There are numerous estate planning issues that arise during a separation or divorce. There are significant consequences that may result from failing to evaluate the current status of your estate plan, especially if you are unaware of your current beneficiary designations or who you have named to act on your behalf if you were to become incapacitated, even temporarily.

1.	Durable Powers of Attorney. A Durable Power of Attorney is a document in which you name an individual to act on your behalf if you are unable to make decisions regarding your health or finances. If your divorce is not yet final, or if you have signed a Durable Power of Attorney that names your spouse to act on your behalf, do you wish to have your estranged spouse deciding what medical treatment you should have after an accident? Are you comfortable letting your spouse have access to and the ability to take assets out of your accounts while you are incapacitated? You should have separate Durable Powers of Attorney for health care decisions and for financial decisions to ensure that the person you wish to make these decisions for you is the one called upon to make them.
2.	Designation of Beneficiaries. You should review who you have designated to receive your assets when you die. Washington has a statute that automatically revokes the designation of a former spouse after dissolution. However, the revocation is not effective until the divorce is final, which can often be a quite awhile after the separation. Further, the statute is being challenged as unconstitutional, and should not be counted on to make the correct designation for you. Some designations that are often overlooked are bank accounts, retirement accounts, pension plans, health insurance, employer benefits, joint tenancy accounts, investment/brokerage accounts and insurance policies. If you do wish to have your former spouse as the beneficiary, you will need to rename him or her after your dissolution. Otherwise, the statute will revoke your designation when the divorce is final. There is ongoing litigation regarding the statute that automatically revokes a former spouse. In a recent case, the former spouse filed suit to enforce the beneficiary designation on an Individual Retirement Account. She argued that her former husband intended her to have that account, and had intentionally left her name on the designation form. The case went through trial and then to the court of appeals, costing thousands of dollars in legal fees that could have been avoided had he changed his beneficiary designation after the divorce or indicated that a divorce was pending and stating his intended beneficiary. To ensure that your money goes where you intended and to avoid wasting your estate on unnecessary litigation, you should consult a professional estate planner during your separation or dissolution proceedings.
3.	Signature Cards. Is your spouse a signer on your accounts? Unless you have a written agreement regarding your joint accounts, you should consider closing the joint accounts and opening a new account in your own name so that your estranged spouse does not have access to account numbers, bank codes and your funds.
4.	Partnerships. If you and your spouse have formed any partnerships, you should review the partnership agreement and consider whether you wish to retain an interest in the partnership. Considerations include who will be running the business, balancing the books, and making the day-to-day decisions about the business. If your name remains on a business that is being run by your spouse, you may be liable to creditors and taxing authorities for any unpaid debts or taxes of the business.
5.	Last Will and Testament. Do you have a Will? Does it name your spouse to distribute your assets? Does your Will leave your assets to your former spouse or to in-laws? As with the designation of beneficiaries, state law revokes any bequest to your former spouse after the divorce is final. However, it does not apply to other in-laws, and may not apply to the designation as Personal Representative. In addition, it would not take effect until after your final decree of dissolution. If you wish to leave your spouse in your distributive plan, you must revise your Will after the divorce or have an interim Will that includes specific language regarding the pending dissolution. You cannot make changes by writing on your original Will. By doing so, you risk voiding the entire document. If the formalities of a Will are not preserved, including having two witnesses to any modifications or codicil, among other legal requirements, the whole document could be considered revoked.

For more information on these issues or other estate planning needs, you may contact attorney Amy Jeannette (“A.J.”) Goertz at ajgoertz@aol.com or (206) 338-7792.