Changes in the law can affect your estate plan without you realizing it. This is one reason why it is a good idea to sit down with a Madison estate planning lawyer every few years to review your will, trust, and related documents.
Another reason you may need to revise your estate plan sooner rather than later is a dramatic change in your family situation, such as a divorce. Even when your divorce settlement dictates a particular division of property, your estate plan may still name your now ex-spouse as a beneficiary or agent in certain areas. Depending on how friendly–or unfriendly–your divorce was, you may want to change these designations.
Wisconsin’s Revocation-Upon-Divorce Law
This is where state law can act without your knowledge. Like many states, Wisconsin has a “revocation upon divorce” law specifically designed to remove your ex-spouse from large parts of your estate plan without you taking any formal action. Essentially, the law says that upon a divorce or annulment, the following provisions of your estate plan are automatically revoked:
- Any bequests of property or other “disposition” to your ex-spouse or one of his or her relatives.
- Any nomination or appointment of your ex-spouse to serve as the executor of your estate or as an agent under a power of attorney.
- Any designation of the ex-spouse as a beneficiary to any property that may pass outside of probate, such as a life insurance policy or retirement account.
Note that the law only revokes those provisions related to your ex-spouse. It does not revoke the entire document. To put it another way, the law basically directs the courts to act as if your ex-spouse (and his or her relatives) predeceased you when interpreting the terms of your will, trust, or power of attorney.
Keep in mind that revocation only applies to documents executed prior to your divorce. You are perfectly free to sign a new will or beneficiary designation restoring your ex-spouse’s rights. You can also include language in a pre-divorce document, including a prenuptial agreement, expressly overriding the revocation-upon-divorce law.
Does the Law Apply Retroactively?
Like many revocation-upon-divorce laws, The Wisconsin statute is retroactive, meaning it applies to all estate plans, even those created before the legislature formally adopted or amended any of its provisions. There has been some confusion as to whether or not such retroactive application is constitutional. In 2002, a federal judge in Wisconsin upheld retroactive application to invalidate the life insurance beneficiary designation of a deceased individual’s ex-wife. Wisconsin only extended the revocation law to non-probate assets in 1998, which was after the couple divorced. Nevertheless, the Court said the law still applied.
More recently, on June 11, 2018, the U.S. Supreme Court rejected a challenge to the retroactive application of Minnesota’s revocation-upon-divorce law, which is similar in form to that of Wisconsin. By an eight to one vote, the justices said applying such laws retroactively “does not substantially impair pre-existing contractual arrangements.” In any event, former spouses “cannot reasonably rely on a beneficiary designation staying in place after a divorce.”
Get Help from a Madison Estate Planning Attorney
The estate lawyers of Krause Donovan Estate Law Partners, LLC practice law in the areas of Probate, Wills, Estate Planning, and Trusts. We assist clients in and around Madison, Wisconsin with all matters related to estate planning, trusts, and probate matters. Our dedicated attorneys will even make house calls if you are unable to come to our office.
To attend a free estate planning workshop or to receive our client planner to assess your estate planning mindset, contact our office by calling (608) 268-5751 or use our online contact form.