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The divorce decree is signed. The accounts are split, the house is sold or refinanced, the custody schedule is set. It feels finished.
Your estate plan is not finished. In most cases it has not been touched at all, which means it still reflects decisions you made when you were married — including who inherits from you and who speaks for you if you cannot speak for yourself.
It’s kind of like ripping something that’s a whole thing into parts, right? And now we have to rethink about everything. Things that we just thought we knew how our decisions would go, all of a sudden we have to rethink.
Here is what actually has to be rethought, starting with the one that costs the most to get wrong.
The Beneficiary Form That Overrides Your Divorce
This is the single most expensive mistake divorced people make, and it is entirely mechanical.
Employer-sponsored retirement plans — a 401(k), a pension, group life insurance through work — are governed by federal law. Under ERISA, the plan administrator pays the person named on the beneficiary form. Not the person your divorce decree says should get it. Not the person your new will names. The person on the form.
If your ex-spouse is still on that form, your ex-spouse gets the money. A state law that purports to revoke an ex-spouse’s designation generally cannot override the federal rule for an ERISA plan. A settlement agreement saying they waived their interest may give your estate a claim to pursue afterward — expensively, and not always successfully — but the plan will already have paid out.
The fix takes twenty minutes. Request a change-of-beneficiary form from every plan administrator, name your new primary and contingent beneficiaries, submit it, and get written confirmation that it was recorded. Then do the same for IRAs, individual life insurance, annuities, and payable-on-death bank and brokerage accounts.
Do this before you do anything else in this article.
Your Powers of Attorney May Still Name Your Ex
Some states automatically revoke a spouse’s authority as agent on divorce. Some revoke it on filing. Some do not revoke it at all, and some only address certain document types.
Do not research which one you live in and rely on the answer. Execute fresh documents. A new durable financial power of attorney and a new healthcare power of attorney, naming agents you would choose today, with named backups. Then destroy the old originals and tell the institutions holding copies.
An ex-spouse who still holds your healthcare power of attorney is not a theoretical problem. It is the person a hospital will call.
Your Settlement Sets the Boundaries
Your new plan has to operate inside what the court already ordered.
In divorce settlements, there are some things that legally you have to do. Sometimes the judge will say you have to carry a life insurance policy on each other to make sure there is money to continue raising your children. Or when you die, half of your investment accounts or retirement accounts automatically go to your spouse because you agreed in your settlement that they didn’t have to be liquidated then. There’s a lot of factors that are involved that come down to how your divorce settlement was agreed on. So you have to take all of that into consideration…
Common obligations that survive the decree: maintaining a life insurance policy to secure child support or alimony, preserving a share of a retirement account, keeping a property until a child reaches a certain age.
These are court orders. Writing a will that ignores them does not cancel them — it creates a claim against your estate.
There is a workable middle path on the insurance requirement. Naming your ex-spouse directly as beneficiary hands them a lump sum with no strings, which may be far more than the remaining support obligation. Naming someone else may breach the order. An attorney can often structure a trust as beneficiary that satisfies the court’s purpose — the money is available for the children’s support — while directing anything left over where you want it to go. Bring the settlement agreement to that conversation.
Protecting Your Children Without Handing Control to Your Ex
Here is the default nobody expects. If you die and assets pass to your minor children, somebody has to manage that money until they are adults. If you have not named anyone, that person is very likely their surviving legal parent — your ex-spouse.
Renee frames the decision honestly rather than assuming the worst:
Should your assets still go to your ex-spouse? Well, it all depends. Is that ex-spouse going to be raising your children? Does that money need to be available to them to supplement losing the income because of your death? … Or should it be a sibling or a parent that would manage your money to help if your children… would help them have what they need to raise your children without the money actually being in their name? Okay, so there’s that consideration as well.
That is the right question. Your children will be living in your ex-spouse’s household, and money will genuinely be needed there — your income just disappeared from their lives. The issue is not whether the funds should be available. It is whether the funds should be owned by your ex-spouse.
A revocable living trust separates those. The trust holds the money. A trustee you choose — your sibling, a parent, or a professional trust company — releases funds for housing, school, medical care, and activities according to instructions you wrote. Your children get supported. Your ex-spouse gets cooperation rather than a balance to spend. And whatever remains goes where you said when your children come of age, not into your ex-spouse’s estate.
You Can Disinherit Anyone
Should we put in mechanisms to sometimes disinherit the spouse? There in all estate planning documents, there is the ability to disinherit people. What does that mean? It means they don’t get to participate in anything you had. You can legally disinherit anybody. Some people think I can only disinherit my own kids or my current spouse. You can disinherit anybody… and by doing so, you’re calling that ex-spouse out… And you would say, I don’t want John to be able to come back against my estate for anything. So I am purposely saying that I am disinheriting him. I am giving him $5, $10, $1, whatever on purpose and disinheriting him from any access to any of my estate in the future.
Naming the person explicitly matters. Silence can be argued as oversight — that you simply forgot to update the document. Naming them and stating the intent removes that argument. The token dollar is a traditional device showing the omission was deliberate, not accidental.
And the document you put it in determines how well it holds:
When you disinherit somebody in a will, they can still contest that. They can go to the judge and say, I disagree with that and here’s why. And depending on their argument, the judge may give in or not. In a trust, it’s very different. If somebody that you disinherit tries to contest your trust, most trust language, if they’re drafted right, if they’re set up properly, the language will be there that says if you contest this trust, you forfeit whatever it was you were trying to gain just by nature of contesting it. So why would somebody spend time, energy, and money to go after something that they’re going to not get anyway? So that’s the beauty of being able to disinherit.
A will goes through probate, which is a court proceeding already open and available to anyone who wants to object. A trust is private, and a properly drafted no-contest clause means that challenging it forfeits whatever the challenger might otherwise have received. The economics stop most challenges before they start. Enforceability of no-contest clauses varies by state, so ask your attorney how yours are treated where you live.
If You Remarry
Now, if you get remarried, then that divorced person, that divorced situation becomes more of an issue. We need to speak to that as well. We need to know what assets were joint in that divorce that might need to be treated differently than assets that you’re going to accumulate together with your new spouse. So divorce into remarriage is another category.
Remarriage layers a second set of obligations on top of the first. Assets that came out of the divorce, support obligations that continue, children from the first marriage, and property you build with a new spouse all need to be distinguished. This is where a prenuptial agreement and a carefully structured trust do real work, and where a generic plan causes the most damage.
The Order to Do This In
- Change every beneficiary designation. Retirement plans first, then insurance, then bank and brokerage accounts. Get written confirmation.
- Execute new powers of attorney, financial and healthcare, with backups.
- Give your estate attorney the full divorce settlement before they draft anything.
- Set up a trust with an independent trustee if you have minor children, so support flows without ownership transferring.
- Disinherit your ex-spouse explicitly, by name, in a trust with a no-contest clause.
- Revisit all of it if you remarry.
The decree ended the marriage. It did not update your paperwork. That part is yours.
This article is for educational purposes only and does not constitute legal, tax, or financial advice. The effect of divorce on existing estate planning documents, the enforceability of no-contest clauses, and the interaction between state law, federal ERISA rules, and a divorce decree vary by state and by plan. Consult a licensed estate planning attorney in your state and provide them with your full divorce settlement.
About the instructor: Renee Parris is an estate planning educator with over 30 years of experience. This article is a companion piece to Renee’s course, Estate Planning, Simplified.
