During a divorce, it’s common for people to want to change their will and other documents right away. But in Florida, the law already protects divorced people from their ex-spouse inheriting their assets, even if they forget to update their will. However, it’s important to make sure beneficiary forms for things like life insurance and retirement accounts are updated after a divorce, to make sure the right person gets the money. After a divorce in Florida, your estate plan might be affected. There are laws that protect your assets, but there are also things to consider, especially if you have an irrevocable trust. Make sure to talk to a lawyer about it. When a married person in Florida gets divorced, their will and revocable trust are automatically changed to remove any provisions for their ex-spouse. This means they don’t need to immediately update their will and trust after getting divorced. The same goes for who they appoint to make medical and financial decisions for them. If they named their ex-spouse in their health care documents or power of attorney, those appointments are automatically cancelled after a divorce. However, if they want to make sure their ex-spouse can still make decisions for them, they need to specifically state that in their documents or re-do them after the divorce is final. Before 2012, if someone got divorced, their ex-spouse would still get the money from their life insurance or retirement account if they were still listed as the beneficiary. But now, a new law says that after July 1, 2012, if someone dies, their ex-spouse will not automatically get the money if they are still listed as the beneficiary, unless the person who died specifically said so in a legal document. In 2012, Florida made a law that says if someone gets divorced, any money or assets they left to their ex-spouse in their will or other plans will go to someone else instead. This applies to things like life insurance, retirement accounts, and payable-on-death accounts. But for retirement accounts from an employer, federal law is more important than Florida’s law. This means the ex-spouse could still get the money, even if the Florida law says they shouldn’t. For individual retirement accounts, Florida’s law will be followed, so the ex-spouse won’t get the money if the person who died didn’t want them to. When a married couple gets a divorce, it’s important to update their bank and investment accounts. In Florida, if a divorce doesn’t mention what happens to the survivorship rights on these accounts, a new law automatically cancels the ex-spouse’s rights to get the money when the account holder dies. However, the law has some problems because the company holding the account doesn’t have to follow this rule and might still give the money to the ex-spouse. So, it’s important for people to make sure their accounts are updated after a divorce to avoid any problems later on. The law is still unclear about what happens to assets that are meant for an ex-spouse or children after a divorce. If a person is supposed to keep a certain amount of money or property for their ex or kids, it’s not clear if that takes the asset out of the protection of the law. For example, if someone has a $1 million life insurance policy and has to keep $100,000 for their children, it’s not clear if the ex-spouse can still get the remaining $900,000. The law needs to be clearer about this so that everyone knows what happens to these assets after a divorce. Florida’s law on revoking transfers after divorce now more closely follows the Uniform Probate Code (UPC). The UPC states that divorce revokes any transfers or appointments of property to the former spouse or their relatives, as well as any powers of appointment or nominations in fiduciary roles. Florida still has some differences in how it treats beneficiary-designated assets compared to the UPC, particularly regarding the liability of the payor (the person or entity making the payment). The UPC has a more detailed process for notifying the payor of beneficiary revocation and gives the payor options for dealing with the situation. It’s not clear why Florida’s law didn’t align more closely with the UPC in this aspect. In Florida, when a person gets divorced, the law doesn’t automatically change who gets their stuff if they die. This means that if someone names their ex-spouse’s family member as a beneficiary in their will or on their life insurance, that person could still get the money or property even after the divorce. The reason for this is that the law assumes that after a divorce, the person wouldn’t want their ex-spouse’s family to benefit from their estate.
But there are some types of trusts, like life insurance trusts, where the law can’t change who gets the money, even if the person is divorced. This means that it’s really important for lawyers to look at these kinds of trusts when going through a divorce, so that everything is fair for both people involved. An irrevocable life insurance trust is set up to make sure that the money from a life insurance policy goes to the right people when the insured person dies. If the insured person is getting a divorce, they may not want to keep putting money into the trust if their soon-to-be ex-spouse is the main beneficiary. One solution is to stop putting money into the trust and let the policy end. Then, after the divorce, they can get a new policy and set up a new trust for their children. But it’s not always that simple, because some policies don’t end right away when you stop paying, and the insured person might have health issues that make ending the policy a bad idea. If a couple is getting divorced and they have a joint life insurance policy in an irrevocable trust, they can work with their lawyers to change the trust so that the noninsured spouse is no longer included. They can also agree to continue contributing to the trust for the benefit of their children, or make a one-time contribution to keep the policy in place. There are also other types of irrevocable trusts that could be affected by a divorce, like charitable trusts, and these may need to be addressed as well. After a divorce, it’s important to review your estate planning documents and beneficiary designations to make sure they reflect your wishes. If you have a trust, there may be options to consider in the divorce process, such as dividing the trust assets or terminating the trust. It’s important to review these options with a lawyer. If you have a trust that includes your spouse as a beneficiary, it’s also important to consider how that might impact the divorce settlement. Overall, it’s important to review and update your estate planning documents after a divorce to ensure they reflect your current situation. When a couple gets divorced in Florida, they have to divide their property, including real estate. The law says that if they own property together, it automatically changes to being owned separately when they divorce. This means they are no longer responsible for each other’s share of the property. If they want to leave anything to their ex-spouse in their will, they need to make sure to update it after the divorce. The law also says that if they get married again, any gifts or money they left for their ex-spouse before the divorce is still valid. It’s important to talk to a lawyer to make sure everything is done correctly. If a person gets divorced, their ex-spouse might still be set to inherit from their retirement or life insurance. To avoid this, it’s important for employers and individuals to update their plan documents and beneficiary forms to specify that the ex-spouse should no longer be eligible to inherit after the divorce. This is especially important for things like property and life insurance. It’s also a good idea to set up a trust for life insurance to make sure the money goes to the right people. A lawyer and a law clerk wrote a column about trusts and taxes in Florida. They mentioned laws that allow changes to trusts and specific types of trusts that are allowed by the IRS. They also talked about the federal gift tax exemption being raised in 2011.
Source: https://www.floridabar.org/the-florida-bar-journal/estate-planning-death-soon-after-divorce/
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