Estate Planning After a Divorce in Texas

Estate Planning After a Divorce in Texas

Divorce changes everything—your finances, your family structure, your daily life. But there's one thing many people forget to change: their estate plan. If you've recently gone through a divorce in Texas, updating your estate plan isn't optional. It's urgent.

At Dickey Law Group, we help clients rebuild their estate plans after divorce. Here's what you need to know and what to do first.

Texas Law and Your Ex-Spouse's Inheritance Rights

Texas does provide some automatic protection after divorce. Under Section 123.001 of the Texas Estates Code, once your divorce is final, any provisions in your will that benefit your ex-spouse are automatically revoked. The law treats your ex as if they died before you.

That sounds reassuring—but it has significant limits:

• It only applies to your will. It does not apply to beneficiary designations on life insurance, retirement accounts, or payable-on-death accounts.
• It only applies after the divorce is final. If you're separated but not yet divorced, your spouse still inherits under your current will.
• It doesn't affect trusts in all cases. If you created an irrevocable trust naming your spouse, the divorce may not automatically change those terms.

Relying on automatic revocation is a gamble. The safest approach is to update every document yourself.

Update Your Will Immediately

Even though Texas law revokes your ex-spouse's provisions, you should still create a new will. Here's why:

1. Your old will may become partially invalid — If your ex was your primary beneficiary and you don't have adequate alternate provisions, a court may have to apply intestacy rules to fill the gaps.
2. Your executor may have been your spouse — Most married couples name each other as executor. You need a new one.
3. Your children's provisions may need adjusting — Custody arrangements, ages, and financial needs change after divorce.
4. A new will eliminates ambiguity — A clean, current document prevents arguments about your intent.

Don't just cross out your ex-spouse's name on the old will. That can invalidate the entire document. Create a new will from scratch.

Beneficiary Designations: The Most Dangerous Gap

This is where we see the biggest mistakes. Beneficiary designations on financial accounts are governed by contract law—not by your will, and not by the Texas Estates Code's automatic revocation rule.

That means if your ex-spouse is still listed as the beneficiary on your:

• Life insurance policy
• 401(k) or employer retirement plan
• IRA
• Annuity
• Bank account with a POD designation

...they will receive that money when you die, regardless of what your will says. The U.S. Supreme Court confirmed this principle in Hillman v. Maretta—the beneficiary designation controls.

Federal law adds another layer of complexity for employer-sponsored retirement plans. Under ERISA, your ex-spouse may have rights to your 401(k) that can only be addressed through a Qualified Domestic Relations Order (QDRO) as part of your divorce settlement.

Action step: Contact every financial institution where you have an account and update your beneficiary designations. Do this within days of your divorce being finalized, not weeks or months.

Revoke and Replace Your Powers of Attorney

If your ex-spouse is named as your agent in your durable power of attorney or medical power of attorney, you need to revoke those documents and create new ones immediately.

Under Texas law, a divorce does revoke your ex-spouse's authority under a medical power of attorney. But for a statutory durable power of attorney, the rules are less clear—and you shouldn't rely on automatic revocation when the stakes are this high.

Choose a new agent you trust to manage your finances and make healthcare decisions. Many divorced individuals name a parent, sibling, or adult child. Make sure your new agent knows they've been named and where to find the documents.

Protecting Your Children's Inheritance

If you have minor children, your estate plan after divorce needs to address:

• Guardianship — If something happens to you, who raises your children? In Texas, if the other parent is alive and has parental rights, they'll generally get custody. But you can name a guardian in your will for situations where the other parent is also deceased or unable to serve.
• Trust for minors — Leaving money directly to a minor child doesn't work well. The court will appoint a guardian of the estate to manage the funds, which involves ongoing court supervision. A better approach is to create a trust that names a trustee you choose to manage the money until your child reaches an age you specify.
• Protecting assets from your ex-spouse — If your ex has custody and you leave money to your minor child, your ex will likely control how it's spent as the child's guardian. A trust with a third-party trustee can prevent this.

Community Property Considerations

Texas is a community property state, and your divorce decree should have divided your community property. But sometimes things fall through the cracks:

• Retirement accounts that weren't properly divided
• Real estate that's still titled in both names
• Business interests that weren't fully addressed

Review your divorce decree carefully and make sure every asset division has actually been completed. Then update your estate plan to reflect only the assets you actually own post-divorce.

Build Your New Estate Plan

Think of this as a fresh start. Your post-divorce estate plan should include:

1. A new last will and testament
2. A new statutory durable power of attorney
3. A new medical power of attorney
4. A new directive to physicians (living will)
5. Updated beneficiary designations on all accounts
6. A trust for minor children if applicable

At Dickey Law Group, we understand the emotional weight of estate planning after divorce. We'll help you build a plan that protects your children, reflects your new reality, and gives you peace of mind.

Contact Dickey Law Group today to schedule a consultation. We serve families throughout The Woodlands, Spring, Conroe, and the Houston metro area. Call (832) 521-4414.