Florida law has for some time provided that, subsequent to a divorce, a former spouse is to be treated as predeceased for purposes of a will or revocable trust. In other words, any provisions in a will or revocable trust for the benefit of an individual’s former spouse would be invalidated and the assets subject to those provisions would not pass to the former spouse.
Consequently, if a married couple left their respective estates to one another under their estate planning documents and, subsequently, they divorced and one spouse died without changing his or her estate planning documents, the surviving former spouse would not inherit under the deceased former spouse’s will or revocable trust.
However, certain assets pass outside of wills and revocable trusts (often called “non-probate assets”), including assets with beneficiary designations, and there was no Florida law to affect the passing of those assets to a former spouse. Therefore, a wife could name her husband as the beneficiary of a multi-million dollar life insurance policy and subsequently get divorced and die, resulting in the policy proceeds passing to her former husband instead of to her children because she failed to update the policy’s beneficiary designation.
It seems hard to believe but, in such post-divorce situations, Florida courts would often not look further than a designation naming a surviving former spouse as beneficiary absent a clear direction in a marital settlement agreement. As you would expect, litigation abounded and the stage was set for a legislative solution.
As of July 1, 2012, a new Florida law is in effect which mandates that, once a final judgment of dissolution or annulment has been entered, a former spouse is also to be treated as predeceased for purposes of assets such as IRAs, employee benefit plans, life insurance proceeds, transfer-on-death and pay-on-death accounts, and qualified and non-qualified annuities of the other former spouse.
This law could be a welcome relief for divorced clients who have yet to update the beneficiary designations on their non-probate assets. Nevertheless, it may be important for divorced clients to revisit or confirm their estate planning documents, account and other asset titles, and beneficiary designations. It should be noted that the new law does not extend this treatment to joint accounts with rights of survivorship.
Click the links below to read the Florida statutes referenced above:
If you still have questions, please contact us and one of our experienced Will and Trust attorneys can help you today.