Important Law Change To Beneficiary Designations

Warning – You May Not Be The Beneficiary Of Your Ex-Spouse’s Life Insurance (or Other Assets) – Even if you are listed as the beneficiary!

In Florida, once divorced, a party is no longer considered the beneficiary of an ex-spouse’s life insurance policy (or other accounts listed below) even if they are listed as the beneficiary, unless the ex-spouse reaffirms the beneficiary after the divorce has been entered by the court [Section 732.703 Florida Statute (2012)]. This law also applies to several other non-probate assets such as a qualified annuity, employee benefit plan, IRA, payable-on-death accounts, securities registered with a transfer-on-death form, etc.

For example, it is common for an ex-spouse paying child or spousal support to have a life insurance policy in place to cover the support obligation should they pass away. If the beneficiary of the policy was designated prior to the actual divorce date, it is critical that the ex-spouse re-affirm the beneficiary or the insurance company may not recognize the ex-spouse as a beneficiary.

The law applies to these types of accounts

  • A life insurance policy, qualified annuity, or other similar tax-deferred contract held within an employee benefit plan.
  • An employee benefit plan.
  • An individual retirement account described in s. 408 or s. 408A of the Internal Revenue Code of 1986, including an individual retirement annuity described in s. 408(b) of the Internal Revenue Code of 1986.
  • A payable-on-death account.
  • A security or other account registered in a transfer-on-death form.
  • A life insurance policy, annuity, or other similar contract that is not held within an employee benefit plan or a tax-qualified retirement account.

Of course, there are some exceptions to these. If you are unsure if the policy or account falls under the provisions of this statute, it is best to simply re-affirm the beneficiary designation!

If you are listed as a beneficiary of your ex-spouses policy / account

  • Coordinate with your ex-spouse to re-affirm you as the beneficiary;
  • Ask if the insurance company can provide proof of the re-affirmation date, and make sure it is after the date your divorce was entered; and
  • In the event of death, remember to immediately make a claim against the life insurance policy to try to prevent it from going to another party.

If you hold a policy or account with your ex-spouse as a beneficiary

  • Re-affirm your beneficiary designation with the life insurance company or holder of your account to ensure your ex-spouse will receive the benefits. Failure to do this may lead to unnecessary claims against your estate and litigation at an already difficult time for your family.

As always, after a divorce, and periodically throughout life, make sure that you update your beneficiary designations for retirement benefits, life insurance, bank accounts, certificates of deposit, securities, etc. to be consistent with your wishes.

Questions Or Concerns?

If you have any questions or concerns about this, or any other family law matter, please feel free to contact us at any time!

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