Background: Designating Beneficiaries & Appointing Fiduciaries

Executing a last will & testament, power of attorney, and health care proxy are important estate planning tools and this basic plan can be expanded to include designating beneficiaries on life insurance policies, bank accounts, and other assets. Simply having a named beneficiary on a life insurance policy, for instance, makes that asset a “ non-probate” asset, meaning the asset transfers automatically to the beneficiary outside of any estate proceeding. On the other hand, if that same life insurance policy had no beneficiary, then the proceeds would flow into the estate and be subject to an estate proceeding in Surrogate’s Court. Another example is a savings account. With a named beneficiary, the savings account transfers automatically to the named beneficiary upon the death of the account owner. The beneficiary would only need to comply with the rules of the bank or institution holding the account (e.g. provide a copy of the death certificate and identification of the beneficiary). On the other hand, if that same savings account had no named beneficiary, then the funds would become part of the estate and be subject to the administration of the estate, which could take a significant amount of time (months or perhaps years in the case of a contest). An equally important task in the estate planning process is the appointment of fiduciaries. A fiduciary is a trusted person who is appointed to a position where she is legally bound to act on behalf of another in good faith. Common fiduciary roles include the executor of a last will & testament, trustee of a trust, health care agent, guardian, and agent under a power of attorney (also known as an attorney in fact). Your fiduciaries play crucial roles because they have broad powers over your financial and health care decisions.

Effect of Divorce on Designated Beneficiaries & Nominated Fiduciaries

The effects a divorce can have on your estate plan can be easily overlooked when dealing with the many issues surrounding divorce. Under New York law, a divorce or a judicial separation revokes revocable dispositions of property made to your then-spouse. This may include, but is not limited to, dispositions in a last will & testament and designations as beneficiary on a bank account, life insurance policy, pension, or revocable trust. It is important to note that not all states have adopted similar laws. In New York, the key characteristic is revocability of the instrument. This means that if the decedent could have revoked the instrument during her life, then divorce will likely nullify the provisions concerning the ex-spouse. A divorce or judicial separation also revokes appointments of your ex-spouse in estate planning documents such as appointments of executor, trustee, guardian, health care agent, or attorney-in-fact. The effect of revocation will likely have a large impact on the estate since the ex-spouse will be considered to have predeceased you. For example, if your ex-spouse was named as beneficiary in your last will and testament and you failed to change the will before your death, your ex-spouse would be treated as having predeceased you and receive nothing; therefore, your assets that were directed to go to your spouse would instead go to the alternate beneficiaries named in your will – this is one reason why giving careful consideration to your alternate beneficiaries is very important. Similarly, if you name your spouse as your executor under your will but that provision is revoked by divorce or judicial separation, then your now ex-spouse will be unable to serve; your alternate agent will have to step up to fill the role.  Revocation of provisions regarding ex-spouses are appropriate in many cases. It is natural to think that if you divorce your spouse, you no longer want the spouse to be entitled to your assets upon death. However, this is not always the case. In some situations, spouses separate on amicable terms and intentionally leave each other as beneficiaries for the purpose of care and support of the surviving ex-spouse. In other cases, this is done for the benefit of minor children. However, this intent might not be realized under the structure of New York estate law. In such cases, it is extremely important to consult a New York estate planning attorney to make sure your intentions are realized.


There are exceptions to this general rule of revocation. Here are two examples:

  • A divorce decree or separation agreement that requires you to maintain certain benefits for your ex-spouse will control.
  • Similarly, if you designate your ex-spouse as a beneficiary after your divorce and demonstrate a clear intent that the ex-spouse remain as beneficiary, then the ex-spouse may still be entitled to inherit.

Each situation is unique and there may be other exceptions that will apply to you. Therefore, it is important to consult with an estate planning attorney in order to evaluate and possibly re-evaluate the potential impacts of a divorce on your estate planning strategy. 

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Daniel R. Antonelli
Representing trust & estate clients with an emphasis on estate litigation in the New York City Metro Area.