Estate Planning Issues in a Dissolution of Marriage

If Luci becomes unable to make decisions for herself, her healthcare and finances will be handled by whoever she has designated in legal documents like a power of attorney. If she doesn’t have these documents, Florida law will determine who has control. A durable power of attorney is a document that lets one person make decisions for another person if they can’t do it themselves. If Luci has one and becomes unable to make decisions, her husband can make choices for her. However, if they are going through a divorce, his power of attorney will automatically be canceled unless Luci wrote something different in the document. If Luci doesn’t have a power of attorney and becomes unable to make decisions, her husband can ask the court to be in charge of her and her money. The court will usually prefer to choose a family member to be in charge, but because of the divorce, they may choose someone else. Luci can also choose who she wants to be in charge of her if she can’t decide in the future. Luci might have set up a trust to hold her property and named her spouse as the person in charge of it. If they’re getting a divorce, she might want to change that. She also might have designated her spouse to make healthcare decisions for her if she can’t, and she might want to change that too. If Luci wants to make sure her soon-to-be ex-husband doesn’t make decisions about her healthcare or life-prolonging procedures, she can revoke any previous documents that give him that power. She can do this by telling him or her healthcare provider, or by writing it down. If she doesn’t have any documents in place, her ex-husband would have the right to make those decisions for her if she were unable to. During the divorce, Luci can make new documents to choose someone else to make those decisions for her. If one spouse dies while they are still legally married but going through a divorce, the surviving spouse still has the same rights as if they were still married. However, if the deceased spouse left written instructions for their burial, those should be followed before a court appoints someone to handle their affairs. Any assets that the spouses owned together will go to the surviving spouse if they had rights of survivorship, or will be divided as tenants in common if they were in the process of getting divorced. It’s important for the living spouse to check how their property is titled and make any necessary changes. If someone dies while still married, their spouse will automatically receive their property unless the will or trust specifically says otherwise. If they are in the process of getting a divorce, the spouse will not inherit unless the will or trust says they should.

If the person owns a house in their name only, their spouse will automatically get a life estate in the house when they die, with the rest going to their children. The spouse can give up this right before the person dies.

If the person dies before the divorce is final, their spouse can claim 30 percent of their estate, including joint property, life insurance, and retirement plans. The spouse cannot claim this after the divorce is final. If Luci dies without a will, her husband will get most of her stuff, unless she has kids from another marriage. Her husband also gets some money and property to help take care of the family. If she has special accounts that name a beneficiary, her husband will still get the money even if they get divorced. After a divorce, it’s important to update the beneficiary designation on your life insurance policy and retirement accounts to remove your ex-spouse. If you don’t do this, your ex-spouse could still receive the money when you die, even if you wanted someone else to get it. This happened in a famous case called Cooper v. Muccitelli. It’s important to make sure your financial documents reflect your wishes after a divorce. If someone has a life insurance policy or retirement plan with a beneficiary, the settlement agreement from a divorce might not change who gets the money when the person dies. If the agreement doesn’t specifically say anything about the policy or plan, the person named as the beneficiary will still get the money. And if the agreement doesn’t require the person to name a specific beneficiary, they can choose whoever they want to get the money. The Florida Supreme Court ruled that a general statement in a divorce agreement about who gets ownership of a life insurance policy, retirement account, or annuity is not specific enough to override who is listed as the beneficiary on the actual policy or account. If you have a retirement plan covered by the Employee Retirement Income Security Act (ERISA), your ex-spouse may be entitled to at least 50% of the benefits unless they agree to something else. It’s important to know if your account is covered by ERISA or not, because that can affect how it’s divided in a divorce. With an annuity, the person who is listed as the beneficiary on the contract will receive the money when you die, even if you are divorced. So it’s important to make sure your ex-spouse signs a waiver if you want someone else to receive the money. To minimize unintended results in divorce, you can update documents to remove your soon-to-be ex-spouse from any legal rights or powers they have, like power of attorney or trustee status. You can also have a legal agreement in place before or after marriage to waive certain rights that a spouse has in case of death. Additionally, the agreement made during a divorce can also determine how property and assets will be divided. All of these steps can help avoid unexpected outcomes in a divorce. When a person dies during a divorce, any agreements made at the beginning of the divorce may not control how property is divided after their death. If one party dies after the divorce is final but while an appeal is pending, the divorce could be reversed and the surviving party would have rights in the deceased party’s estate. It’s important for people going through a divorce to consider who will make decisions for them if they become incapacitated or pass away, and to update their will and beneficiaries on their accounts. It’s also important to have written agreements to minimize any rights that arise upon a party’s death. This passage provides information about various Florida statutes related to wills, trusts, and estates, as well as court cases that have addressed these issues. It also mentions a lawyer who practices in this area. The passage is submitted on behalf of the Family Law Section.

Source: https://www.floridabar.org/the-florida-bar-journal/estate-planning-issues-in-a-dissolution-of-marriage/