While caught up in divorce proceedings, it is easy to forget the importance of updating your estate plan. While it is likely that your spouse was the main beneficiary and fiduciary (person given legal responsibilities in your affairs) in your estate plan, it is unlikely you would want this to continue after the marriage ends.
For example, most people do not want their ex-spouses to inherit their property or serve as personal representatives in charge of probating their estates. They probably do not want their ex-spouses to have medical power of attorney to make medical decisions for them in case of incapacity, nor do they want them to have financial power of attorney to manage their affairs in the same circumstances.
Colorado provides a safety net with a revocation-upon-divorce law
Should someone forget or not have had time to remove their ex-spouse’s name from their estate planning documents, a state revocation-upon-divorce statute took effect in 1995 that provides a remedy. If a Coloradan executed a “governing instrument” like a will before their marriage ended in divorce (or annulment), and the will leaves property or benefits to their ex-spouse, that spousal gift is automatically revoked by operation of this law if the testator (person who made the will) dies without having cancelled it.
Another example of a potential governing instrument is a life insurance policy that designated the ex-spouse as the beneficiary of the proceeds. The statute would normally revoke this beneficiary designation.
In addition, the law revokes provisions in governing instruments that appoint or nominate an ex-spouse to a position of responsibility in the other spouse’s estate or life, including a “personal representative, executor, trustee, conservator, agent, or guardian.”
(The law also revokes these kinds of transfers or appointments to an ex-spouse’s relatives.)
The statute only applies in divorce or annulment, not in legal separation or any other change in relationship status. Revocation only applies to the spousal transfer or appointment and does not nullify the document as a whole – the will or other instrument remains valid in all other provisions.
It can be complicated to determine whether a document is a governing instrument for this purpose. The test is whether the divorced person would have had the sole power to cancel the spousal gift or nomination in the document at the time of divorce. The automatic revocation also does not apply if expressly forbidden by the terms of the instrument, a court order or a marital settlement agreement.
Property ownership title changes
Finally, the law converts the title to real estate that ex-spouses own together as joint tenants with the right of survivorship. This type of title – joint tenancy – means that each of the two owners own the entire parcel and ownership of the entire property transfers to the surviving owner when one dies.
Reflecting the goals of the revocation-upon-divorce law, it automatically transforms the joint tenancy upon divorce into a tenancy in common, meaning that each ex-spouse would instead own one-half interest in the property, so that when one dies, only half of the interest would go to the survivor and the other half to the deceased ex-spouse’s heirs.
Seek legal advice
The operation of Colorado’s revocation-upon-divorce statute recognizes the changes in legal and personal relationships that divorce represents. It prevents wrongful enrichment of an ex or involvement of the ex in the other ex-spouse’s personal and financial life when it almost certainly would not be wanted.
A Colorado attorney can answer questions about this law and help make changes to an estate plan when someone anticipates or has gone through divorce.