In 2010 the New York Times printed an article entitled “The Un-Divorced”. The article discussed couples who have stayed separated for years but never got divorced. For example, Warren Buffett, the chairman of Berkshire Hathaway, separated from his wife, Susan, in 1977 but remained married to her until her death in 2004 even though he had been in a long-term relationship with someone after the separation.
Why no Divorce?
The article discusses numerous reasons that married couples may separate but not divorce. “Divorce lawyers and marriage therapists say that for most couples, the motivation to remain married is financial.” As a couple, you may be able to qualify for insurance coverage that you could not obtain if apart.
With fluctuating real estate prices, liquidation may not seem attractive. Some people feel that it is easier to co-parent if the parties don’t finalize a divorce. For others, the prospect of an ugly divorce is so traumatic that they remain separated for years rather than proceed to terminate the marriage.
Impact of Separation on Your Estate Plan
Many people think that a separation automatically revokes any distribution you provide for your spouse in your Last Will and Testament or Revocable Living Trust. Not in Nevada! Divorce doesn’t revoke a will or trust but it does revoke every device, beneficial interest, or designation to serve as a personal representative or trustee and the documents are treated as if the former spouse had died before you. NRS 133.115. NRS 163.567.
In addition, to the extent you have named your spouse as the beneficiary of a life insurance policy, payable on a death account or pension, a divorce automatically revokes these designations. No such actions occur if you are only separated at your death. As a result, your designations and bequests to your spouse will be enforceable, even if you have been separated for years and are involved in another relationship.
Living Apart Without an Estate Plan
If a person dies without a will, he or she is said to have “died intestate.” The estate of a person who has died intestate goes through probate court. The Nevada Revised Statutes determine who will inherit your assets when you pass away intestate. While this sounds reasonable, the results can have unintended consequences, especially when you are separated from a spouse but not divorced.
Separation and Intestate Succession
Assets acquired during the course of a marriage in Nevada are considered “community property” and are treated as being owned 50/50 between the spouses. Examples of community property include wages earned by either spouse, real estate bought during the marriage, and investment income earned during the marriage. Whether an asset is community property will affect the inheritance rights associated with that property.
Nevada’s intestacy laws provide that upon the death of one spouse, the deceased spouse’s share of the community property is to be inherited by the surviving spouse. So, even if you are living apart and maintain separate finances, to the extent you have assets acquired during the marriage (even while separated), they may be considered community property and would be transferred to the surviving spouse upon your death.
Sole and Separate Property
If you are living apart, you could acquire a home and title it as “an unmarried person, as my sole and separate property”. When a person dies intestate, his/her separate property does not automatically get inherited by the surviving spouse. Instead, when you pass away and are survived by your spouse and one child, separate property is distributed equally between the surviving spouse and child. When, when there is more than one child, the spouse only receives one-third of the separate property and the children receive, in equal shares, the remaining two-thirds of the separate property.
While there may be many reasons you have elected to separate and live apart from your spouse, you should be aware of the implications upon your estate at your death as the inheritance rights of your spouse would remain intact. If you are interested in learning how we can address these issues in your plan, please don’t hesitate to contact us at (702)798-4955.
For more than 30 years, Attorney Lee A. Drizin has practiced in the areas of estate planning, probate, trusts, guardianship, and real estate matters representing clients throughout the state of Nevada.
Drizin Law is providing this information for educational purposes only. It should not be construed as legal advice or a legal opinion as to any specific facts or circumstances. This information is based on general principles of Nevada law at the time it was created and you should be aware laws frequently change. Moreover, the laws affecting you may differ depending on the circumstances. You should consult with a qualified attorney in your own state or jurisdiction concerning your particular situation. A review of this information does not create an attorney-client relationship.