There’s no doubt that a divorce is stressful. Sometimes the stress can impact a person’s health in unimaginable ways – even the very real possibility of death. I recently received a somewhat panicked phone call from one of my clients who informed me he was having a triple bypass surgery in a few days. This was my second client within two years that has had to undergo emergency bypass surgery. Both of my clients were experiencing slight breathing problems, but other than that, did not have any other major symptoms. Both went to see their doctors for a routine checkup. Both had no clue their hearts were blocked; one had 95% blockage and the other learned he had a 98% blockage. Amazingly, they were both still walking around and living their lives.
I Don’t Want My Soon-To-Be Ex to Inherit My Fortune
My clients were both in the middle of very adversarial divorces and living separate from their wives. The dissolution proceeding had been going on for over a year. They could not imagine dying before the dissolution action was finalized and having their spouses inherit the entire marital estate especially the person with whom they have been in an adversarial proceeding with for over a year. There was no love; not even lukewarm feelings between my clients and their spouses. Naturally, they wanted to know their options to ensure that they could leave their share of the marital estate to their chosen beneficiaries (children) instead of their soon to be ex-wife should they not survive surgery or die from complications while recovering from surgery. Unfortunately, the options available during the divorce proceeding are limited.
But What If I Die Before the Final Divorce Decree?
If a party dies during a divorce proceeding, the legal action terminates at the same time. In other words, if my client were to die during the divorce proceeding, the dissolution action would terminate and his spouse would receive the marital estate subject to probate. However, if the Court dissolved the marriage prior to the death, then the divorce proceeding could continue with a personal representative standing in the shoes of the deceased ex-spouse. And, the division of the marital assets and debts would be divided. Once the marital assets and debts are divided, the deceased ex-spouse’s share could be passed onto his intended beneficiaries. In most cases, the opposing party will not agree to dissolve the marriage for the obvious reason; they would receive the entire marital estate. Furthermore, the Summons prohibits either party from changing beneficiaries on insurance policies, retirement accounts or other assets during the divorce proceeding. The only option when faced with this dilemma is to file a motion and request the Court to dissolve the marriage. However, the Courts are very reluctant to grant the requested relief.
Pre-Divorce Preparation Makes All the Difference
Therefore, planning for possible death prior to a divorce may be the better alternative. As stated above, once a divorce has commenced, a party cannot change beneficiaries. However, this does not prohibit a party from changing beneficiaries prior to commencement of a divorce. However, this can be tricky because if it is accomplished too close to the commencement of the divorce, a party’s spouse could argue that the party was transferring assets. And, most likely, a spouse will have to agree to the change of the beneficiary. Yet, if transferring the beneficiaries is a part of a wider estate plan, it may be possible to accomplish. It would be wise to name both the spouse and children as equal beneficiaries. It is not only changing the beneficiaries that must be addressed, but also changing the will, trust, healthcare directive and power of attorney – all equally important. My client did not want his soon-to be ex-wife to make medical decisions on his behalf should he become unable to make them. He also did not want her to have any financial power should he become incapacitated. I don’t imagine he is unique in his feelings.
Taking Care of Business: The Importance of a Partnership Agreement
Another important issue my client faced was what would happen to his business should he pass away prior during the divorce proceeding. He and his partner did not have a buy-sell agreement or a provision addressing the death of either partner. Unfortunately, we did not have time to remedy his partnership agreement to address this important issue. We just had to hope he made it through surgery without any complications.
This was a stark reminder of how important it is for business owners to review the partnership agreement prior to commencement of a divorce to ensure it has all of the important provisions such as death clause and buy-sell provision to avoid any unintended complications.
Before You Divorce
In summary, I would suggest meeting with an estate planning attorney and a business attorney if you own a business to review or modify any existing documents or to create new documents prior to the commencement of a divorce proceeding. That way, you will avoid any unintended consequences of a possible death during a dissolution action.
I am happy to say my client came out of surgery and is recovering and the other client has fully recovered living a stress free life now that his divorce has been finalized.