Divorce in New York: The Gary Coleman Lesson

I just read an article in the post about Gary Coleman and the mysterious circumstances surrounding his death. It won’t surprise most who know me that the fact I found most interesting is that Shannon Price, his ex-wife, made all of the medical decisions on his behalf. HIS EX-WIFE! Although it was revealed Wednesday that Coleman, and Price, had been divorced at the time of his death, the actor had given Price written permission to make medical decisions on his behalf.

Of course no one will ever know if in fact Coleman wished that his EX-WIFE would pull the plug and let him die, as she did, because he never revoked the document he executed giving her such power over his life.

In New York, pursuant to section 2981 of the New York State Public Health Law, the appointment of principle spouse as health care agent is automatically revoked upon the divorce. Now, Gary Coleman lived and died in Utah, so their laws may be different; however, regardless of the New York State Public Health Law, even in New York after you divorce, it is important to update your beneficiary designations on health care Proxies, Power of Attorney Forms, and any other financial instruments such as life insurance policies, stocks, bonds and other assets, since state law does not always offer 100% protection.

For example, the U.S. Supreme Court recently upheld a case involving an award to an ex-wife of the benefits of her ex-husband’s life insurance and pension plans because he never replaced her as the beneficiary. A federal law known as ERISA pre-empted a state law that automatically revoked beneficiary designations of ex-spouses after divorce. As you can see, if a situation like this is left unattended, an unintended outcome could result.

New York precludes an ex-spouse from inheriting under a Will created during marriage, and all provisions for spouse as executor or administrator are revoked automatically as well. However, the laws vary tremendously and resolution of the matter can be further complicated where a divorce occurs in one state, but the estate plan or beneficiary designation is governed by the laws of another state or the federal government.

Bottom line, is that you should have all estate planning documents reviewed. In particular, you’ll have to review your fiduciary designations with the following questions in mind.
Who is designated as the Trustee of a Trust?
Who is the Executor/Personal Representative of a Will?
Who is the Agent under a Property Power of Attorney, Health Care Power of Attorney, or Health Care Proxy?
Who are the beneficiaries of my Life Insurance Policy, Pension and any other stocks, bonds and other assets?

Until Next Time,

Helen M. Dukhan, Esq., LL.M. @ www.dukhanlaw.com

PERMISSION TO CHEAT AND PRENUPS

A Couple of Interesting Topics:

First, suing someone because they gave you permission to cheat?

Upper West Side couples counselor Jeffrey Mechanic is being sued by two of his former clients who claim he almost ruined their marriage. He told one of the spouses to have an affair because that spouse was not satisfied at home. The most amazing thing is that the spouse actually had an affair. Now some individuals may agree with the counselor and his belief that if you are unsatisfied at home you should have an affair rather than Divorce your spouse. The counselor’s advice may have even saved certain marriages. One of his former clients states, “he encourages people to have affairs. He makes people feel it’s O.K. He gives them permission to do it.” I mean really?!? Individuals who have serious medical illnesses typically get more than one doctor’s opinion before proceeding with a treatment. Why would any one going to a couple’s counselor who tells them to have an affair not do the same thing before choosing what is right for them to save their marriage.

The real issue here, though, is not whether the counselor gave bad advice, but it is whether a couple should be able to sue a counselor for his prescription if at the end of the day you chose to listen to that counselor. After all, have we forgotten that people have free will and are expected to know the difference between right and wrong?

Second, waiver of interests in retirement assets enforceable within a prenuptial agreement:

In the past, a provision in a prenuptial agreement waiving one’s interest in certain retirement rights was unenforceable. In Richards v. Richards (232 AD2d 303, 303 [1996]), the court had found that under the Employee Retirement Income Security Act 'only a spouse can waive spousal rights to employee plan benefits, that a fiancé(e) is not a spouse, and that such rights, therefore, cannot be effectively waived in a prenuptial agreement.' Therefore, because such rights could only be waived by a “spouse”, if one fiancé(e) wished for the other to waive their interest in such retirement rights they would have to have had a prenuptial agreement and a post-nuptial agreement waiving said rights.

Now, the first department in New York (Manhattan), found, in an opinion by Justice
Andrias, that the parties' prenuptial agreement contained an enforceable waiver of defendant wife's interest in the marital portion of plaintiff husband's retirement assets. Strong v Dubin,--- N.Y.S.2d ----, 2010 WL 1905004 (N.Y.A.D. 1 Dept.).

Judge Andrias pointed out that Prenuptial agreements addressing the ownership, division or distribution of property must be read in conjunction with Domestic Relations Law 236(B), which provides that, unless the parties agree otherwise in a validly executed prenuptial agreement pursuant to section 236(B)(3), upon dissolution of the marriage, marital property must be distributed equitably between the parties, while separate property shall remain separate (see Domestic Relations Law 236[B] [5][a]-[c]). Therefore, the court is distinguishing now between pension benefits as marital property and survivorship rights, which Richards v. Richards above failed to do. So, now a couple can waive pension benefits in a prenuptial agreement; however, survivorship benefits must still be left for a post-nuptial.

Until Next Time,


Helen M. Dukhan, Esq., LL.M. @ www.dukhanlaw.com