FS 732.703

The amended section 732.703(2), Florida Statutes provides: “A designation made by or on behalf of the decedent providing for the payment or transfer at death of an interest in an asset to or for the benefit of the decedent’s former spouse is void as of the time the decedent’s marriage was judicially dissolved or declared invalid by court order prior to the decedent’s death, if the designation was made prior to the dissolution or court order. The decedent’s interest in the asset shall pass as if the decedent’s former spouse predeceased the decedent.”

The amended statute applies to decedents who die after July 1, 2012, regardless of when they made a beneficiary designation. 

The statute does not apply to 401K Beneficiary since it is governed by Federal Law.

If the owner of a 401k is single when he or she dies, the assets go to the designated beneficiary, no matter what his or her will states. In addition, the assets will be distributed to the designated beneficiary regardless of any other agreements -- even court orders.

If a man's wife is the designated beneficiary of his 401k. The couple gets divorced and the man does not change his beneficiary designation, but the woman waives her right to receive any retirement assets as part of the divorce agreement. If the man dies without changing his beneficiary designation and without remarrying, his former wife will still receive the retirement assets, even though the divorce decrees declares that she should not.

 

The statute applies to the following assets in which a Florida resident has an interest at death:

  • 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, including an individual retirement annuity described in section 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.

Exceptions

There are important exceptions to the statute. The designated beneficiary will not be deemed to have predeceased the beneficiary if:

  • Controlling federal law provides otherwise.  See, for example, Hillman v. Maretta, 133 S. Ct. 1943 (2013), in which the U.S. Supreme Court held federal law, the Federal Employees' Group Life Insurance Act of 1954, preempted a Virginia statute similar to Florida’s automatically revoking a beneficiary designation on a federal employees’ life insurance policy. The decedent, a federal employee, remarried but never changed the designation of his former wife as beneficiary.  His widow lost her lawsuit seeking to direct the payment of the death benefit to his estate, of which she was beneficiary, rather than to his former wife. Citing Hillman, a Florida state court held, if the Servicemembers’ Group Life Insurance Act (SGLIA) protected a qualified  beneficiary designation under a  life insurance policy qualified under the SGLIA, federal law would preempt the state court’s order directing a former husband to change the beneficiary designation of his existing life insurance policy.  Hirsch v. Hirsch, 136 So. 3d 622, 623-34 (Fla. 2d DCA 2013).
  • The governing instrument is signed by or on behalf of the decedent after the dissolution judgment or order of annulment and expressly provides that the interest will be payable to the designated former spouse, regardless of dissolution or invalidity of the decedent's marriage.
  • To the extent a will or trust governs the disposition of assets and section 732.507, Florida Statutes (e.g., a specific post-divorce designation of former spouse in will or obligation in a final judgment to make the former spouse an irrevocable beneficiary) or section 736.1105, Florida Statutes applies.
  • A final judgment of dissolution or annulment requires the decedent to maintain the asset for the benefit of the former spouse or children of the marriage, payable on death outright or in trust, only if other assets of the decedent fulfilling such requirement for the benefit of the former spouse or children do not exist upon death.
  • The decedent did not have the ability unilaterally to change the beneficiary or pay-on-death designation.
  • The designation of the decedent's former spouse as a beneficiary is irrevocable under applicable law.
  • To an asset held in two or more names as to which the death of one co-owner vests ownership of the asset in the surviving co-owner or co-owners.
  • The decedent remarries the person whose interest would otherwise have been revoked under this section and the decedent and that person are married to one another at the time of the decedent’s death.
  • To state-administered retirement plans under Chapter 121, Florida Statutes.

Checklist

  • Did the insured die after July 1, 2012?
  • Is the asset (e.g., benefit plan) within the scope of section 732.703?
  • Is there a marital settlement agreement that addresses the asset?
  • Does the marital settlement agreement require a former spouse to maintain the asset as security for alimony or child support?
  • Is there a final judgment of dissolution that refers to the asset?
  • Is there evidence of a testamentary instrument (e.g., last will and testament) naming a former spouse as beneficiary of the asset upon the owner’s death?
  • Does the instrument governing disposition of the asset upon death specify the relationship of the beneficiary to the decedent, or provide the beneficiary is not the decedent’s spouse?
  • Questions to determine if one of the exceptions applies
    • Is the asset controlled by federal law, e.g., 401(k) plans and Keogh plans under the Retirement Equity Act (REA) of 1984; a plan under the Federal Employees' Group Life Insurance Act of 1954 (FEGLIA); or a plan under the Servicemembers' Group Life Insurance Act (SGLIA)?
    • Is the asset a state-administered retirement plan, under the Florida Retirement System, which applies, for example, to pension plans for state and county officers and employees, law enforcement officers, firefighters, highway patrol workers, correctional officers, and public school teachers
    • Does the policy or application for insurance address dissolution or annulment?
    • Does a will or trust instrument govern the disposition of the asset and, if so, does either section 732.507, Florida Statutes (e.g., a specific post-divorce designation of former spouse in will or obligation in a final judgment to make the former spouse an irrevocable beneficiary) or section 736.1105, Florida Statutes (specific post-divorce designation of former spouse in trust instrument or obligation in a final judgment of dissolution make the former spouse an irrevocable beneficiary? 
    • Following entry of the final judgment of dissolution or annulment, did the decedent sign a new designation expressly naming the former spouse as beneficiary?
    • Does a final judgment or settlement agreement obligate the insured to keep the former spouse or minor children as irrevocable beneficiaries?
    • Does the final judgment require the insured to maintain the policy for a former spouse’s benefit or for the benefit of any minor children? 
    • Under the terms of the final judgment, could the decedent unilaterally have terminated or modified ownership of the asset without anyone else’s prior knowledge and consent?
    • Are other assets of the decedent available to fulfill such requirement for the benefit of the former spouse or minor children?
    • Is the beneficiary designation irrevocable under applicable law?
    • Is the contract or agreement governed by state law other than Florida?
    • Does operation of law vest ownership of an asset in one or more surviving co-owners?
    • Did the decedent remarry the former spouse and were they married to one another at the time of death?