It is not uncommon for individuals to list their spouse as the Personal Representative (the individual appointed by the court to administer the estate), Power of Attorney (the individual or individuals designated to make decisions on his/her behalf) or beneficiary of his/her estate plan. Following a divorce, it is doubtful that you want your ex-spouse to remain in those roles.
How Colorado Law Helps
In some cases, individuals overlook or lack the time to change their estate planning documents. To help address the effect of an individual being unable or having overlooked removing an Ex-Spouse from a will or other “governing documents”, Colorado legislature passed what is known as a “revocation upon divorce law”.
A governing instrument includes a deed, will, trust, insurance or annuity policy, multiple-party account, security registered in beneficiary form (TOD), pension, profit sharing, retirement or similar benefit plan, instrument creating or exercising a power of appointment or power of attorney, or a donative, appointive or nominative instrument of any type.
The revocation upon divorce law only applies to those governing instruments that are revocable, or ones under which the divorced individual, at the time of the divorce or annulment, had the sole authority to cancel the designation to his or her former spouse or former spouse’s relative. Additionally, the automatic revocation does not apply if a contract related to the marital settlement agreement, court order, or the governing instrument expressly forbids the revocation.
The revocation upon divorce law provides that if a Colorado resident executed a governing instrument prior to a divorce or annulment that provided a benefit to the former spouse or relatives of the former spouse, the divorce or annulment automatically revokes a (1) disposition or appointment of property made by the divorced individual to a former spouse or former spouse’s relative; (2) a power of appointment on the former spouse or former spouse’s relative; and (3) nomination of the former spouse or former spouse’s relative to serve in any fiduciary or representative capacity.
Any revocation pursuant to the statute only applies to the spousal transfer or appointment; all other provisions in the governing instrument remains valid. The law can also affect the property interests of former spouses.
Exceptions to the Revocation Upon Divorce Law
The federal Employment Retirement Income Security Act (“ERISA”) supersedes the revocation upon divorce law. As a result, any insurance plan, pension plan, disability insurance, life insurance, accidental death and dismemberment insurance and employer-sponsored benefits governed by ERISA are not revoked by the revocation upon divorce law. The last-named beneficiary will receive the benefits regardless of whether the beneficiary is still married to decedent.
Importance of Estate Planning After a Divorce
Although Colorado Law provides a safety net, it is recommended that you amend your estate planning following a divorce to ensure that your plan reflects your wishes of who should in inherit your property. Our knowledgeable and experienced Estate Law attorneys at Jorgensen, Brownell & Pepin, P.C. can assist you with your estate planning and elder law needs. If you have any questions, please contact our office today.