No, a former spouse does not get a life insurance beneficiary payout, unless the life insurance policy is controlled by ERISA, under Federal law.
Florida Law Cancels Ex Spouse’s Beneficiary Designations
Florida statute Section 732.703 terminates the rights of a former spouse to a life insurance policy upon a divorce. Excepts from that statute are as follows:
732.703 Effect of divorce, dissolution, or invalidity of marriage on disposition of certain assets at death.—
(1) As used in this section, unless the context requires otherwise, the term:
(b) ”Beneficiary” means any person designated in a governing instrument to receive an interest in an asset upon the death of the decedent.
(c) “Death certificate” means a certified copy of a death certificate issued by an official or agency for the place where the decedent’s death occurred.
(d) “Employee benefit plan” means any funded or unfunded plan, program, or fund established by an employer to provide an employee’s beneficiaries with benefits that may be payable on the employee’s death.
(e) “Governing instrument” means any writing or contract governing the disposition of all or any part of an asset upon the death of the decedent.
(f) “Payor” means any person obligated to make payment of the decedent’s interest in an asset upon the death of the decedent, and any other person who is in control or possession of an asset.
(g) “Primary beneficiary” means a beneficiary designated under the governing instrument to receive an interest in an asset upon the death of the decedent who is not a secondary beneficiary. A person who receives an interest in the asset upon the death of the decedent due to the death of another beneficiary prior to the decedent’s death is also a primary beneficiary.
(h) “Secondary beneficiary” means a beneficiary designated under the governing instrument who will receive an interest in an asset if the designation of the primary beneficiary is revoked or otherwise cannot be given effect.
(2) A designation made by or on behalf of the decedent providing for the payment or transfer at death of an interest in an asset to or for the benefit of the decedent’s former spouse is void as of the time the decedent’s marriage was judicially dissolved or declared invalid by court order prior to the decedent’s death, if the designation was made prior to the dissolution or court order. The decedent’s interest in the asset shall pass as if the decedent’s former spouse predeceased the decedent. An individual retirement account described in s. 408 or s. 408A of the Internal Revenue Code of 1986, or an employee benefit plan, may not be treated as a trust for purposes of this section.
(3) Subsection (2) applies to the following assets in which a resident of this state has an interest at the time of the resident’s death:
(a) A life insurance policy, qualified annuity, or other similar tax-deferred contract held within an employee benefit plan.
(b) An employee benefit plan.
(c) An individual retirement account described in s. 408 or s. 408A of the Internal Revenue Code of 1986, including an individual retirement annuity described in s. 408(b) of the Internal Revenue Code of 1986.
(d) A payable-on-death account.
(e) A security or other account registered in a transfer-on-death form.
(f) A life insurance policy, annuity, or other similar contract that is not held within an employee benefit plan or a tax-qualified retirement account.
(4) Subsection (2) does not apply:
(a) To the extent that controlling federal law provides otherwise;
(b) If the governing instrument is signed by the decedent, or on behalf of the decedent, after the order of dissolution or order declaring the marriage invalid and such governing instrument expressly provides that benefits will be payable to the decedent’s former spouse;
(c) To the extent a will or trust governs the disposition of the assets and s. 732.507(2) or s. 736.1105 applies;
(d) If the order of dissolution or order declaring the marriage invalid requires that the decedent acquire or maintain the asset for the benefit of a former spouse or children of the marriage, payable upon the death of the decedent either outright or in trust, only if other assets of the decedent fulfilling such a requirement for the benefit of the former spouse or children of the marriage do not exist upon the death of the decedent;
(e) If, under the terms of the order of dissolution or order declaring the marriage invalid, the decedent could not have unilaterally terminated or modified the ownership of the asset, or its disposition upon the death of the decedent;
(f) If the designation of the decedent’s former spouse as a beneficiary is irrevocable under applicable law;
(g) If the governing instrument is governed by the laws of a state other than this state;
(h) To an asset held in two or more names as to which the death of one co-owner vests ownership of the asset in the surviving co-owner or co-owners;
(i) If the decedent remarries the person whose interest would otherwise have been revoked under this section and the decedent and that person are married to one another at the time of the decedent’s death; or
(j) To state-administered retirement plans under chapter 121.
(5) In the case of an asset described in paragraph (3)(a), paragraph (3)(b), or paragraph (3)(c), unless payment or transfer would violate a court order directed to, and served as required by law on, the payor:
(a) If the governing instrument does not explicitly specify the relationship of the beneficiary to the decedent or if the governing instrument explicitly provides that the beneficiary is not the decedent’s spouse, the payor is not liable for making any payment on account of, or transferring any interest in, the asset to the beneficiary.
(b) As to any portion of the asset required by the governing instrument to be paid after the decedent’s death to a primary beneficiary explicitly designated in the governing instrument as the decedent’s spouse:
1. If the death certificate states that the decedent was married at the time of his or her death to that spouse, the payor is not liable for making a payment on account of, or for transferring an interest in, that portion of the asset to such primary beneficiary.
2. If the death certificate states that the decedent was not married at the time of his or her death, or if the death certificate states that the decedent was married to a person other than the spouse designated as the primary beneficiary at the time of his or her death, the payor is not liable for making a payment on account of, or for transferring an interest in, that portion of the asset to a secondary beneficiary under the governing instrument.
3. If the death certificate is silent as to the decedent’s marital status at the time of his or her death, the payor is not liable for making a payment on account of, or for transferring an interest in, that portion of the asset to the primary beneficiary upon delivery to the payor of an affidavit validly executed by the primary beneficiary in substantially the following form:
4. If the death certificate is silent as to the decedent’s marital status at the time of his or her death, the payor is not liable for making a payment on account of, or for transferring an interest in, that portion of the asset to the secondary beneficiary upon delivery to the payor of an affidavit validly executed by the secondary beneficiary in substantially the following form:
(6) In the case of an asset described in paragraph (3)(d), paragraph (3)(e), or paragraph (3)(f), the payor is not liable for making any payment on account of, or transferring any interest in, the asset to any beneficiary.
(7) Subsections (5) and (6) apply notwithstanding the payor’s knowledge that the person to whom the asset is transferred is different from the person who would own the interest pursuant to subsection (2).
(8) This section does not affect the ownership of an interest in an asset as between the former spouse and any other person entitled to such interest by operation of this section, the rights of any purchaser for value of any such interest, the rights of any creditor of the former spouse or any other person entitled to such interest, or the rights and duties of any insurance company, financial institution, trustee, administrator, or other third party.
The death certificate has a central role in making sure the proceeds are not paid improperly to a former spouse. If the death certificate says still married, the insurance company can pay out the proceeds to the former spouse. The proper beneficiaries would then need to sue the former spouse for the recovery of the payout.
Federal Law Does not Cancel Ex Spouse’s Rights to Insurance Proceeds.
Many employer benefit plans are governed by the ERISA law, which is a federal law that provides for the standardization of how employee benefits are handled nationwide. Under ERISA, a former spouse’s beneficiary designation is not automatically terminated.
In Egelhoff v. Egelhoff, 532 U.S. 141 (2001), the Supreme Court held that when the instrument of transfer is a beneficiary designation in a pension plan or life insurance policy subject to federal regulation under the Employee Retirement Income Security Act (ERISA), the otherwise applicable state divorce revocation statute is preempted, even though ERISA makes no mention of divorce revocation.
Contact inheritance litigation lawyer Jeffrey Skatoff to review your case.
