Does your MSA (marital settlement agreement) include your ex-spouse’s obligation to maintain life insurance naming you as the beneficiary to secure future support payments in case of his or her death? Better look again, because the law has changed, and you may have lost that benefit even though it’s included in your divorce final judgment. Florida Statute 732.703, which became effective on July 1, 2012, voids many such provisions for an ex-spouse who dies on July 1, 2012 or later, because the law specifically applies retroactively.
The 2012 statute states that, if the life insurance provision was made before the divorce occurred, it becomes retroactively void as of the date the final divorce judgment is entered. The law also impacts pre-divorce beneficiary designations of other types of assets, like IRA’s, pensions, annuities, pay-on-death accounts and transfer-on-death accounts.
But don’t get too worried yet, there are exceptions in the statute. For example, if your divorce final judgment specifically bars your ex-spouse from unilaterally modifying or terminating his or her life insurance obligation, the statute does not apply to void your ex-spouse’s life insurance obligation. If this type of prohibition is only in your MSA, but not included in your divorce final judgment, it is not so clear that the exception would apply.
Anytime a law retroactively voids existing contract provisions, it will likely be challenged as unconstitutional. Until such challenges are raised and determined, it is advisable to seek legal advice if your MSA contains this type of provision. Remedies may be as simple as asking your ex-spouse to re-affirm the pre-divorce beneficiary designation.
If you have questions regarding your life insurance beneficiary rights in a divorce situation, call an experienced family law attorney.