4 At Moss & Barnett, our estate planning and family law attorneys work closely to address issues that may arise before or after marriage. Without this coordination among advisors, issues can be overlooked resulting in unintended, often negative consequences for the client. Two recent decisions – one by the United State Supreme Court and one by the Minnesota Supreme Court – underscore the importance of this collaboration. Automatic Revocation of Beneficiary The first case involved a challenge to a Minnesota law that automatically revokes any beneficiary designation made in estate documents to the former spouse, Minn. Stat. § 524.2-804, subd. 1 (2016) (the “revocation-upon-divorce statute”). What is more, this dispute went all the way to the United Supreme Court – highlighting the importance of updating the core estate plan, but also beneficiary designations, following a marital dissolution. In Sveen v. Melin, 138 S.Ct. 1815 (2018), the Court ruled that this law does not violate the contract clause of the Constitution. After Mark and Kaye married, Mark bought a life insurance policy naming Kaye as the primary beneficiary, designating his two children from a prior marriage as contingent beneficiaries. In 2002, Minnesota adopted its revocation-upon-divorce-statute. After ten years of marriage, the couple divorced. Mark did not update the beneficiary designations on his life insurance policy, and the divorce decree did not specifically address this policy. Four years later, Mark died, the revocation-upon-divorce statute automatically revoked Kaye’s beneficiary status, and the two children became the primary beneficiaries. Kaye objected that the revocation unconstitutionally impaired Mark’s contract rights in the insurance policy. As judiciously noted by the Supreme Court, “All good trust-and-estate lawyers know that “[d]eath is not the end; there remains litigation over the estate.” Litigation is exactly what occurred. The insurance company filed an interpleader action with the district court to determine whether the revocation statute applied. The two children won in the trial court, but the U.S. Court of Appeals for the Ninth Circuit reversed the district court, holding that the revocation-upon-divorce statute impermissibly impaired the contract because it was enacted four years after the policy took effect. The U.S. Supreme Court, in an opinion by Justice Elena Kagan, noted that while the statute did change the beneficiary designated by the policyholder, someone who gets divorced does not usually want to have their former spouse remain as the beneficiary while pointing out that if a policyholder wants to keep a former spouse as the beneficiary following a divorce, he or she simply needs to notify the insurance company and update a form. Thus, the law falls within the “minimal paperwork burden” that the Supreme Court has allowed other laws to impose without violating the contracts clause. This case highlights the importance of updating one’s estate plan following major life events such as a divorce. Beneficiary designations are often overlooked in the dissolution process, and the failure to properly update your beneficiary designations may result in unintended distributions. It is imperative that the family law attorney coordinate with an estate planning attorney to ensure not only that the client’s wishes are met, but also that the client is adhering to the terms of the dissolution. Enforceability of Premarital Agreements Minnesota’s highest court recently weighed in on the enforceability of premarital agreements (or “antenuptial agreements”) that apply to property accumulated after marriage (“marital property”). In Kremer v. Kremer, 912 N.W.2d 617 (Minn. 2018), the Recent Supreme Court Decisions Highlight Need for Estate Planning and Family Lawyers to Collaborate By Jana Aune Deach | 612.877.5305 | Jana.Deach@lawmoss.com - and - Susan A. King | 612.877.5362 | Susie.King@lawmoss.com Recent Supreme Court Decisions Highlight Need for Estate Planning and Family Lawyers to Collaborate - Continued on Page 5 Jana Aune Deach practices exclusively in the area of family law. She assists clients in matters including child support, custody settlement and litigation, premarital agreements, spousal maintenance, complex non-marital tracing, complex property division, and settlement negotiations. Visit: LawMoss.com/jana-aune-deach Call: 612-877-5305 Email: Jana.Deach@lawmoss.com Susie King is a member of our wealth preservation and estate planning team focusing her practice in the areas of estate planning, probate, trust, guardianship / conservatorship, and elder law. Her experience covers a broad range of services from the simple estate plan to administration of complex estate or trust matters. Visit: LawMoss.com/susan-a-king Call: 612-877-5362 Email: Susie.King@lawmoss.com