Divorce-Now What?

Once the divorce decree is final, many people assume that things are all set.  But not so fast. There are a few housekeeping details that should be attended to, to make sure your family and loved ones are properly taken care of, if you are no longer around.  Here is a checklist of steps to take to protect the ones that are important to you:

1. Update Your Will.    If you have minor children, the other surviving parent will have priority to be the guardian in the event of your death.  However, you will need to appoint another individual(s) to serve in the capacity of legal guardian in the event that both parents are deceased or otherwise unavailable, while your children are still minors.  You will also need to appoint a personal representative other than your former spouse.  The personal representative is typically a short-term position: pays outstanding bills and taxes and distributes assets pursuant to the Will.  Finally, you should review the trustee and custodian appointments for any trusts or other financial accounts for minor children.  It may not be appropriate to name your former spouse as the trustee or custodian of these accounts.

2.  Other Trusts.   Divorce revokes trust provisions naming the former spouse as beneficiary.  Although the former spouse is treated as if he/she were deceased, you will want to review those documents to confirm how the assets of those trusts will pass, following the divorce or separation.

3. Retirement Accounts & Life Insurance.  Review your beneficiary designations on all of your IRA's and your 401K's and other retirement plans, as well as the beneficiary designations on your life insurance policies. This is particularly important because these financial institutions are not interested in researching the marital status of policy owners and their designated beneficiaries, prior to distribution of account proceeds, following a death.  They only look to the stated beneficiary on their Beneficiary Designation forms!!

4. Power of Attorney.  You will need to appoint a new attorney-in-fact.  A divorce or separation automatically terminates the appointment of a former spouse as attorney-in-fact, and the power-of-attorney is useless.

5. Health Care Directive.  You will also need to appoint someone other than your former spouse as your "proxy" for health care decisions, in the event you are unable to make those decisions yourself.  As with the Power of Attorney, divorce or separation will revoke the appointment of a former spouse.

Updating these documents is important, as these documents deal with issues that are very personal and important to you, and are not necessarily addressed in the dissolution or separation documents.  Be certain to take care of these important details!!!

Is a Probate Proceeding Necessary?

If a person dies in Minnesota owning assets valued at more than $50,000, in their own name with no beneficiary designation, a probate proceeding will be required to properly distribute these assets to the beneficiaries.   If there is a Will, the assets will be distributed according to the terms of the Will.  If there is no Will, the assets will be distributed according to the intestacy statutes of Minnesota.  In either case, a probate proceeding will be necessary.

However, the expense of a probate proceeding can be avoided with a little planning.  For example, if a bank account is changed from a sole account to a joint account, the asset will pass to the other joint account owner upon death of either of the owners, without need for a probate proceeding.  Real estate can be held as joint tenants with right of survivorship, which will provide that upon death of one joint tenant the property is owned by the surviving joint tenant. The surviving joint tenant simply files an Affidavit of Survivorship with the county recorder of the county where the property is located.   Before choosing these non-probate transfers, the individual should be certain that titling these assets in this way reflect their wishes.

Estate Planning- What is it, and Who needs it?

What is it?  Estate planning is the process of preparing and executing documents which will transfer your assets at your death to the individuals and organizations you wish to receive them.  The process often includes preparing Powers of Attorney, Health Care Directives, and Deeds to real property.
Powers of Attorney: Authorizes another individual (or more than one) to execute financial documents on your behalf.
Health Care Directives: Authorizes another individual (or more than one) to make medical decisions on your behalf, and outlines your wishes regarding what you consider appropriate health care.
Deeds: Transfers real estate according to your wishes.  Although these deeds are signed and notarized at the present time, they may not be recorded until after your death or disability.

If you own assets in your sole name, with no beneficiary designation, you will also need a Will, or Revocable Trust to properly transfer those assets according to your wishes. In Minnesota, if you do not have a Will or Revocable Trust, this property will be distributed according to the Minnesota laws of intestacy.  This may or may not be how you wish to have your property distributed.   If you have minor children, a Will appoints guardians for these minor children in the event both parents pass away while the children are minors.


Who needs it? Anyone who wishes to provide that financial issues, real estate issues,  and health care issues are properly handled,  regardless of what the future holds- to the greatest extent possible!