Many individuals expect that getting married or divorced automatically updates all of their legal responsibilities to their new or former spouse. However, while filing a marriage certificate or divorce papers is a step in the right direction, there are many complexities that do not get resolved merely by filing such paperwork with the court. Due to the lag time it may take some backlogged court systems to process the paperwork and the fact that state law default provisions vary greatly by state, keeping your entire legacy plan updated is important. However, if you are not ready to engage in a complete re-work of your legacy plan, then at a minimum, your health care agent and beneficiary designations should be reviewed.
Health Care Agents under a Medical Durable Power of Attorney
Although some states have default statutes that establish a hierarchy for naming a health care agent if an individual becomes incapacitated and has no advance medical directive in place, why leave this important decision to state law? In Maryland, for example, the default health care agent is first the individual’s guardian (if applicable), followed by the individual’s spouse, adult child, parent, and an adult sibling, in that order. Even if this line-up reflects your wishes, keep in mind that not all states have adopted such statutes, leaving the court as the only (and expensive!) option for establishing a health care agent in the absence of an advance medical directive. Even if you have an advance medical directive but your document names your spouse as your agent, upon filing for divorce you run the risk of having your estranged spouse make life and death decisions on your behalf should you enter a comatose state or become incapacitated before the divorce becomes final.
Durable Power of Attorney for Financial Management
The situation is slightly different for powers of attorney. Under the 2006 Uniform Power of Attorney Act, the authority of an agent is revoked when the agent is a spouse of the principal and an action is commenced to dissolve the marriage. However, less than half of U.S. states have enacted this Act, which means that in the majority of the country a spouse’s authority under a power of attorney remains valid during the period before a divorce becomes final.
Similarly, beneficiary designations for life insurance policies and retirement accounts do not automatically update upon a change in an individual’s marital status. Unless the beneficiary designation is changed by the individual account holder, upon their passing the associated assets would be paid to someone other than the individual’s preferred beneficiary due to the life change.
Regardless of which state you live in, proactively updating your legacy plan and your health care agent and beneficiary designations upon getting married or divorced will help eliminate the potential for confusion and conflict, while ensuring that your wishes are carried out by someone you trust at that point in your life. You should also consider sharing your advance medical directive with the agents you name in the document and giving a copy of it to your primary physician to be kept in your medical record.