Divorce and separation are becoming all too common in today’s society. With the emotional, not to mention the financial, aspects becoming the focus, many people facing the breakup of a marriage tend to overlook another important issue, the estate planning aspect.
Often as part of estate planning, a husband and wife will execute either a durable power of attorney or a general power of attorney in which they will name each other as an attorney in fact or an agent. Normally, these powers of attorney grant the other spouse control over the assets of the individual granting the power.
If a husband gives a wife a general power of attorney, the wife can use this power to close or make withdrawals from the husband’s individual bank accounts, brokerage accounts and other assets. With emotions running high when a separation or divorce is looming, this is not a good situation.
To revoke a power of attorney, you must locate all of the original documents and destroy them and/or notify the agent that the power is revoked. Notifying the spouse that his power of attorney is revoked will do little good if the spouse is bent on taking your assets.
To address this, you should give written notice to all the institutions which hold your assets to inform them that the power of attorney has been revoked. If the issue of a spouse improperly using a power of attorney is exposed during the divorce, certainly a Court would try to remedy the situation, but if the money is gone, it’s gone, there may be no remedy in some cases.
If you are facing the breakup of a relationship in which you have legal documents executed naming someone as an executor, an agent or proxy, consult with an estate planning attorney to make sure you address the impact on your estate planning documents.