Ex-Wife Not Entitled to Life Insurance Proceeds of Deceased Former Husband

estate lawyer in New YorkIn a case in Erie County, New York, before Surrogate Barbara Howe, an estate sought to have the decedent’s ex-wife turn over the life insurance proceeds to the estate which she had received as a result of decedent’s death. In this case, the decedent left his entire estate to one of his sisters. She brought an application to the Surrogate’s Court to force the ex-wife, to turn over to the estate all of the funds she received as the beneficiary of the decedent’s life insurance policies. The ex-wife, through her attorneys, claimed she was entitled to the benefits as the decedent made an affirmative choice not to remove her as the beneficiary.

The decedent’s sister asserted that the ex-wife’s legal basis to receive the life insurance proceeds was terminated upon entry of a judgement of divorce in the County Clerk’s office. The court referred to Section 5-1.4 of the Estate, Powers and Trusts Law and the legislative history with regard to the enactment of this section of the EPTL. Surrogate Barbara Howe found that for an ex-wife to inherit she must prove the decedent took affirmative action after the divorce to ensure the ex-spouse would retain her status as the beneficiary on the pre-divorce life insurance policy. In this case, the decedent did not do so. Therefore the pre-divorce beneficiary designation was ruled a nullity. Judge Howe in her decision went on to state the ex-wife did not meet the standard under EPTL 5-1.4 with regard to the ex-spouse taking action after the divorce to reinstate her as the beneficiary. Judge Howe found the ex-wife had been bought out of the life insurance policy during the divorce case and she no longer had any marital interest in the life insurance policy. The policy was decedent’s separate property. Surrogate Howe ordered the ex-wife to repay the estate the full amount of the life insurance proceeds she had received.

Conclusion

To be safe, if you are getting divorced, remove your ex-spouse as beneficiary on all financial documents, deeds, bank accounts, securities accounts and all other financial instruments of every type and nature.estate planning attorney on Long Island

Divorce’s Impact on Wills and Other Testamentary Devices

Let’s say you get divorced but you don’t modify your will or change your bank accounts. What happens at the time of your death if your ex-wife is the beneficiary of your will and other assets are held jointly with your ex-wife?

New York State Law

Under New York State Estate Powers and Trusts Law Section 5-1.4, unless a will expressly states otherwise, divorce, judicial separation or annulment of a marriage revokes all dispositions or appointments of property made by the divorced spouse to a former spouse. Your former spouse would be treated as if he or she died before you. This means that any clause which would have named your former spouse as a beneficiary under you Will is revoked.

In addition, if you are divorced, your ex-spouse also loses his or her rights to inherit from your bank accounts, life insurance policies, revokable trusts, and real estate interests involving joint tenancies.

Housekeeping Needed After Your Divorce

If you get divorced, it is important to go through all of your financial documents and records. Your ex-spouse’s name should be removed from being a beneficiary on your life insurance. You should also notify your health insurance carrier that he or she is no longer married to you. In addition, you should remove your spouse’s name from your bank accounts, securities accounts, and financial accounts of every type and nature. If you have a Will, you should meet with the attorney who drafted the Will and draft a new Will.

Between the attorneys fees involved in the divorce, the child support, spousal maintenance, and division of assets pursuant to the terms of the divorce, your net worth will be diminished. You should carefully review all of your financial assets to make sure that upon your death, your ex-wife will not be in a position to seek to try to inherit and possibly cause litigation. Even though if you don’t disinherit her, the statutes in New York cause her to be disinherited, it is still better to change the documents to avoid the potential complications and legal expenses.estate planning attorney

Collecting Social Security Benefits

To watch today’s video blog, please click on the link below:

https://youtu.be/WO8rHMNlcoo

Elliot Schlissel is a member of the National Academy of Elder Law Attorneys. He can be reached for a free consultation at 1-800-344-6431, 516-561-6645 or 718-350-2802.

Divorce Then Death

estate attorneys on long islandSurrogate Robert Gigante sitting in the Surrogate’s Court of Richmond County, New York, recently had an unusual case come before him. A husband and wife had been involved in a divorce lawsuit in the Supreme Court. The parties had entered into a stipulation of settlement. The stipulation provided that both parties released and discharged their respective claims in each other’s estates and agreed to the distribution of real property owned by them. During the course of the Supreme Court divorce proceeding, the judge before whom the case was presented, ordered the wife was granted a judgment of divorce. The judge then directed the wife’s attorney to settle the judgment of divorce within sixty days or the divorce lawsuit would be deemed abandoned. Unfortunately, the wife died. Her attorney did not submit the judgment of divorce within the 60 day period pursuant to the judge’s instruction. The divorce was therefore deemed abandoned.

Probate Proceeding

A probate proceeding was initiated. The wife’s husband brought an application in the probate proceeding before Surrogate Gigante to have his rights determined. His position was the stipulation of settlement was not valid because the divorce proceeding was abandoned.

The wife’s sister brought an application to cause the Surrogate’s Court to enforce the terms of the stipulation of settlement. The stipulation had been signed by both parties prior to the wife’s death. The three children of the marriage also supported the sister with regard to her application to the Surrogate. Surrogate Gigante in his decision stated he could not render a decision on motions for summary judgment regarding these issues. (Each party had brought a motion for summary judgment claiming there was no issue of fact with regard to their being completely correct in their position).

Can the Stipulation in the Divorce Case Survive the
Abandonment of the Divorce Lawsuit?

Surrogate Gigante indicated in his decision issues of fact existed and there was a question whether the stipulation of settlement in the divorce case survived the “abandonment” of the divorce lawsuit. He questioned whether only a portion of the divorce action had been abandoned. He also raised the issue the husband could have been found to have ratified the stipulation of settlement by complying with its terms. Based on the aforementioned, Judge Gigante held this case would have to move towards a trial with regard to the various issues presented.estate planning and litigation assistance

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