Q: After my mother died, my father remarried and bought life insurance, naming his new wife as beneficiary. They later divorced, but he didn’t remove her name from the policy. Now he has died and I am his sole heir. My former stepmother claims she gets the life insurance. I don’t agree. What’s the law?
This was a frequent estate inheritance problem. It would occur when a former spouse’s name remained on beneficiary designations of non-probate assets, such as life insurance policies, annuities, IRAs and survivorship accounts, even though the ex was not an estate heir.
Florida law was clear that former spouses had no legal rights to specific probate or trust assets even if named in a will or trust signed prior to their divorce. But confusion remained for non-probate assets passing outside a will or trust.
The Florida Supreme Court in Crawford v. Baker, 64 So.3d 1246, (Fla. 2011) added to the confusion. It ruled that a divorce settlement giving the husband ownership of his deferred compensation plan, but not specifying who was to receive its death benefits, didn’t override the wife’s prior beneficiary designation when he died.
The Florida Legislature has tried to clear up the situation in Statute 732.703, titled “Effect of divorce, dissolution, or invalidity of marriage on disposition of certain assets at death.” It applies to ownership designation disputes for all persons dying after July 1, 2012.
It voids the most common non-probate asset beneficiary designations to a former spouse, regardless of their wording, and makes it easier for estate heirs to inherit. “The decedent’s interest in the asset shall pass as if the decedent’s former spouse predeceased the decedent.”
The new law specifically applies to life insurance policies, annuities, employee benefit plans, IRAs, payable-on-death accounts, and security or other accounts registered in a transfer-on-death form.
There are exceptions that protect former spouses, including out-of-state or federal law disputes, irrevocable spouse beneficiary designations, post-divorce instruments signed by the decedent, court orders requiring continuing spouse benefits, and situations where a decedent remarried his former spouse. There are also safe harbor provisions that immunize paying parties from liability in specified situations.
The best way to avoid these problems in marital dissolutions is to cancel all beneficiary or ownership designations of the former spouse with specific wording in the divorce settlement agreement or judicial final decree.
Conflicting claims of estate and donee to undelivered gift
My younger brother collected European art of the 1920s. One of his favorites and mine were a set of Salvador Dali signed etchings. He gave them to me for my 40th birthday, but his gift letter specified they would stay in his home where he could admire them during his lifetime. He died recently. His wife claims legal ownership as his estate heir. I think they were legally gifted to me before he died. Who wins?
There are three required legal elements to prove a valid lifetime gift of property. They are (1) voluntary, knowing and unconditional donative intent by the donor; (2) acceptance intention by the donee; and (3) delivery of the gift by donor to donee.
Your dispute with your brother’s wife obviously involves the issue of delivery. She claims that the art is an estate asset because of no actual physical delivery. You claim symbolic delivery of the art gift with postponed possession.