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Wednesday, June 20, 2012

WINDFALLS ERASED FOR DIVORCING SPOUSES [FLORIDA]

More often than not, spouses name each other as beneficiaries on various testamentary documents. Through inadvertence,  oversight, or just bad timing (i.e., dying too fast) they often do not get around to removing a former spouse from such designations after divorce but before they die. This raises issues whether such designations will still be given legal effect after divorce. That is, will the surviving former spouse receive a windfall inheritance or benefit that the deceased spouse may not have wanted him or her to receive?

Florida law has provisions that will automatically remove a former spouse as a beneficiary under a Last Will or a revocable trust upon divorce. Effective for decedent’s dying after July 1, 2012, similar removal provisions will now apply to former spouses who are beneficiaries of a decedent’s life insurance, IRA, employee benefit plan, payable-on-death account, transfer-on-death security, or annuity. Effectively, Florida is saying that it believes persons most likely want to remove their former spouse from such items at the termination of the marriage, and it will do it for them unless they take affirmative action under the statute to continue such designations. This new provision arises under new Fla.Stats. §732.703. The foregoing is only a brief summary of the new statute – please read it to see how it applies in any particular situation.

Still not covered by statute are beneficial interests in favor of a former spouse that arise under a nonrevocable trust entered into during marriage.

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