Update your estate plan right after your divorce. Arizona law helps block your ex-spouse from getting your assets. Under A.R.S. 14-2804, a final divorce order cuts your ex-spouse out of most estate plans. The law treats your ex as if they died before you. This applies to wills, trusts, IRAs, life insurance, POD and TOD accounts, and powers of attorney. It also removes any fiduciary role your ex held. That includes executor, trustee, or guardian.
What the Law Covers
The rule under A.R.S. 14-2804 applies to:
- Your will (who gets what and who runs things)
- Your revocable living trust
- IRA beneficiary names
- Life insurance policies
- Pay-on-death (POD) and transfer-on-death (TOD) accounts, plus any joint account
- Powers of attorney (money and health care)
- Joint tenancy and community property with right of survivorship (changed to tenancy in common)
The law also removes your ex's relatives. This covers those no longer tied to you by blood or marriage after the divorce.
The Critical Exception: ERISA Plans
Here is where it gets risky. The rule does not apply to 401(k) plans, pensions, or other work-based retirement accounts. These fall under federal ERISA law. Federal law beats state law for these accounts.
The U.S. Supreme Court has ruled on this. Plan managers must follow the name on file. Period. If your ex is still listed on your 401(k) when you die, they get the money. It does not matter that you are divorced. It does not matter what your will says. The name on file wins. You must call your plan manager and file a new form.
Prenuptial Agreements and Settlement Agreements
A prenuptial agreement may already spell out what each spouse keeps. A good one can protect assets from being split during divorce.
Your divorce settlement is just as key. It should list how real estate, retirement accounts, and other assets are split. Make sure every account has been retitled or updated with new names. A deal on paper means nothing if the account forms still show your ex.
Real Estate and Separate Property
Did you keep joint real estate in the divorce? Make sure the deed shows just your name or your trust. Property you got as a gift or through family is usually separate property. But the title still needs to match.
If a deed still shows your ex, they may have a claim. Also check any property that was split on paper but never retitled. This is a common miss that causes issues years later.
What Else You Should Update
A.R.S. 14-2804 gives you a safety net. But do not rely on it alone. Banks and insurers sometimes pay the named person before learning about a divorce. Your family may need to fight to get those funds back.
After a divorce, take these steps:
- Update every beneficiary name. Retirement accounts, life insurance, annuities, brokerage accounts, and bank accounts
- Sign new powers of attorney. Both for money and health care. Your ex should no longer make choices for you
- Update your will and trust. Name new people to get your assets and run your plan
- Retitle real estate. If you kept joint property, the deed should show just you or your trust
- Tell your banks and insurers in writing. Written notice creates legal cover if they pay your ex after being told not to
What If You Want Your Ex-Spouse to Receive Something?
You can leave things to your ex if you want. But you must sign new forms after the divorce. Any name added before the divorce is wiped out by law. To put it back, create a new one after the divorce is final.
Bottom line: Arizona law gives you a strong safety net. But it is not a full fix. Take action after every divorce to make sure your plan matches your wishes.