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How to Keep Your Ex Out of Your Estate Plan
Episode 49
Divorce doesn’t just end a relationship; it leaves a tangle of legal documents, beneficiary forms, and estate planning decisions that need follow-up. In this episode, Jill answers a listener question from Amy in Tennessee, who just finalized her divorce and wants to know whether she needs to update her Will. Jill explains how Tennessee treats estate planning documents after divorce, why beneficiary designations are often the biggest risk, how ERISA complicates things, and real court cases where ex-spouses walked away with hundreds of thousands of dollars simply because the paperwork wasn't updated. She also shares practical, small-step strategies for getting started without feeling overwhelmed.
What You’ll Learn in This Episode
Understanding What Changes Automatically (and What Doesn’t)
- In Tennessee, divorce automatically cancels gifts to an ex-spouse under a Will and removes them as executor or trustee.
- But, in Tennessee, beneficiary designations on retirement accounts, life insurance, and payable-on-death bank accounts are NOT automatically revoked.
- Relying on state law or your divorce agreement is very risky. Change the forms directly.
Powers of Attorney After Divorce
- Healthcare powers of attorney naming an ex-spouse are automatically revoked by Tennessee law after divorce, but it’s still best to update the document so care providers don't have to interpret.
- Tennessee financial powers of attorney do not update automatically unless the document says so. Get them revised.
ERISA & the State Law Problem
- Some states automatically revoke beneficiary designations after divorce, but ERISA-governed accounts (like 401(k)s) preempt those state laws.
- Translation: Your ex could still get your 401(k) even if your state law automatically revokes beneficiary designations favoring an ex-spouse.
Real Cases with Real Consequences
- Estate of Birdwell: TN court ruled in favor of ex-spouse receiving ~$290,000 because the beneficiary designation was never corrected and a last-minute attempt failed.
- Manning v. Manning: TN court required the ex-spouse to follow the divorce agreement and waive rights, but the outcome might not be repeated today.
- 2017 TN case: A divorce agreement cannot revoke a retirement-plan beneficiary designation. Only the plan’s official method counts.
Divorce Agreements Don’t Save You
- Saying your ex relinquishes rights in the divorce paperwork is generally insufficient.
How to Protect Yourself (and Your Family)
- Review and change beneficiary listings on: retirement accounts (IRA, 401(k), pensions), life insurance policies, bank accounts with POD/TOD designations
- Add contingent beneficiaries.
- Keep a list and revisit it after major life events.
Resources & Links
Tennessee Advance Directive for Healthcare
Episode 38: Why You Need (or Don’t Need) a Will
Connect with Jill:
- Website: DeathReadiness.com
- Email: jill@deathreadiness.com
- Learn more about Jill’s solutions
- Subscribe to the Death Readiness Dispatch!
- Submit a question for Tuesday Triage
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Published on 1 week, 1 day ago