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Estate Planning After Divorce in Minnesota: What to Update and Why

Divorce changes nearly every aspect of an estate plan. Documents drafted to protect a spouse and provide for a shared family must be rewritten to reflect a fundamentally different set of relationships, obligations, and goals. While Minnesota law provides some automatic protections after divorce, those protections are incomplete. Failing to update documents can result in assets passing to an ex-spouse, the wrong person making medical decisions, or children being left without adequate financial protection.

What Minnesota Law Does Automatically

Minnesota provides a statutory safety net through Minn. Stat. Section 524.2-804, which automatically revokes certain provisions in favor of a former spouse upon divorce or annulment. Understanding what this statute covers, and what it does not, is essential.

Provisions That Are Automatically Revoked

Under Section 524.2-804, a divorce automatically revokes:

After revocation, the estate plan is read as if the former spouse predeceased the divorcing spouse. This means alternate beneficiaries, successor executors, and backup agents step into the former spouse’s role.

Critical Limitations

The automatic revocation has significant gaps:

Documents That Must Be Updated

Last Will and Testament

Even though Minnesota law revokes provisions favoring a former spouse, a will drafted during a marriage rarely serves the needs of a newly single person. The entire distribution scheme, fiduciary appointments, and guardian designations should be reconsidered.

A new will should address the distribution plan (for parents of minor children, this often means creating trusts to manage assets until children reach an appropriate age), executor appointments (the former spouse was likely named), and guardian designations for minor children. The non-custodial parent retains priority if the custodial parent dies, but if both parents die, the guardian named in the will controls.

Revocable Living Trust

If the estate plan included a revocable living trust, the trust agreement must be amended or restated as an individual trust. Joint trust provisions that benefit the former spouse are no longer appropriate, and distribution provisions should be restructured to provide for children through a trustee rather than through the former spouse.

Power of Attorney

A power of attorney naming the former spouse as agent is automatically revoked by divorce under Minn. Stat. Section 524.2-804. However, the underlying document still exists and may cause confusion if presented to a financial institution or government agency that is unaware of the divorce.

A new durable power of attorney should be executed promptly, naming a trusted individual as agent.

Healthcare Directive

Minnesota’s healthcare directive statute (Minn. Stat. Section 145C) allows individuals to appoint a healthcare agent and document treatment preferences. If the former spouse was named as healthcare agent, a new directive should be executed immediately. Healthcare decisions can arise without warning, and a gap in coverage could result in the former spouse being contacted for medical decisions or no one having clear authority to act.

Beneficiary Designations

This is the single most time-sensitive update after a divorce. Beneficiary designations on the following accounts and policies should be reviewed and changed as soon as the divorce decree is entered:

The key is to complete all changes as quickly as possible after the divorce is final.

QDROs and Retirement Accounts

A Qualified Domestic Relations Order (QDRO) divides a retirement plan between divorcing spouses as part of the divorce settlement. After a QDRO is processed, the remaining balance in the account holder’s name needs updated beneficiary designations. Failing to implement a QDRO promptly creates risk — if the account holder dies before the QDRO is processed, the former spouse may need to make a claim against the estate rather than receiving their share directly from the plan.

Life Insurance Considerations

Divorce decrees frequently require one or both spouses to maintain life insurance for the benefit of minor children. The custodial parent should consider owning the policy (or being named as an irrevocable beneficiary) to prevent the non-custodial parent from canceling or changing it. These obligations do not enforce themselves — the beneficiary spouse should receive proof of coverage annually.

Beyond the decree’s requirements, a newly single parent should evaluate their own life insurance needs. Without a spouse to provide backup income, the financial impact of a single parent’s death is more severe.

Child Custody and Guardian Designations

Divorce does not eliminate the need for guardian designations in a will. If the custodial parent dies, the non-custodial parent generally has a superior right to custody under Minnesota law. But if both parents die, the guardian designated in each parent’s will controls. And even if the other parent gains custody, a trust can manage the child’s inheritance with an independent trustee, ensuring the funds are used for the child’s benefit rather than being commingled with the custodial parent’s finances.

Coordinating with the Divorce Decree

The estate plan and the divorce decree must be consistent. The estate plan must reflect any obligations to maintain insurance or retirement benefits, account for property settlement terms that require certain assets to pass to the former spouse, and provide for the continuation of financial support for children even after the paying parent’s death.

An experienced estate planning attorney can review the divorce decree and build an estate plan that fulfills its obligations while advancing the client’s independent planning goals. The intersection of divorce law and estate planning law is technically demanding, and the consequences of miscoordination fall on the people who can least afford it: the children.