Estate Planning During Divorce: What You Can (and Can’t) Do Before the Settlement Is Final

• Section 18A of the Wills Act 1837 only triggers on the final divorce order, so your spouse still inherits under the existing will until that date.
• You can write a new will at any time during divorce proceedings without your spouse’s consent or court approval.
• The inheritance tax spouse exemption under Section 18 IHTA 1984 applies until the marriage legally ends.
• Pension and life insurance beneficiary nominations are not revoked by divorce and must be updated separately.
• Joint tenancies pass by survivorship until severed by written notice, regardless of divorce status.

Separation has no legal effect on your will under English and Welsh law. Your spouse remains a beneficiary, an executor where appointed, and entitled to inherit until the final divorce order is issued. Section 18A of the Wills Act 1837 treats a former spouse as if they had died on the date the marriage ended, but the rule only triggers on the final order.

Under the Divorce, Dissolution and Separation Act 2020, the gap between filing and the final order typically runs 12 to 24 months. If you die during that window, your estranged spouse inherits as the will provides. Without a will, the intestacy rules give a surviving spouse a statutory legacy of £322,000 plus half the remainder, valid as of the 2026 to 2027 tax year.

The inheritance tax spouse exemption under Section 18 of the Inheritance Tax Act 1984 covers unlimited transfers between spouses until the final divorce order. Once the marriage ends, the exemption falls away and any later transfer is treated as a Potentially Exempt Transfer (PET) subject to the seven-year rule.

According to HMRC guidance, transfers made after the final order pursuant to a court order remain IHT-exempt, provided there is no gratuitous intent. The post-April 2025 long-term resident rules cap the exemption at the prevailing nil-rate band, £325,000 as of 2026/27, where one spouse is not a long-term UK resident.

Several estate planning decisions sit entirely within your own control during separation, regardless of where the financial proceedings have reached. These steps do not need your spouse’s signature or court approval, and they take effect the moment the relevant paperwork is properly executed.

You can write a new will and revoke the old one. You can update or revoke pension and life insurance beneficiary nominations directly with the provider. You can sever a joint tenancy by serving written notice on your spouse, so your share passes under your will rather than by survivorship. You can revoke any Lasting Power of Attorney (LPA) appointing your spouse and register a new one. Under Section 13 of the Mental Capacity Act 2005, dissolution ends the appointment by default, but only on the final order, so active revocation is the safer route.

If you die before the final divorce order, your estate passes under your existing will, or under intestacy as if the marriage were intact. Joint property passes by survivorship. Pension and life policy nominations pay out as written. The spouse exemption still applies, so anything passing to your spouse remains free of inheritance tax.

A separated spouse also retains the right to bring a financial provision claim under the Inheritance (Provision for Family and Dependants) Act 1975, even where the will excludes them. A new will, severed joint tenancies, and updated nominations are the only reliable controls.

Most people wait until the divorce is final before updating their estate planning. That is the most expensive mistake in the timeline. The 12 to 24 months between separation and the final order is the exact period in which the old will, joint tenancies, and stale nominations all keep operating at full strength.

19 out of 20 Bluebond clients legitimately pay zero inheritance tax. None get there by leaving will-writing, severance, and nominations until the final order. The planning window is the separation period, not the post-divorce reset.

Each step below can be completed without your spouse’s agreement and runs alongside the financial proceedings. The supporting framework sits on Bluebond’s Wills & Estate Planning expertise page.

1. Draft a new will with substitute beneficiaries, alternate executors, and a guardian for any minor children.
2. Update beneficiary nominations on every pension, life policy, ISA, and death-in-service scheme.
3. Confirm whether the family home and any investment property are held as joint tenants or tenants in common.
4. Serve a notice of severance on joint tenancies and register the restriction at HM Land Registry.
5. Revoke any LPA appointing your spouse and register a new one with the Office of the Public Guardian.
6. Check the inheritance tax position on planned transfers under the 2026 to 2027 spouse exemption rules.
7. List non-matrimonial assets (pre-marriage wealth, inheritances, gifts) and document their origin.

• Transferring matrimonial property to family members or trusts to defeat a financial claim. The court can reverse it under Section 37 of the Matrimonial Causes Act 1973.
• Assuming the conditional order ends the marriage for estate planning purposes. It does not.
• Relying on Section 18A of the Wills Act 1837 to remove a former spouse before the final order is issued.
• Leaving joint bank accounts unchanged. Either spouse can withdraw the full balance at any point during separation.
• Treating beneficiary nominations as updated automatically by divorce. Pension and life insurance nominations remain valid until you change them.

Writing a new will, updating beneficiary nominations, severing joint tenancies, and revoking an outdated LPA can all be done now, without your spouse’s consent and without affecting the financial settlement.

You should carry out a review of how your assets are held and structured to highlight potential tax savings.

You should engage with a firm that can give you financial planning, tax advice, legal advice and accountancy advice under one client relationship, with regulated financial advice referred to our independent FCA-authorised partner firm and legal drafting handled by qualified solicitors employed within our business.  

You should work with advisers who coordinate financial planning, tax advice and legal work under one client relationship — with clear disclosure of who is regulated for what. Bluebond Tax Planning Ltd provides tax planning and coordination only; any advice on your investments, personal pension or annuity is FCA-regulated and referred to our independent partner firm — no company in the Bluebond group is FCA-authorised or an SRA-authorised law firm. Individual outcomes depend on personal circumstances and cannot be guaranteed.

For how these steps fit into an inheritance tax mitigation strategy, the Bluebond free inheritance tax planning webinar covers the framework, and the Holistic Wealth Guidance Report provides a personalised review for £797.

Divorce law and matrimonial finance issues are legal-services matters that should be handled by a family law solicitor. Any change to pension beneficiary nominations is an FCA-regulated advice question — we can introduce our independent partner firm. Bluebond’s role is the coordinating tax planning and estate structuring.

Disclaimer. The information in this article is general in nature and does not constitute personal financial, tax, or legal advice. UK tax legislation changes frequently, and the specific application of any rule or strategy depends on individual circumstances. Figures, thresholds, and reliefs mentioned are correct as of the 2026 to 2027 tax year unless otherwise stated. Before acting on any information here, consult a qualified adviser who has reviewed your full situation. Bluebond Tax Planning provides personal recommendations only under a signed client agreement, following a full review. Bluebond Tax Planning operates under UK legal frameworks and recognised professional conduct standards. Tax planning and legal work are not FCA regulated.