A lot of things end at the time of divorce, not just a marriage.

If you’ve been smart and had an estate plan prepared while you’re married, you now need to be proactive again. Upon divorce, many documents cease to have their same effect. That can often be a good thing, but it can leave holes in your estate plan if you’re not aware of the changes.

For your power of attorney, if you had your spouse listed as your Power of Attorney Agent, then upon the divorce becoming finalized, the power of attorney ceases to have effect.

“Unless otherwise expressly provided by the durable power of attorney, if, after execution of a durable power of attorney, the principal is divorced from a person who has been appointed the principal’s attorney in fact or agent or the principal’s marriage to a person who has been appointed the principal’s attorney in fact or agent is annulled, the powers of the attorney in fact or agent granted to the principal’s former spouse terminate on the date the divorce or annulment of marriage is granted by a court.” –  Texas Estates Code, Section 751.053

This means the Agent (your former spouse) can no longer use the Power of Attorney to sign contracts or financial documents. However, if they have a copy of the Power of Attorney it may not stop them from using it for illegal gains. Therefore, if you’ve given a copy of the Power of Attorney to a bank or institution in the past or your spouse has used it in the past, make sure to send that bank or institution notice that you’ve revoked that former spouse’s status. Just to keep them honest.

For your Last Will and Testament, if you had everything in your estate going to your spouse upon your death, that changes too with your divorce. Now, the Court will consider your spouse to have predeceased (died before you) and it will go to the next person listed in your Will. A major problem that we often encounter here is that they didn’t list an alternative beneficiary, so instead of going to a specific person you may have in mind, it instead goes to all your heirs at law, whomever they may be.

Also, with your Last Will and Testament, it’s very common to name your spouse as your Executor of your Will and Estate. If you’re now divorced, your spouse loses that position too, meaning you need to make sure you  have an alternate Executor named or amend.

It’s a good idea to revise your Will and Estate Plan immediately after the divorce is finalized. Your family has changed, your situation has changed, and your assets and estate have probably changed too (hopefully for the better, but more likely for the worst) so your Estate Plan needs to take these new changes into consideration.

Goodluck!

-Blaise Regan

Many people want to be in charge of their loved one’s Estate because it comes with a lot of power and authority, and they believe they are the best ones to carry out their loved one’s wishes. While that may be the case, the State of Texas has some reservations who qualifies as the best choice for the Executor or Administrator.

Section 304.003 of the Texas Estates Code states that a person may not serve as an Executor or Administrator who is:

(1) incapacitated;

(2) a felon convicted under the laws of the United States or of any state of the United States unless, in accordance with law, the person has been pardoned or has had the person’s civil rights restored;

(3) a nonresident of this state who:

(A) is a natural person or corporation; and

(B) has not:

(i) appointed a resident agent to accept service of process in all actions or proceedings with respect to the estate; or

(ii) had that appointment filed with the court;

(4) a corporation not authorized to act as a fiduciary in this state; or

(5) a person whom the court finds unsuitable.

The point that disqualifies the most people is number (2) a felon may not serve. Whether the crime was committed two weeks ago or five years ago doesn’t really matter. That person is still disqualified. It’s important to tell your attorney if you are a convicted felon because you could spend thousands of dollars on the Application to be appointed, only to be denied because of the conviction.

This is a good reason to always have an alternate named Executor in your Will, in case your first Executor is disqualified.

Second, there is an order of preference the Texas Estate Code has in who may serve as the Executor.

(a) The court shall grant letters testamentary or of administration to persons qualified to act, in the following order:

(1) the person named as executor in the decedent’s will;

(2) the decedent’s surviving spouse;

(3) the principal devisee of the decedent;

(4) any devisee of the decedent;

(5) the next of kin of the decedent;

(6) a creditor of the decedent;

(7) any person of good character residing in the county who applies for the letters;

(8) any other person who is not disqualified under Section 304.003; and

(9) any appointed public probate administrator.

Having a Last Will and Testament allows you to designate the person you wish to have as your Executor. Your wishes in your Will bypass this list and place the person you have listed in your Will at the top of the list for the Court to appoint.

Goodluck!

-Blaise Regan

I get several calls a month from people saying that they don’t understand why they need to probate their mom’s estate (or their spouse’s, dad’s, brother’s, sister’s estate) because before they died their mom signed a Power of Attorney naming them as their mom’s agent. Or, even worse, they call and say they’ve already taken care of their deceased loved one’s estate using the Power of Attorney.

What they don’t realize is that a Power of Attorney ends the moment the Principal dies. If your mother signs a Durable Power of Attorney naming you as her Power of Attorney agent, then you may act for her benefit while she is living, even if she is in a coma. You can sign contracts in her name, you can typically open and close her bank accounts, you can buy and sell real property in her name (as long as the Power of Attorney document is on file with the County Clerk where the property is located). But the moment your mother passes away, the Power of Attorney is no longer valid. You cannot go to the bank right after your mother passes away and transfer her money to yourself. That is self-dealing, fraud, and carries with it severe civil and criminal penalties.

The Executor or Administrator is the person that takes charge of your mother’s estate. In some cases, that may be you too. If your mother named you in her Will to be her Executor, then you will apply to the Probate court to be named Executor. If you are appointed Executor, you will be able to transfer assets in your role as Executor, but not as a Power of Attorney Agent.

An easy way to view the process is that a Power of Attorney Agent acts for your mother’s benefit while she is living, and the moment she passes away the Power of Attorney ends, and the Executor takes over the management of her estate. You may be both the Power of Attorney Agent and the named Executor in the Will, but until the Probate Court appoints you Executor, you are powerless and the estate is limbo.

It’s best to contact an attorney before you transfer any assets using a Power of Attorney as self-dealing and embezzlement charges can be levied against you even when you are acting with the best of intentions.

Goodluck!

-Blaise Regan

Blaise Regan is a Partner at Regan & Frisbie, PLLC, a law firm focusing on Wills, Trusts, Probate, Contracts, Business Formations (LLC, Corporation, S-Corp Designation), Business Disputes, and Consumer Litigation.

Regan & Frisbie, PLLC is located at 7160 Preston Road, Suite 100, Plano, Texas 75024.

Comments or questions, feel free to email him at Blaise@RFPlawfirm.com or call him at 469.200.4737.

*Nothing in this Article is to be considered as the rendering of legal advice for specific cases, or creating an attorney-client relationship, and readers are responsible for obtaining such advice from their own legal counsel. This article is intended for educational and informational purposes only, and no warranty or representation is made as to the accuracy or completeness of the information contained herein.