The recent deaths of fashion designer Kate Spade and celebrity chef Anthony Bourdain were horribly tragic. They also provide an important lesson in the impact of failing to divorce when it comes to death and money.
At the time of their passing, both Spade and Bourdain were separated from their spouses. As highlighted in the recent Forbes’ article, "Kate Spade, Anthony Bourdain And Estate Planning When You Are Separated," there is a world of difference between separated and divorced couples upon death.
If Spade and Bourdain had gotten divorces, then their spouses would not be entitled to any portion of their estates. Even if the celebrities had not changed their wills and the spouses were still included in the estate plan, they would be constructively written out by a court. However, that does not happen when a couple is separated.
A separated spouse of the deceased retains full rights of a spouse to the estate. If there is no estate plan, the spouse will normally receive the entire estate through the laws of intestate succession. If there is a will or trust, then the spouse receives anything the documents says he or she gets. However, if the separated spouse is disinherited or receives a minimal inheritance, then the spouse can elect to take his or her spousal elective share (the amount of which varies between states).
While I certainly do not know Spade and Bourdain’s situation, many people choose to separate instead of divorce without fully considering the legal repercussions. In addition to the estate inheritance rules, separated spouses generally remain liable for each other’s debts including taxes and health bills. Moreover, assets of even a long-separated spouse can prevent one from being eligible for Medicaid coverage of long term care costs. Therefore, it is important to consider the legal ramifications of choosing to delay or forego divorce.