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The Effect of Divorce on Non-Probate Transfers of Property in Florida

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In estate planning law, we often talk about “probate” and “non-probate” transfers of property. The difference between the two is simple. When property is transferred at death according to the terms of your will, that is a probate transfer. If the property is transferred through some other means, it is a non-probate transfer.

Two common examples of non-probate transfers are trusts and beneficiary designations. If you have a living trust, the trustee is responsible for distributing your property after you die in accordance with the instructions you left in the trust documents. Similarly, if you have a retirement account, the beneficiary designation forms that you filed with your plan’s administrator dictates who gets that money after you are gone.

An issue that often comes up with respect to probate and non-probate transfers is the effect of a divorce. Let’s say you signed a beneficiary designation form leaving your retirement account to your spouse after you die. But you later get a divorce. If you forget to file a new beneficiary designation form, does that mean your ex-spouse still inherits the retirement account?

The answer is “no,” because under Florida law, a divorce automatically “voids” any beneficiary designation or similar non-probate transfer made prior to the date of said divorce. The law simply acts as if your ex-spouse died before you in the event a transfer becomes necessary. Of course, you are free to make a new non-probate transfer to an ex-spouse following your divorce; the law merely assumes that you intended to revoke any pre-divorce designation.

The same goes for trusts. Take this recent case from Nevada, In the Matter of the Colman Family Revocable Trust, which has similar laws governing non-probate transfers to those of Florida. In this case, a woman named Chari Colman owned a house in Nevada prior to her marriage. After the marriage, she created a living trust with her husband, which included the house. One month before Colman died, she obtained a divorce.

Under the terms of the trust, the ex-husband would have received the house. But the Nevada courts held the divorce voided any non-probate transfer to the ex-husband. And since the house remained Colman’s separate property up until her death–the house was not converted into community property–the law acted as if the ex-husband had died or “disclaimed” his interest in the trust. The house therefore must go to an alternate beneficiary named in the trust documents.

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Again, it is important to emphasize that in cases like the one described above, Florida law only nullifies a transfer to an ex-spouse “[u]nless the trust instrument or the judgment for dissolution of marriage or divorce expressly provides otherwise.” There is therefore nothing stopping you from signing new estate planning documents after a divorce that continues to treat your ex-spouse as a beneficiary. But you need to take affirmative action in order to ensure the courts respect your wishes.

Indeed, when you have been through a divorce–or any major life event–it is a good time to sit down and reconsider your existing estate planning documents. A qualified Fort Myers estate planning lawyer can help. Contact Kuhn Law, P.A., at 239-333-4529 today to schedule a free confidential consultation with a member of our estate planning team.

Sources:

leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&Search_String=&URL=0700-0799/0736/Sections/0736.1105.html

scholar.google.com/scholar_case?case=5065638490058327073

https://www.kuhnlegal.com/what-happens-to-my-savings-bonds-after-i-die/

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