The fourteen-item post-divorce estate planning audit

The divorce decree is the event that makes the estate plan wrong. Every beneficiary form, trust, power of attorney, jointly titled account, and executor designation the client touched during the marriage still carries the ex-spouse’s name after the decree is entered. The decree does not remove any of them. Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009) and Egelhoff v. Egelhoff (2001) settled that question for ERISA plans at the Supreme Court level, and state-level revocation statutes cover only a subset of the remaining items. This post walks through the fourteen-item post-divorce estate planning audit an advisor should run on every household that ends a marriage, plus the three-tier revocation framework that tells you which items state law fixed for you and which items still need a form filed by hand.

Why the decree does not do the work

A divorce decree binds the parties. Whether the financial institutions, insurance carriers, plan administrators, trust companies, and county recorders that actually hold the assets change their records is a separate question entirely.

The decree can direct a party to take those actions. It can require a retirement plan to pay the other spouse through a Qualified Domestic Relations Order (a QDRO, governed by ERISA § 206(d) and IRC § 414(p)). It can order a transfer of the homestead or require a life insurance policy to be maintained for a minor child. But the decree itself does not execute those transfers. The parties and the institutions do.

If the parties never execute, the accounts and documents stay in their pre-divorce state. The institutions, the trust administrator, the probate court, and the insurance carrier all pay according to the form on file. The decree sits in a folder, legally valid and operationally irrelevant, while the plan pays the ex-spouse. The deeper mechanics of how non-probate designations override the will are covered in our essay on beneficiary designation drift.

Timing is its own failure mode. Too early and you create friction with the divorce attorney, who may reasonably want third parties out of the accounts while distribution is still being negotiated. Too late and every un-updated beneficiary form is a live liability. The common failure is leaving it for "after things settle," which in practice means never. Set a hard deadline: thirty days after the decree is final for Tier 1 and Tier 2 items, ninety days for the full fourteen-item run.

The fourteen-item audit

Every item on this list is a form, document, or titling decision that can still carry the ex-spouse’s name after the decree is entered. Each one needs to be touched by hand or explicitly confirmed as revoked by operation of law (see the three-tier framework below).

Most households have items in every category. Missing one can mean the entire decree gets re-litigated in probate a decade later, at a cost that vastly exceeds the cost of running the audit correctly the first time.

The three-tier revocation framework

Not every item on the audit is equally risky after the decree. Some items are automatically revoked by state law. Some are automatically revoked by federal probate doctrine. Some are not revoked by anything except a new form. Understanding which tier each item falls into is the difference between a thirty-minute audit and a two-day audit.

Tier 1: ERISA plans

State revocation statutes do not apply. Kennedy v. Plan Administrator for DuPont Savings and Investment Plan (2009) and Egelhoff v. Egelhoff (2001) confirmed that ERISA preempts any state-level automatic revocation of ex-spouse beneficiaries on employer-sponsored retirement plans. Only a new beneficiary form, filed with the plan administrator and accepted under the plan document, changes the payee. Items in this tier: 401(k), 403(b), pension plans, most employer-sponsored life insurance and disability, and ERISA-governed employer HSAs.

Tier 2: Non-ERISA, non-probate

Many state probate codes, modeled on Uniform Probate Code § 2-804 or a state-specific analog, automatically revoke ex-spouse dispositions on individually-owned non-probate transfers (IRAs, individually-owned life insurance, annuities, TOD accounts). In Sveen v. Melin, 584 U.S. 811 (2018), the Supreme Court upheld retroactive application of a state revocation statute against a Contract Clause challenge, which effectively ratified the Tier 2 pattern across the country. Coverage still varies by state, and some states have no revocation statute at all. Treat Tier 2 as requiring manual updates and confirm state-by-state before relying on automatic revocation.

Tier 3: Probate and testamentary

Wills and trust provisions in most Uniform Probate Code jurisdictions revoke ex-spouse dispositions automatically upon divorce. The revocation removes the ex-spouse as a taker. It does not remove them as an executor, trustee, guardian, health care agent, or successor. Every client document needs to be re-executed or amended to install the new slate of fiduciaries, even in the most revocation-friendly state.

Work Tier 1 first, Tier 2 second, Tier 3 last.

The ERISA landmines in Tier 1

The QDRO is the mechanism that splits the plan between the parties. It is the mechanism that updates the beneficiary on the split-off portion only. After the plan pays the ex-spouse the QDRO-ordered share, the remaining balance stays in the participant’s account, and the beneficiary on file stays the beneficiary of that remainder until a new form is accepted.

Three landmines advisors hit in Tier 1:

• The participant files a QDRO and assumes the ex-spouse is removed from the plan entirely. In fact, the ex-spouse remains the default beneficiary on the unsplit remainder. At the participant’s death, the plan pays the ex-spouse unless a new form is on file.
• The participant remarries and tries to file a new beneficiary designation naming a non-spouse primary beneficiary (an adult child, a new trust) without the new spouse’s written consent. ERISA § 205 requires the current spouse’s written consent, typically notarized, for any non-spouse primary beneficiary on most 401(k) and defined benefit plans. Without the consent, the plan may reject the form or default back to the spouse at death.
• The participant files the new form at the wrong address. Plan administration is often split between an HR function, a recordkeeper, and a third-party administrator. A form mailed to HR may never reach the administrator of record. The audit is not closed on an item until written confirmation from the plan administrator is on file.

The post-divorce audit catches all three by routing each Tier 1 item to the plan administrator with a correct documentation package, including spousal consent where applicable, and confirming receipt before closing the item.

The state-level variation in Tier 2

Tier 2 is where advisors get blindsided by state law. An IRA beneficiary form filed in one state behaves differently at death than the same form filed in another state. Some states automatically revoke ex-spouse designations on non-ERISA non-probate transfers, generally following the Uniform Probate Code § 2-804 model or a state-specific statute. Some states have narrower revocation rules. Some states have none at all. Sveen v. Melin (2018) confirmed that states with revocation statutes can apply them to pre-existing designations without violating the federal Contract Clause, but that case did not require any state to adopt such a statute.

If you are an advisor running this audit for a client, the practical rule is to assume Tier 2 items are not automatically revoked, and treat every IRA, individually-owned life insurance policy, annuity, TOD account, and HSA as an item that needs a fresh beneficiary form filed with the institution and confirmation received.

That default is safer than relying on state law. State revocation rules vary widely. The institution may not apply the state rule correctly at the moment of death, and litigation to enforce revocation is expensive and slow. The client often moves between states during a long advisor relationship, and the state that matters for a revocation question at death is the state of residence at death, not the state where the decree was entered.

File the form.

Tier 3 and the trust documents themselves

A revocable living trust that was drafted during the marriage needs either an amendment or a full restatement. Amendment is appropriate when only specific provisions change (an ex-spouse as primary beneficiary moves to residual, the successor trustee line changes, the incapacity committee is replaced). Restatement is appropriate when the post-divorce plan is structurally different from the pre-divorce plan (different number of beneficiaries, different trust purposes, different distribution standards, different trustee line).

Amendments and restatements on Bancroft are always free, a pricing decision driven by exactly this use case. A client who amends twice during a complex divorce, then restates once when they remarry, should not face a fee wall that discourages them from keeping the plan current. The full mechanics are on the amendments and restatements help article.

Beyond the trust itself, the pour-over will needs re-execution with updated executor, guardian, and contingent distribution scheme. The financial and health care powers of attorney need re-execution with new agents. The HIPAA authorization needs to name the right people. Every document the client signed during the marriage is presumptively out of date after the decree. Plan to re-execute the entire binder.

What Bancroft provides for the audit

A dedicated "divorce life event" workflow that automatically runs the fourteen-item audit end to end is not a feature Bancroft ships today. What the platform does provide is the set of components the audit depends on: a household Asset Inventory with per-asset funding strategy, advisor-driven document generation for amendments and restatements of trusts, pour-over will re-execution, new financial and health care powers of attorney, a new HIPAA authorization, beneficiary designation change forms, and funding letter packets for the asset categories covered by the Funding Letter Automation (bank, brokerage, retirement, life insurance, business interests, safe deposit boxes).

The operational pattern for running the audit on Bancroft: the advisor updates the household inventory to reflect post-divorce titling, marks the relevant assets for retitling or beneficiary change, and generates the new beneficiary forms and funding letters through the standard workflow. The advisor drives trust amendments or restatements and new powers of attorney through the same questionnaire-based generation path. The client downloads the packet, signs and mails the forms, marks each mailed, and uploads proof of receipt to the encrypted Digital Safe. A daily reminder cron chases open items. The full funding letter workflow is on the funding letters page.

For any household where the post-divorce situation exceeds what the templates cover (complex community property, contested QDRO, business buy-sell with the ex-spouse, special needs beneficiaries, international assets), the $299 attorney review fee routes the document to a licensed attorney for individualized review before finalization. Amendments and restatements to existing Bancroft documents are always free. The line between template-level preparation and individualized attorney review is covered in our essay on attorney-reviewed vs attorney-prepared.

The bottom line

The divorce is the event. The audit is the response. Advisors who treat the decree as self-executing find themselves in the probate fight a decade later, explaining to the adult children why the beneficiary form was never updated. Advisors who run the audit keep the estate plan aligned with the client’s actual intent and turn a high-risk life event into a retention moment.

Run the audit. File the forms. Confirm receipt.

Then do it again in five years.