Maria Shriver and Arnold Schwarzenegger’s announcement this week that they will separate reminded me of the various ways divorce affects a person’s estate planning.
In this post, I’ll stick to what happens in Pennsylvania. Since laws vary from state to state on this matter, you always need to see what the law provides in your jurisdiction.
So if Maria Shriver were a Pennsylvania resident, here is how I would advise her:
A number of changes take place automatically when a person divorces. It’s important to know what those are, and of course it’s best to consider updating your estate plan after any major change such as marriage, divorce, death in the family, and so on.
Without knowing what’s in your will, let me tell you generally what happens.
Unless you clearly provide otherwise, divorce automatically revokes a number of aspects of your estate plan, including any provisions of your will favoring Arnold, the designation of Arnold as your agent under power of attorney and health care agent, and beneficiary designations favoring Arnold. I’ll go through them one at a time.
Will – A divorce or (in some cases) pending divorce renders ineffective any provision of your will that favors, or even “relates to,” Arnold. A clause that gives him your entire estate is an example of a provision favoring Arnold. A provision “relating to” Arnold could include one naming him as the executor of your estate.
If you die while the divorce is pending, do those automatic changes take effect? That depends on how far along the divorce proceedings are. There are several different ways of getting divorced in Pennsylvania, and under each method, there is a different way that “grounds” for divorce are established. Once grounds are established under the Domestic Relations law, the automatic will changes take effect, but not until then. (You would also have to be “domiciled” in Pennsylvania at the time of death, meaning that you resided here with an intent to remain.)
Power of attorney (POA) – If you named Arnold as your “agent” (the person who would act –no pun intended—for you) in your POA, that part of your POA will be revoked. But the timing is different from what happens under your will. The POA change takes place as soon as either you or Arnold files for divorce.
Filing for divorce won’t nullify your POA entirely. If you named a successor agent after Arnold (always a good practice), then that person could act as your agent and the rest of your POA remains intact.
The Official Comment to this part of the POA statute notes that filing a divorce action would not affect a provision in your POA nominating a spouse to serve as a guardian. In the unlikely event a court would find that you need a guardian, and your POA nominated Arnold for that purpose, the court would need to consider whether the filing of a divorce action is good cause not to appoint Arnold as your guardian.
Health care POA – If you have a health care power of attorney, as part of an advance health care directive or separately, a designation of Arnold as your health care agent would be revoked as soon as either you or Arnold files for divorce.
Beneficiary designations – You may have named Arnold as beneficiary of a life insurance policy, annuity contract, pension or profit-sharing plan, or some similar contractual arrangement.
If you die, and you have such a beneficiary designation that you could have revoked, it will become ineffective in the same way as a will provision. That is, it would be ineffective if you were divorced when you died, or if grounds for divorce were established.
This same rule applies to any “conveyance which was revocable at the time of the conveyor’s death and which was to take effect at or after the conveyor’s death.” Certain deed provisions would fit this description.
When a beneficiary designation is ineffective, it would be as if Arnold died before you did. If you named a successor beneficiary, that is who would get the benefits.
If you have provided differently – Keep in mind that these changes won’t occur if your documents show that you wanted to keep provisions relating to Arnold even if you were to divorce. A beneficiary designation could also survive depending on the wording of the designation, a court order, or a written contract between you and Arnold.
But if you did not provide differently, some of your estate planning provisions could end up being, well, terminated.
Your friendly elder law attorney.