Disempower Your Ex-Spouse

In the past two blogs I addressed a law in New York that provides for the revocation upon divorce of dispositions to a former spouse under a will as well as beneficiary designations found in life insurance policies and retirement accounts. This same law also applies to the designation of your spouse as your Health Care Proxy or Power of Attorney. But that does not mean there is nothing you need to do.

A Health Care Proxy appoints someone to make decisions about your medical care if you are unable to make them yourself while a Power of Attorney allows someone to write checks from your bank accounts in order to pay your bills. This power also often allows the appointed person to manage your money and buy and sell your property.

The new law specifically protects third parties (banks, hospitals) from liability unless and until they receive written notice of the divorce. This means that your ex could go to your bank and, using his or her existing Power of Attorney, withdraw all the money from your account and the bank would not be liable to repay you!

So what do you do? My recommendation is that you revoke any existing Powers of Attorney or Health Care Proxies as soon as you and your spouse have decided to end your marriage and notify all appropriate parties.

A Health Care Proxy is not a problem once it is revoked since your new agent will step up and make any required decisions so there is no need to notify the local hospitals. However, you should immediately provide all of your banks or other financial institutions with written notice of the revocation of the Power of Attorney.  And make sure that the notification is sent certified mail, return receipt requested, so you can prove that the bank/financial institution was notified.

While most of my mediation clients would not use such tactics to take advantage of a former spouse, it is still a good idea to take care of these matters before you lose track of them. And knowing what has to be done and how to do it is the first step.

Does anyone out there have any other thoughts on how to protect yourself from an abuse of power by an ex-spouse?

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