During your lifetime, you and your spouse have worked hard to build your wealth, plan your future, and create a solid estate plan. However, nothing in life is ever definite and many things change. This is why it is important to keep your estate plan updated as often as possible. One thing that can severely impact your estate plan is if you and your spouse divorce. In Minnesota, the court will make an equitable division of your marital property. There are some things you should keep in mind to protect your estate during your divorce.
First, keep in mind that there are particular rules about what you can and cannot change regarding your estate after the divorce has been filed. One of the most relevant is you cannot change the beneficiaries on your insurance policies, including your life insurance policies. Moreover, if you share minor children with your spouse, the court is likely to make a specific order about the amount of life insurance you must carry while your child is still a minor. Once you are allowed to do so by the court, you need to reexamine your beneficiaries named on your insurance policies and make sure they are updated.
Although you are not permitted to change the beneficiaries on your life insurance policy, you can update your will at any point, even after the divorce has started. Keep in mind that leaving all of your property to someone other than your spouse will not strip the court of its ability to divide marital property. After your divorce is completed, you should ensure to update your will once again to make sure that the assets listed in your last will and testament accurately reflect the assets that are still in your possession.
You may also want to consider creating a trust. With a trust, you can transfer certain assets to the trust, and provide instructions to a trustee on how you want the trust administrated. With some types of trusts, you can act as both the trustee and the beneficiary of the trust. Remember, however, that transferring property into the trust will not mean that your spouse will be divested of any interest in those assets. The property can still be divided by the court. Moreover, if you transfer the property in an effort to keep your spouse from receiving property that he or she is rightfully entitled to, the court can sanction you in addition to making sure your spouse still receives his or her equitable share.
We can help you with a wide variety of issues including both divorce and estate planning. Call us at 651-413-9568 for a consultation to talk about your assets and what we can do for you.