Suppose a married couple signs wills leaving everything to one another, and naming each other as personal representative of their estate. What happens when they later divorce? In Arizona, our broad “revocation on divorce” law kicks in.
The concept is straightforward. After a divorce you probably want to change your estate planning documents. Maybe you haven’t had time to get around to it. The law takes care of it until you get back to the lawyer’s office.
Arizona’s law is particularly broad. It automatically invalidates any will, trust, life insurance or other beneficiary designation you made naming your ex-spouse. It also rewrites your will, trust and powers of attorney to edit out your ex-spouse from any fiduciary role. He or she will no longer be eligible to serve as your agent, trustee or personal representative.
It doesn’t even stop there. Your ex is treated as having disclaimed any of those rights — and so are his or her relatives. Unless, that is, those relatives are also still related to you by “blood, adoption or affinity.”
What the heck do they mean by “affinity“? That’s the central question in a recent Arizona case interpreting the “revocation on divorce” law.
Ronald Podgorski’s will and trust
Ronald and Patricia Podgorski married in 1987. He was 39; she had two young children from her first marriage. The couple had no children together, and Ronald never adopted Patricia’s children.
In 2007 the Podgorskis signed a joint revocable trust, wills and powers of attorney. Ronald’s will left everything to their trust. The trust, in turn, left everything to the survivor after the first death; on the second death, everything was to go to Patricia’s children.
After almost thirty years of marriage, the Podgorskis divorced in 2016. Ronald never signed a new trust or will. He died in 2018.
Arizona’s revocation on divorce law treated Patricia as if she had signed a disclaimer of her inheritance, and of her standing to serve as personal representative or trustee. But ordinarily that would mean that her children would have authority to act, and would receive his estate. Did the revocation on divorce law remove them, as well?
Patricia’s children were no longer related to Ronald by blood, and he had never adopted them. But could they still be related to him by “affinity?” That’s what they argued, and they asked the probate court to appoint one of them as Ronald’s personal representative, and as trustee.
The revocation on divorce law goes to court
The Arizona probate judge considered the evidence. She found that Ronald had remained close to his step-children even after the divorce. He had treated them as his own children for three decades, after all. Even after his divorce, he named his step-children as beneficiaries on his retirement account, and continued to pay premiums on a life insurance policy naming them as beneficiaries.
But wait, argued Ronald’s brother and sister. The step-children were only related to Ronald through the marriage, and it ended in divorce. His ex-wife’s children should be treated as also having disclaimed any interest in his estate. That would leave everything to his next of kin — his two siblings.
The probate judge ruled that the connection between Ronald and his step-children had continued after the divorce, based on his connection with the children dating from the years of marriage. He still intended to benefit them, according to the court, as evidenced by that continuing affinity.
The Arizona Court of Appeals recently upheld the probate court’s ruling. Ronald’s step-children would inherit from him (and act as personal representative and trustee) despite Arizona’s revocation on divorce law. Podgorski v. Jones, August 6, 2020.
Is that the right result?
Of course, what really matters is Ronald’s intent. Did he mean to leave his step-children in charge, and as heirs to his estate? Or would he have left everything to his siblings, or to charity, or to someone else — if he had only gotten around to considering the question?
The revocation on divorce law — like so many laws in the probate arena — is intended to cover events that are not planned for. But it is just a default rule. Ronald could have resolved the questions about his intent very easily — he could have just signed a new will (and maybe, but not necessarily, a trust). Then we would all know what he intended, and his family (both by blood and by affinity) would know what he wanted. Plus a lot of legal fees could have been saved.
Did someone in the Arizona legislature intend to include Ronald’s step-children by adding the words “by affinity” in the revocation on divorce law? Almost certainly not. On reflection, the people who wrote the statute would likely have recognized that an ill-defined term like “affinity” was ripe for litigation and uncertainty. Maybe now the law will get revisited — and either a definition of “affinity” added or the word removed.
One key point before we leave the revocation on divorce discussion. Arizona’s law is very broad, and would seem to apply in all manner of circumstances. There is, however, one huge exception to the general applicability of Arizona’s law. Federal law preempts Arizona’s statutes when the Employee Retirement Income Security Act (ERISA) is involved. That means that many beneficiary designations on retirement accounts, for instance, are governed by the federal rules and not Arizona law. Bottom line: divorced people really, really need to see their estate planning attorneys to clarify their wishes.