A new law in divorce or dissolution of marriage cases will impact the payments of transfer on death assets on many divorces moving forward. This new law which went effect on July 1, 2012 addresses what happens when an account or asset has a provision to pay a beneficiary upon the death of an individual. Usually we are talking about a bank account or retirement plan of some kind payable on death to the survivor.
Sometimes during the course of a marriage, a husband and wife will have accounts such as retirement accounts that are payable to the surviving spouse upon death. What could have happened under law prior to July 1, is if the beneficiary designation is not changed, then the surviving spouse could end up with the entire account. Imagine if you were ordered to pay half of the retirement but then died, it would all go to the survivor instead of just half. Usually a divorced couple is more interested in providing for the children rather than the former spouse.
With this new law, the designation of a beneficiary providing for the payment or transfer at death of an interest in an asset is invalid under Florida law upon a divorce or dissolution of the marriage. Any designation made prior to the divorce or dissolution is void as of the time the decedent’s marriage was judicially dissolved. This law is meant to include life insurance, employee benefit accounts, individual retirement accounts or any payable-on-death account after divorce or dissolution. If your asset or instrument is governed by another State’s law, then of course Florida divorce law does not apply. This does not apply to jointly held assets with right of survivorship but only to payable on death accounts. Furthermore, the court or the parties can decide to limit the ability of the owner of an asset to dispose of it as part of the divorce decree. You must look at each asset separately when in a divorce to ensure proper distribution.
Now it is more important to have your agreements detailed and address every asset, making clear your intentions. Consultations in civil matters are free if you hire. To speak to an attorney about your assets in a divorce click, call or fill out the form today. We do charge a consultation fee in divorce cases.
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