Divorce and Your Estate Plan

June 26, 2023

The last thing a person wants to do after getting divorced is spend more time with a lawyer. But updating an estate plan after divorce is crucial. In Minnesota, when a dissolution is granted a former spouse’s interest in the ex-spouse’s will is terminated as if the ex-spouse had died one day prior to the Judge signing the divorce decree. This also applies to revocable living trusts: any interest or ability that an ex-spouse has to manage the revocable living trust is terminated as if he or she had died.

However, this only applies to a former spouse, not anyone else. For example, if a will grants “one-half to my wife’s heirs-at-law” the former wife’s heirs still have a one-half interest in the estate. This is precisely the outcome of In the Matter of the Estate of Matthew Joseph Tomczik. While the couple did not have children, Tomczik’s ex parents-in-law received half of his estate upon his death. This case is currently being reviewed by the Minnesota Supreme Court but for now this is a precedential opinion that judges in Minnesota must follow. It is important to note that Minnesota is unique. Minnesota has adopted much of the Uniform Probate Code, such as the provision which revokes devises to a former spouse, but not all of it. In 1990 the Uniform Probate Code expanded the devise revocation to a former spouse to also include revoking devises to relatives of former spouses. Minnesota has not adopted this part of the Uniform Probate Code.

Beyond testamentary documents, a divorce has other far flung financial ramifications. In another recent case, a Minnesota man’s ex-wife died in 2019 and he sought her 401(k) worth $600,000.00. Their marital termination agreement, signed in 2002, granted wife all right, title, and interest to her 401(k); however, she never changed him as the listed beneficiary on the account. The district court originally ruled that the 2002 agreement was ambiguous and did not state clearly whether it was wife’s intent that her husband be a beneficiary of the account. This is now back in front of the district court for further review. Clearly expressing your intent across all of your affairs is necessary to protect your intentions and your heirs interests.

It is also important to revisit any power of attorney decisions. In Minnesota, an otherwise valid power of attorney is automatically terminated if the power is granted to a spouse and proceedings commence for dissolution, legal separation, or annulment of marriage. Again, it is important to note that this only applies to spouses, not other family members. For example, if a spouse has power of attorney for an elderly family member it will not automatically terminate when the divorce process begins.

As with any legal document, an estate plan’s language is crucial. It is critically important to update an estate plan after any large life event, especially a divorce. But simply updating your will isn’t enough to safeguard your estate. You must take action across all of your accounts and interests to protect your estate, and the people you want to benefit.