NOTE: If you have not read Part 1 of this series on divorce and estate plans, please do so before reading this second part.
Although it may appear that Florida law fully protects divorced persons from having their ex-spouse share in their estate, that is not the case. There is a difference in an investment account that provides for ownership in the survivor when one account owner dies, and real estate owned in the same way. Even if an account with survivorship rights is awarded directly to one of the spouses in a divorce, the Florida law described in Part 1 of this series does not apply to remove the ex-spouse.
Consider this scenario: During a divorce, the wife is awarded the couples’ investment brokerage account titled in both spouses’ names with full rights of survivorship. She may not realize she must take action to re-title the account. If she fails to do so, at her death, her ex-husband becomes the owner of those funds.
The opposite result occurs when real estate is owned jointly by husband and wife. When a married couple owns property jointly with full rights of survivorship, their subsequent divorce results in ownership as tenants in common. If the real estate is not properly re-titled and one ex-spouse dies and is survived by the other, the deceased ex-spouse’s interest in the property must be probated.
These are examples of why one’s estate plan should be reviewed and updated after a divorce.
By leaving it up to Florida law to make updates to your estate planning documents after your divorce; you could forget to protect one of your most precious assets – your children. If your estate plan leaves assets to your children and you pass away while they are still minors, your ex-spouse will have access to those assets as legal guardian of your children. The assets your minor children inherit from you are vulnerable to a financially irresponsible ex-spouse. If your ex-spouse remarries, the realities of a blended family can also affect your minor children’s inheritance, placing those assets in danger. To protect your minor children’s inheritance after divorce, a trust can be created, naming a successor trustee other than your ex-spouse. The trust can direct the trustee to use trust assets only for the benefit of your children. The trust can also require that funds be paid directly to designated third parties, such as universities or hospitals, rather than to the minor child’s legal guardian.
Although Florida law has been expanded to provide divorce protection to more assets than in the past, one estate planning tool remains unaffected – an irrevocable trust. A divorced person must take action to eliminate or modify a vested, irrevocable benefit to their ex-spouse. This is another example of why one’s estate plan should be reviewed and updated after a divorce.
If you are divorced, or getting a divorce, and want to make sure your assets are protected and your estate plan is up-to-date in today’s world of blended families, legal nuances, and creditor predators, call us at 813-852-6500 to schedule a free consultation. We can help you achieve your estate planning goals.