New York Divorce Attorney On Changing Beneficiary StatusOne of the biggest myths in the divorce process is that the divorce decree automatically changes the beneficiary status on your pension, 401(k), bank accounts, will and any estate planning matter. Nothing could be further from the truth, says one veteran New York divorce attorney, who told us that changing beneficiary status if often completely overlooked in the process.
Estate planning issues & divorce
How does a divorce affect wills, trusts and estate planning issues? That's the question we asked Elliot Schlissel, a New York Attorney whose practice area includes divorce, estate planning and many others. Here's what he told us:
Most married people name their spouse as the primary beneficiary on their pensions, their 401Ks, their bank accounts or in their wills. After getting divorced, one must change the beneficiary designations on all of those items. If you dont change your will, if you dont change your beneficiary on your 401K or your pension, then your ex-spouse may receive those assets even if you die 20 years later.
The divorce does not automatically change the beneficiary designations or inheritance rights on those items. Weve seen situations where people have been divorced for 15 or 20 years and then one party dies and their divorced spouse inherits from them.
Why estate planning should be part of a divorce
Schlissel says that so many people simply don't understand that estate planning issues need to be addressed after a divorce. However, his firm feels that these issues are too important to ignore. He explained:
We always offer to redo our clients' wills at the end of the divorce or prepare a will, very often at no charge, because we feel its that important. People are generally so happy for the divorce to be over, to get over the sometimes emotionally gut-wrenching proceedings, that they just forget about it, move on with their lives and dont deal with these post-divorce issues. We do everything we can to educate our clients about these potential problems.