Separation, unlike divorce itself, poses unique estate planning prob- lems because living separate and apart does not in and of itself create a situation where the estranged spouse would be unable to file an elective share. Elizabeth Edwards, wife of Senator John Edwards of North Carolina, passed away on December 7, 2010. She was sepa-rated, but not yet divorced at the time of her death. The press carried articles about her new pour-over will completed just six days before her death that did not include her adulterous husband. The bulk of her estate was contained in a revocable living trust, which essentially means everything in her estate is not public record and therefore we have no idea where her assets will go, but waiting so close to the end does leave the door open for someone cut out of the new will to contest both the will and any last min-ute changes to her trust by questioning her competency.
In South Carolina until the divorce decree is signed by the judge and filed with the clerk of court, it is not finalized and therefore up until that moment a spousal elective share (1/3 of the probate estate) can still be successfully claimed. To eliminate this possibility some couples work out written separation agreements that clearly define how the marital assets will be divided, what are personal (non-marital) assets, and expressly state that each spouse is free to dispose of their personal assets and his or her share of the marital assets. Under federal and state law your ex-spouse is automatically removed from your will when you divorce, but this is not true of named beneficiaries on life insurance policies and other contractual documents.
BUT BE VERY CAREFUL because a family court order may restrict retitling and/or the dis-posal of assets. Also taking certain financial actions just prior to filing for separate maintenance and support or a divorce may trigger some unpleasant and unexpected recourse in family court.
Nevertheless, I recommend changing your will, financial power of attorney and health care power of attorney immediately. You may consider adding a no challenge clause to your will. When appropriate and after consultation between your estate planner and divorce attorney, you may also want to change beneficiaries on those assets that are payable on death, such as an IRA, life insurance policy or bank account. This assures that the asset does not pass through the probate estate in the event of an untimely death.