When going through a divorce, updating your estate plan might not be the first thing on your mind. However, the recent case of In the Matter of the Estate of Michael D. Jones, Deceased (Docket No. A-28-23 (2025)) highlights why reviewing beneficiary designations and financial assets post-divorce is essential. This case demonstrates how failing to protect assets after divorce can lead to unintended consequences, including an ex-spouse receiving assets that may have been meant for someone else.

The Case: A Costly Oversight

Michael Jones purchased U.S. savings bonds while married to Jeanine Jones, naming her as the pay-on-death beneficiary. After their divorce, their settlement agreement detailed financial obligations and property division but did not explicitly address these savings bonds. When Michael passed away, Jeanine redeemed the bonds, valued at approximately $77,800. At Michael’s death, he still owed Jeanine $90,000 as a part of the settlement agreement, and his Executor was obligated to use Michael’s estate assets to pay it.

Michael’s daughter, Shontell Jones, acting as the administrator of his estate, argued that the proceeds from the savings bonds should count toward the $90,000 settlement Michael owed Jeanine per the divorce agreement. Initially, the trial court ruled in favor of the estate, treating the bonds as part of the settlement. However, the Appellate Division reversed the decision, and the New Jersey Supreme Court affirmed that the bonds belonged to Jeanine because she was the named beneficiary listed on them and the settlement agreement did not explicitly address these bonds.

What This Case Means for Divorced Individuals

This case underscores the importance of reviewing and updating your Last Will and Testament, Trust Agreements, and beneficiary designations to protect your assets after divorce. Here are key takeaways:

1. Beneficiary Designations Override Divorce Agreements: Many people assume that a divorce automatically removes an ex-spouse from their estate plan. However, financial assets such as life insurance policies, retirement accounts, and savings bonds operate outside of a will and are governed by beneficiary designations. If these are not updated, an ex-spouse may still inherit the asset—even if your will or divorce agreement says otherwise.

2. A Divorce Agreement Must Explicitly Address All Assets: Michael and Jeanine’s settlement agreement covered many financial aspects but did not specifically mention the savings bonds. Because of this omission, the court determined that Jeanine’s right to the bonds remained intact. If you are going through a divorce, ask your family law attorney to review your financial assets, including beneficiary designations, and explicitly discuss whether these should be changed or maintained before signing your settlement agreement.

3. Regularly Review Your Estate Plan: Life changes—divorce, remarriage, the birth of children, or even financial gains or losses—should prompt a review of your estate plan. It is essential to update your will, trusts, beneficiary designations, and powers of attorney to reflect your current wishes. Had Michael met with an estate planning attorney after his divorce, he could have addressed this issue while he was alive and had the opportunity to cash the bonds himself.

How to Protect Yourself

If you are divorced or in the process of divorcing, take the following steps to ensure your estate plan aligns with your intentions:

• Review and update all beneficiary designations on life insurance policies, retirement accounts, bank accounts, and investment portfolios.
• Amend your will and trust documents to reflect new beneficiaries and any obligations from the divorce settlement.
• Work with an estate planning attorney to ensure all financial and legal documents are aligned and enforceable.
• Understand how state and federal laws apply to your specific situation, especially when it comes to financial accounts governed by federal regulations.

Final Thoughts

The Estate of Michael D. Jones case is a cautionary tale about the importance of proactive estate planning to protect your assets after divorce. By taking the time to review and update your estate plan, you can prevent legal battles, protect your assets, and ensure that your wishes are carried out as intended.

If you have recently divorced or haven’t updated your estate plan in years, now is the time to act. Contact our office today to review your estate plan and secure your financial future.

The case discussed here, In the Matter of the Estate of Michael D. Jones, Deceased (Docket No. A-28-23 (2025)), is an unreported decision. While not binding precedent, it provides an insightful example of how estate planning issues can unfold after a divorce.