Arizona is one of a few states that has adopted a statute that automatically invalidates a newly divorced spouse as the beneficiary under his or her former spouse’s will or insurance policy. The statute is A.R.S. 14-2804 and it also operates to invalidate the provisions of a Joint Tenancy Deed with Right of Survivorship converting it, instead, to a Tenancy in Common between the former spouses. The general rule is that if your spouse could remove you as a beneficiary or joint tenant, A.R.S. 14-2804 presumes that your spouse wishes this to be done and accomplishes it automatically–without notice to you.
This, on its face, sounds good. After all, who would want to continue a former spouse as the beneficiary on a life insurance policy or as a beneficiary under their will? In actual practice, however, this is not uncommon. Life insurance is often continued to provide for a former spouse and children of the marriage. A former spouse can be named as a beneficiary under estate planning documents for the same purpose.
Many people assume, as is the practice in many states, that their beneficiary choices will continue until deliberately changed by them and that a Joint Tenancy Deed will insure that their surviving joint tenant inherits the entire property.
But this is not always true in Arizona. Discovery of the problem usually comes after a death when it is too late to fix it. An unintended and disastrous estate planning result can happen. A totally unsuitable person can end up owning or in control of substantial assets intended for another.