Archive for March, 2013

New Notice Required in Virginia Divorce Orders

Tuesday, March 5th, 2013

In a prior post here I said: Post-divorce you should review your Will and all beneficiary designations to ensure that you do not unintentionally include a gift to your former spouse. Although we strongly recommend against relying on statutes to correct your estate plan despite your own inaction, there are statutes that provide that the judgment of divorce eliminates prior bequests or certain beneficiary designation to the former spouse. See Va. Code Sec. 20-111, 20-111.1, 64.1-59; Md. Code, Estates and Trusts Article, Sec. 4-105(4); DC Code Sec. 18-109 and Estate of Roscoe H. Liles, 435 A.2d 379; 1981 D.C. App. LEXIS 355. The effect of these statutes on the treatment of a now former spouse in an estate plan is uncertain and incomplete and may be frustrated by federal law spousal protections. The savings statutes are no substitute for a careful review of estate planning documents and beneficiary designations and corrective action based on the divorce settlement or judgment.
The Virginia legislature recently ensured that the Virginia circuit courts tell all divorcing parties what we’ve been telling our clients and the readers of this blog. They added section E to Va. Code § 20-111.1. Revocation of death benefits by divorce or annulment. It provides:
… E. Every decree of annulment or divorce from the bond of matrimony entered on or after July 1, 2012, shall contain the following notice in conspicuous, bold print:

Beneficiary designations for any death benefit, as defined in subsection B of § 20-111.1 of the Code of Virginia, made payable to a former spouse may or may not be automatically revoked by operation of law upon the entry of a final decree of annulment or divorce. If a party intends to revoke any beneficiary designation made payable to a former spouse following the annulment or divorce, the party is responsible for following any and all instructions to change such beneficiary designation given by the provider of the death benefit. Otherwise, existing beneficiary designations may remain in full force and effect after the entry of a final decree of annulment or divorce.

Once you are divorced, review your beneficiary designations and your Will and make changes as necessary.

 
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