Revocation of Beneficiary Designations after Florida Divorce
Divorce signifies a clean break – the marriage is ended, households separated and assets divided. With the exception of raising the children, most couples no longer wish to be tied to their ex-spouse, and they certainly have no desire for their spouse to benefit financially from them in any way. You may find it surprising, in fact, to know that up until 2012, a Florida divorce did not automatically sever one spouse’s ability to receive the proceeds of his ex-spouse’s life insurance policy or other benefit plan at her death.
Automatic Revocation of Florida Beneficiary Designations
In 2012 the Florida legislature amended its probate laws (the laws that govern distribution of property at a person’s death) to provide for the automatic revocation of a spouse as the named beneficiary on the following assets:
- Life insurance policy, qualified annuity or similar tax-deferred contract, whether owned as part of, or independent from, an employee benefit plan;
- Employee benefit plan;
- Pay-on-death account, or;
- Security or other account registered as a transfer-on-death.
So what exactly does this mean? Most people name their spouse as their beneficiary of their retirement accounts and life insurance policies, and then promptly forget about it. Prior to enactment of this new law, that forgetfulness could result in a costly mistake, with the ex-spouse receiving 100% of the proceeds of these plans as the named beneficiary.
Under the new law, however, once the divorce is final, any beneficiary designations that list the now ex-spouse are automatically terminated. So if you have a life insurance policy that names your husband to receive 100% of the proceeds at your death, but forget to remove him, he will not be allowed to receive any of that money at your death – the law effectively made the change for you. The money will then pass to the secondary beneficiary, the person or persons you named to receive the assets in the event your spouse died before you.
There are instances, however, where you may want your ex-spouse to receive these assets after your death. It could have been negotiated as part of the divorce settlement that your wife would receive all or a portion of the assets in your IRA at your death. Or you may have small children at the time of the divorce and want your spouse to receive the proceeds of a life insurance policy to help raise the children, since she would no longer receive child support.
In these cases, you would simply need to complete a new beneficiary designation form naming your ex-spouse as beneficiary. The law only severs designations made prior to the divorce; it does not control designations you make following it.
Even though the law automatically terminates the designation of an ex-spouse, you should always make sure that you complete a new beneficiary designation form on each asset. Failure to do so could cause a delay in paying the assets to the secondary beneficiary.
Boca Raton Divorce Attorney
The Boca Raton divorce attorneys at the Law Offices of Schwartz | White understand that divorce affects not only the immediate issues of property division and child custody, but issues involving your estate plan as well. With more than 50 years’ combined experience handling the intricate issues that surround divorce, our attorneys will help you complete updated beneficiary designations as part of your divorce, whether that includes naming new beneficiaries or leaving certain assets to your soon-to-be ex-spouse. Contact our Boca Raton office today 561.391.9943, or complete our convenient web form, to schedule an appointment with an attorney.