Divorce is an emotional and life‑altering
event, and it can be tempting to postpone the paperwork that comes with it.
However, updating your estate plan and other essential documents is a critical
part of regaining control of your legacy, even during this overwhelming time.
This article outlines several key considerations that are often overlooked
during the legal process.
Wills
Under Georgia law, once a divorce
or annulment is finalized, any provisions in your will benefitting your former
spouse are automatically revoked. Legally, your ex‑spouse is treated as if they
predeceased you, preventing them from inheriting under your will.
It is best practice to review your
choice of executors and create a new will to ensure only trusted individuals or
institutions are included.
Revocable living trust
If your estate plan was
originally structured with your former spouse, especially if you created a
joint trust, it is crucial to update it after your divorce. Once the divorce is
finalized, you should establish and fund a new individual trust or restate your
existing one. You may need to revise beneficiaries, distribution terms,
trustees, and executors so that they reflect your current intentions. Updating
these documents allows you to control who receives your assets and allows you
to exclude your former spouse and former relatives from being included in your
estate plan.
Beneficiaries
Unlike many states, Georgia does
not automatically revoke beneficiary designations after divorce. To ensure your
assets go to the right individuals, be sure to update beneficiary designations
on:
- Life insurance policies
- Retirement accounts, such as 401(k)s, IRAs, pensions, etc.
- Investment accounts
- Bank accounts with payable-on-death or transfer-on-death designations
Powers of Attorney & Health Care Directives
A Power of Attorney (POA) is a
formal document that grants an individual the authority to manage legal,
financial, or medical matters if you become unable to do so. In Georgia, upon
divorce or legal separation, if your former spouse is the only individual named
in this document, the POA becomes non-functional. Even though the document
technically still exists, your former spouse's authority automatically
terminates unless the POA expressly states otherwise.
A similar issue arises with
Georgia Advance Directives for Health Care. Divorce or annulment automatically
revokes the former spouse's authority to act as health care agent unless the
directive expressly provides otherwise. If no successor agent is named, there
is effectively no one authorized to make medical decisions on your behalf. In
that situation, health care providers must rely on Georgia's default surrogate
decision‑making rules, typically involving close family members, or, in some
cases, a court‑appointed guardian to make critical medical decisions, including
decisions related to life support, resuscitation, or other emergency treatment.
To ensure these documents
function as intended, it is important to name at least one successor agent and
to update Powers of Attorney and Advance Directives promptly following a
divorce or major life change.
Health Insurance
Portability and Accountability Act (HIPAA)
With respect to medical matters, it
is also important to review the individuals you allow to access your medical
records and all health information protected under HIPAA. If these designations
are not updated, your former spouse may still be able to receive and discuss
your medical information with healthcare providers.
Digital assets
In today's digital environment,
it is equally important to remove your former spouse from any digital accounts.
This includes updating usernames and passwords for accounts they previously
accessed and adjusting privacy settings on social media platforms to limit
their ability to view personal information, if desired.
Business Interests
For business owners, it is
important to review succession plans, operating agreements, shareholder
agreements, or buy-sell provisions. Divorce settlements may involve
transferring business interests, which could possibly trigger tax consequences.
It is important to consider both estate and tax implications when businesses
interests are involved.
Final Thoughts
Divorce impacts many aspects of
your life, and handling each document individually can feel overwhelming. In
Georgia, automatic revocation only applies to your will, POAs and Advance
Directive for Health Care; all other documents require proactive updates to
align with your wishes.
With professional guidance, you
can ensure all necessary updates are completed and that your personal and
financial matters remain fully protected. Please feel free to contact any
member of our Estate and Trust Industry Practice for guidance.
