Death & Divorce
Divorce Case Not Finished
If one spouse dies while the divorce case is pending, then the divorce still proceeds under New Mexico law. The Personal Representative (Executor) of the spouse’s estate gets substituted into the divorce proceedings. The divorce court first determines what is community or separate property / debts, whether alimony is awarded, etc. Once the deceased spouse’s share of the marital assets is decided, then the deceased spouse’s estate is administered under the terms of the Will and Trust or by the laws of intestacy (when you die without a Will). Note that the ex-spouse-to-be cannot be appointed as the Personal Representative of the deceased spouse while the divorce is pending because there is an inherit conflict of interest.
Divorce is Done
Please, please, please update your Will, Revocable Trust, Powers of Attorney, beneficiary designations of life insurance policies, retirement benefits, and other financial accounts, and titles or deeds to property shortly after your Final Decree of Dissolution of Marriage. By law in New Mexico, a divorce terminates the right of a former spouse –
- to inherit under the Will
- to serve as an executor or trustee under the Will
- to receive property by devise or bequest under the Will
However, you still need to change the beneficiary of your life insurance and certain other investment accounts if you don’t want your ex-spouse to get the proceeds. For example, John worked for the federal government and had a life insurance policy as part of his employee benefits package. He named his first wife, Mary, as the beneficiary of that life insurance policy. John and Mary get divorced, and five years later John dies. Mary gets the life insurance proceeds if John did not change the beneficiary after the divorce, even if John had re-married.
Also, do NOT name minor children as the beneficiaries of your life insurance or other investment accounts. You have to name a trust as the beneficiary because minors cannot inherit directly. That means you have to create a trust – either in your Will or separate from your Will – for the benefit of the children.
Changing Beneficiary Designations
Certain kinds of personal property have designations of who gets it when you die. Promptly after your divorce, change the beneficiary designations of the following –
- Retirement plans (401k, 403b, IRA, pensions)
- Life insurance
- Long-term care insurance
- Transfer on Death (TOD) and Payable on Death (POD) accounts
- Investment accounts
- Stock options
- Real Property
If you owned real property (house or land) as husband and wife (joint tenants with right of survivorship), then the ownership status changes to tenants-in-common once the divorce is finished. That means if one spouse dies before changing the deed to show only one spouse owns the property, then the deceased ex-spouse share automatically passes to his / her heirs rather than to the former spouse. For example, John and Mary owned a house while married, and they got divorced in May. Mary was awarded the house in the divorce decree but the deed to the house was not changed. In August, John gets married to Betty and he dies on his honeymoon before making a new Will. Betty is now John’s heir. This means Mary and Betty both own the house as tenants-in-common. This isn’t what John and Mary intended in their divorce. If you think the divorce case was ugly between John and Mary, wait to see how ugly the probate fight between Mary and Betty will become.
Guardianship of Children
If you have minor children and you named a legal guardian for the children in your Will, then do a new Will after the divorce if you don’t want your ex-spouse to be the guardian. Understand that the surviving parent usually gets custody of the children despite a guardian being named in a Will; however, if there are specific reasons why you believe your ex-spouse is not capable of raising the children safely and properly, then put those reasons in the new Will. The probate judge will review your reasons and take them into account if there is a dispute over who will be appointed the children’s guardian. For example, John and Mary were married and had one child, Bill. The couple got divorced when Bill was one year old and John moved to a different state. John never saw Bill again, only paid child support sporadically, and was in and out of jail. John and Bill have no real parental relationship. Bill’s maternal grandmother watched him while Mary was at work. Mary died in a car accident when Bill was eight years old. Mary named grandma to be Bill’s legal guardian in her Will. The probate judge will take into account the close relationship between grandma and Bill when deciding whether John should get custody of Bill.