Don’t Let Your Ex Get Your Money. A Recent Court Decision May Allow Your Ex to Get Your Money!

A Minnesota Estate Planning Lawyer Explains a Recent Court Decision Affecting the Life Insurance Proceeds for  Divorced Couple

A recent decision by the U.S. Court of Appeals for the Eighth Circuit should cause anyone who has been divorced scrambling to ensure his or her beneficiaries are property listed on life insurance or retirement accounts. Namely, be sure your ex-spouse is NO LONGER listed as a beneficiary.

The Eight Circuit just struck down a Minnesota law automatically removing an ex-spouse from being listed as a beneficiary on a life insurance policy in a situation where the divorce took place before the law was enacted.

The Facts

Mark Sveen purchased a life insurance policy from Metropolitan Life Insurance Company (“MetLife”) in 1997 and married Kaye L. Melin later that year. A year later, Mr. Sveen named Ms. Melin as the primary beneficiary of the life insurance policy and his two adult children as contingent beneficiaries. Ms. Melin and Mr. Sveen divorced in 2007.

Mr. Sveen failed to remove Ms. Melin from his insurance policy so that when he died in 2011, Ms. Melin still was the primary beneficiary on the policy. MetLife asked the court to determine who should receive the proceeds of the policy between Mr. Sveen’s children and his ex-wife.

The Law

In 2002, Minnesota amended its probate code to state that the dissolution or annulment of a marriage revokes any revocable … beneficiary designation … made by an individu