Frequently, couples will name each other as beneficiaries of life insurance, annuities, bank accounts, CD’s, and retirement plans. Sometimes, though, when they get divorced the ex spouse forgets to remove the other ex spouse from the insurance, the bank account, the annuity or the retirement plan.
I’ve noted in the past, Florida has a provision that, under some circumstances, will allow a court to remove an ex spouse from some types of accounts if someone has died; but as I note it does not apply to all types of accounts.
New Florida Law on Pay On Death Accounts After Divorce
The United States Supreme Court handed down a decision recently, here:
Hillman v. Maretta
Dealing with a similar statute in Virginia; one that specifically applies to so-called FEGLIA plans, or life insurance that is offered to Federal employees and retirees. Essentially, Virginia provides for the revocation of certain beneficiary designations upon divorce, similar to Florida’s law; it also provides that if the beneficiary designation cannot be revoked because it is a Federal benefit, that the person receiving the benefit can be sued to recover the benefit.
Long story short here is, the Supreme Court said they can’t do that; that Federal law ‘pre-empts’ the Virginia statute, and it is up to Congress to change the law.
The bigger lesson here, though, is not about the ‘law’ but about the fact that a lot of people forget to update their estate plan after they divorce. This is very common and can lead to very unintended results; and the shame of it is, frankly, that under most circumstances, it is quite avoidable.
If you’ve had any big “life changes”, not only divorce, but including the death of a spouse, a new marriage, the death of a child, retirement, moving to another state, or illness, you really should review your estate plan, preferably with an attorney; not just your ‘will’ but looking at whatever other assets you may own; insurance, investment accounts, bank accounts, retirement accounts. People assume that these things will change automatically; that doesn’t necessarily happen. You may not, in fact, need any changes; but a few minutes review with a lawyer may save a lot of grief on the part of your children or new spouse somewhere down the line.
If you have questions about your estate planning situation in or around The Villages, Florida, including Lady Lake, Oxford, Wildwood, Belleview and Fruitland Park, or if you have a parent who has died or is undergoing some life changes, and have questions about probate, please feel free to contact my office to set an appointment.