Non-Probate Assets After Divorce

Beginning July 1, 2012, the law in Florida regarding what happens to most non-probate assets post-divorce has changed and now offers protection for those who did not revise these assets post-divorce. Non-probate assets are things like life insurance policies, annuities, transfer-on-death and pay-on-death accounts, IRAs, 401ks and other employee benefit plans. Prior to the recent change, a divorce had no impact on these non-probate assets. Unless a person was proactive post-divorce, the beneficiary designation would remain in effect, even if that meant a multi-million dollar life insurance policy passing to the ex-spouse. Certainly this was not always the intention of the deceased, but often occurred as a result of an oversight or lack of proper revision.

The recent change has added Florida Statute section 732.703, which now treats non-probate assets post-divorce in a similar manner to the way wills and trusts have been treated post-divorce all along. Under the new law, an ex-spouse is treated as having predeceased the other spouse for purposes of non-probate assets. This makes a designation of an ex-spouse on a non-probate asset made prior to the owner’s death void upon divorce, potentially preventing unwanted inheritance. This new law is silent about, and therefore does not apply to, jointly held accounts with rights of survivorship (those accounts that automatically pass in full to the non-deceased co-owner upon the death of the other co-owner).

As with every aspect of the law, there are some caveats and exceptions to this new legislation. This means that it is always important to consult with your family law attorney about the effect your divorce might have on all of your assets, and if necessary, review and revise your estate plans, beneficiary designations, and the titling of your assets with the assistance of counsel.