The 2026 Update on Georgia Law “Ski LE” in Avon, Colorado served as an opportunity for Gaslowitz Frankel attorney Robert C. Port to educate fellow Georgia lawyers on the increasingly regularity with which family law issues can also implicate probate, estate, and trust matters. Robert’s presentation on “Update on Fiduciary Law — the Intersection of Family Law and Probate,” was well received by the judges and lawyers in attendance.
Robert’s presentation addressed these important and reoccurring issues:
Why Divorce Might Not Protect Your Assets From Your Ex Spouse
Many people believe that once a divorce is finalized, their legal ties to their former spouse are completely severed. However, in Georgia, the “clean break” you expect might be a legal illusion when it comes to your life insurance, retirement accounts, or bank accounts.
In Georgia, if you have a Last Will and Testament, a divorce automatically revokes any provisions that benefit an ex-spouse. The law essentially treats the former spouse as if they had died before you.
However, this rule does NOT apply to beneficiary designations. Assets like life insurance policies, IRAs, 401(k)s, and bank and brokerage accounts are contracts between you and a financial institution. If you fail to formally update the beneficiary designations on these accounts, the bank or insurance company is contractually obligated to pay the person listed on the form—even if that person is an ex-spouse from an acrimonious divorce years ago.
Why Your Settlement Agreement Might Not Be Enough
You might think that a standard divorce settlement agreement, where both parties “release all claims” against each other, protects you. Unfortunately, Georgia courts have repeatedly ruled that a general release is often not enough to cancel an ex-spouse’s “expectancy interest” in a policy.
To truly protect these assets, Port advises that your divorce settlement agreement clearly and unambiguously state that the ex-spouse waives and renounces all future rights to financial assets that pass by beneficiary designation, life insurance policies, IRAs, 401(k)s, and bank and brokerage accounts. Without this precise language, your ex-spouse could still legally claim the money upon your death. Further, if you have a 401(k) or other benefit plan provided by your employer, it may be covered by a federal law called ERISA. Federal law is very strict. Plan administrators must follow the plan’s specific procedures for naming beneficiaries and removing soon to be ex-spouses.
Protecting Payments Due in a Divorce Settlement
When a divorce settlement requires one spouse to pay child support, alimony, or other financial obligations, life insurance is often required as a “safety net” to ensure those payments continue even if the payer dies.
However, many divorce settlements fail to provide the protections to assure that the insurance in in fact procured and stays in place. Common pitfalls include:
- Vague Documentation: Many agreements require insurance but fail to list the specific insurance carrier or the policy number.
- Lack of Enforcement: Settlements often lack a mechanism to ensure the payer actually keeps the policy active.
- The “Lapse” Risk: If a policy lapses because premiums weren’t paid, the intended beneficiaries (like minor children) may be left with no financial support.
As a result, the following issues often arise:
- If a person dies without insurance to cover their divorce obligations, the surviving spouse’s only remedy is to file a claim against the probate estate.
- These claims against an estate are often treated as general unsecured claims with the lowest priority, meaning the money may never be paid if the estate has other debts.
- A probate estate cannot be held in “contempt of court” for failing to pay divorce obligations because the estate itself was not a party to the original divorce decree.
To address these risk, Port suggested the following:
- Detailed Identification: The settlement agreement should explicitly identify the policy by the carrier name and the policy number.
- Third-Party Designee: The agreement should require the insurance company to name the recipient spouse as a “third-party designee.” This ensures they are notified if a premium is missed so they can pay it themselves to keep the policy in force.
- Irrevocable Designations: Some insurance carriers allow a policy to be made “permanent and irrevocable,” which prevents a disgruntled ex-spouse from canceling it.
- Insurance Trusts: Creating an independent trust to hold the policy is often the most secure method. An independent trustee has a legal duty to keep the policy active and can adjust the coverage as children grow older.
Will Assets in a Trust Be At Risk in a Divorce?
You may wonder if money tucked away in a trust is “off-limits” when dividing property in a divorce. In Georgia, the answer depends on a multitude of factors and circumstances. Port advised Georgia lawyers to ask the following types of questions:
- When was the trust formed and funded? Well before the marriage, or after the marriage?
- What type of trust is it – revocable or irrevocable trust?
- Who serves as the trustee? A spouse or a true independent trustee?
- What is the source of the trust’s assets? Was it solely funded by one spouse from separate assets? From the spouses’ combined assets? Is it family money (e.g., a trust funded by grandparents)?
- What are the distribution criteria?
- Is broad discretion vested in trustee?
- Are the beneficiaries’ other assets to be taken into account?
- Is the possibility of a distribution contingent on a future event?
- What is the history of the “discretionary” distributions? Are they intermittent and of different amounts, or has the trustee adopted a regular schedule of payments that the beneficiary expects to receive?
Proactive Steps to Take
Port suggested there are some steps to take to reduce the possibility that an estate or trust will later have to address issues related to a divorce:
Audit Your Financial Accounts: Review every life insurance policy, retirement account, and bank account to see who is listed as the beneficiary.
Be Explicit in the Divorce Settlement Agreement: Ask your attorney to use specific language that so that your ex waives all future rights and expectancy interests in all financial accounts.
Be Proactive: Some people wait until the divorce is final to change their Will or beneficiaries, but you should have your attorney evaluate whether local law, or the rules of the divorce court, allow you to change a beneficiary designation as soon as a divorce is pending. Some jurisdictions prohibit any such changes until after the divorce is final.
The attorneys of Gaslowitz Frankel have years of expertise in handling the complex issues surrounding will, trust, estate, business, and securities disputes. For trusted estate law and fiduciary legal guidance, consult with the attorneys of Gaslowitz Frankel.
