As anyone who has ever undergone a divorce understands, the act of dissolving a marriage carries with it financial repercussions. What many people do not realize is that the financial consequences of a divorce are affected not only by marital settlement agreements and other financial instruments created by the parties to the divorce, but also Florida laws such as Section 732.703. This law in particular can alter the ownership of assets after a divorce.
Fla. Stat. § 732.703 governs the specific situation when a couple divorces, and the former spouse remains as the primary beneficiary on certain assets held by the other spouse. The types of assets to which the statute applies include certain insurance policies, annuities, tax-deferred contracts, employee benefit plans, individual retirement accounts, payable-on-death accounts, and securities transferred upon death.
In the event that a divorced individual dies, and a former spouse remains as a beneficiary pursuant to an instrument executed by the decedent, a payor may rely on the marital status of the decedent given on the death certificate to alter the payment of proceeds. For instance, if the death certificate reveals that the deceased was single, divorced, or married to a person other than the primary beneficiary, the payor may rely on the certificate to pay the proceeds of the assets to the secondary beneficiary. However, if the death certificate indicates that the deceased is married to the person named as primary beneficiary, then the payor is not liable if payment is made accordingly. This statute applies to the situation where the named beneficiary is specified as the spouse in the financial instrument. In the case in which the relationship is not specified in the instrument, or if the instrument states that the individual is not the spouse of the deceased, then the payor is not liable for paying the proceeds to that primary beneficiary.
As with every law, there are exceptions. The above provisions do not apply when:
- If the instrument designating the former spouse was executed after dissolution, and it expressly states that proceeds are to be given to the former spouse;
- In certain cases, if a will or trust governs the disposition of the assets;
- If the divorce decree requires that the asset be maintained for the former spouse or children, payable upon the death of the decedent, only if other assets of the decedent fulfilling the requirement do not exist upon the death of the decedent;
- If controlling federal law provides otherwise;
- If the designation of the former spouse as beneficiary is irrevocable under applicable law;
- If, pursuant to the divorce decree, the deceased could not have unilaterally terminated or modified the ownership of the asset or its disposition upon death;
- If the instrument is governed by the laws of another state;
- If the asset had other co-owners, and the death of the decedent vested ownership in the other owners;
- If the decedent remarried the former spouse, and they are married at the time of death;
- If the asset is a state-administered retirement plan, under Chapter 121 of Florida Statutes.
There are many ways that one’s estate plans can be modified, or even nullified, by statute. For this reason, anyone considering divorce should consult with an experienced West Palm Beach Divorce Attorney to ensure that they understand the effects of Florida law on the transfer of assets. James S. Cunha has many years of experience helping individuals in the counties of Palm Beach, Martin, Okeechobee, St. Lucie, Broward, Miami-Dade, and Hendry work through divorce and other family law matters. He has attained a rating of “Superb” — 10 out of 10 — on Avvo.com, a website that rates attorneys. Call the Law Offices of James S. Cunha, P.A. today at 561-429-3924 to schedule a consultation.