By Melissa Exline
On more than on occasion, I have had a client ask if they can change their estate planning documents such that their Husband or Wife does not inherit anything should the client die while a divorce is pending. Is this allowed? This can come up during a divorce when emotions are running high. Sometimes, the parties have an agreement that this is their plan – even if everything between the spouses is fine. However, the issue is not so simple. One person is not permitted to completely “write out” their spouse. A premarital agreement mandating a different situation or agreement by the spouses during the marriage as a post-nuptial agreement would allow for a distribution to someone other than the spouse.
What does the law say in Nevada about what must be left to a spouse? NRS 123.250 states that upon the death of either husband or wife, an undivided one-half interest in the community property is the property of the surviving spouse. So, this means a person that desires not to leave property to a surviving spouse is permitted to dispose of his or her separate property and his or her one-half share of the community property. This provision does not apply to community property with right of survivorship and there are other limitations.
Generally, when there is a divorce pending, there is also the normal financial restraining order language that will bar a party from changing beneficiaries. In Washoe County, this would include an order with language which states the following:
(1) mutually restrains the parties from transferring, encumbering, hypothecating, concealing or in any way disposing of any property, real or personal, whether community or separate, except in the usual course of business or for the necessities of life;
(2) mutually restrains the parties from cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance coverage, including life, health, automobile, and disability coverage;
(3) mutually restrains the parties from cashing, borrowing against, canceling, transferring, disposing of retirement benefits or pension plans for the benefit (or election for benefit) of the parties or their minor child or children.
If an order is issued with this language, it arguably precludes any “disposal” of property by Will or Trust in a way that would exclude the spouse. It is not clear this language can bar someone from disposing of what is permitted under NRS 123.250. If a party opted to change his or her Will or Trust to give his or her separate property and one-half interest in community proper to someone other than a spouse, the restraining order may not apply to bar this from happening. If you want to write your spouse “out” then it is important this is done with some thought and planning – otherwise, if done improperly, the intent to cut out the spouse would not survive a fight in court.