In the last few years there have been some changes to Florida Statutes. Well, there are tons of changes every year, but the ones we’re talking about deal specifically with what happens to your beneficiary designations upon divorce. Beneficiary designations are a purely contractual agreement between the owner of a life insurance policy, bank account, or brokerage account. We recommend these as simple, inexpensive ways to keep some assets outside of probate.
How do married couples use beneficiary designations?
More times than not, former spouses draw the most ire. Whatever it was the convinced them to divorce, former spouses usually can’t stand each other. Could you imagine a messy divorce, then the wife getting remarried and forgetting to change her beneficiary designations? Her new spouse would get nothing and the former spouse would be entitled to the account!
Wills are a little bit different, right? Not really. The old rule was the same: “Well, if they didn’t want that person to take under the Will, they would’ve changed it.” Now, with the statutory changes, Florida along with many other states, has adopted a system that makes sense.
The English version is this: When you name your spouse to receive a transfer upon death and then subsequently divorce, your spouse is treated as having died before you for the purposes of that transfer. There are a couple of exceptions, so it’s a good idea to call a probate attorney or an estate planning attorney to find out what you need to do.
Challenges to the latest law.
Some recent challenges to constitutionality have been testing the validity of these laws. None of those cases have been Florida cases, but the statute should hold up here. That doesn’t mean a bad decision can’t cause your assets to go to your former spouse if someone sues- just look at Whirlpool Corp. v. Ritter, 929 F.2d 1318, 1322-1323 (8th Cir: 1991). You can read a detailed treatment of the constitutionality of Florida’s statute, as well as how those challenges have fared in other jurisdictions here.
Contact us today for a free consultation to review your estate plan if you are going through a divorce.
The best thing you can do is call your estate planning attorney, or a probate lawyer (we handle both of those here in Florida). Get your documents and designations updated. This will give you the predictability of knowing who you’re taking care of, and how, after you pass away.
If you think someone’s changed a beneficiary designation that was supposed to remain in favor of you as a former spouse, whether that requirement was part of a divorce decree, divorce settlement agreement or some other written agreement, you should contact us today.
Also, remember it’s much more efficient and cost effective to call us before there’s a problem, instead of hiring us to untangle a problem that’s already reared its ugly head. Contact our office today to schedule a free consultation.