset administrator, and to confirm the severance of a joint tenancy in real estate in the Registry of Deeds of the county in which the property is located. Otherwise, you will have no recourse against the life insurance company or the administrator of the retirement assets for any payments made in contravention of the statutory effect, or against the recipient of assets transferred.
The information presented on this website is general in nature and not intended to be legal advice. No attorney-client relationship will exist with Jones, Kuriloff & Sargent, LLC unless agreed to in writing. Please contact us to discuss your particular situation.