Caution with Automatic Removal of Ex-Spouse as a Beneficiary Upon Divorce

Fla.Stats. Section 732.703 provides for the automatic removal of a spouse as a beneficiary of a life insurance policy upon divorce. Many other states have similar provisions. It is easy to become complacent in expecting this statutory provision to automatically remove a former spouse.

This can be a mistake. For example, while the Florida law provides that this removal of a former spouse will apply to an insurance policy owned by an employee benefit plan, the statute provides that this change will not occur if there is a conflict between this provision and federal law. Such a conflict may exist as to ERISA plans. Even in those states whose statute does not expressly provide that the statute will not apply if there is a conflict with federal law, the principal of federal supremacy will nonetheless result in an override of the state law provision. See also here for another example of federal override of state statutes in this context.

Besides conflict with federal law, the Florida statute provides 9 other circumstances when the statute will not apply. Thus it is imprudent to blindly rely on the statute without at least reviewing all the statutory exceptions. The more conservative course when dealing with a divorce situation is to obtain a list of beneficiary designations and then make sure each designation is specifically dealt with – either by operation of the statute without an applicable exception, or formal changes of beneficiaries.