By: Barry E. Haimo, Esq.
November 3, 2015
Don’t Forget to Change Your Will after You Divorce – Part 2
Recently I wrote a post about how you want to ensure you change your will after you divorce to avoid having your ex-spouse inherit if they are designated as a beneficiary on your will or in a trust. This is probably the situation that most people will find themselves in following a split from their spouse.
But what if you still remain close to your former spouse and want them to inherit as if you were still married? Under Florida law, divorce nullifies this – unless you actively work against it. This is something that the Jamisons discovered the hard way.
Your Will After You Divorce: Unintentionally Cut Out after 30 Years Together
Dan and Janine Jamison were never a typical couple – even by South Florida standards. In a time where women in the workforce were still something of a novelty, Janine rose to prominence as a high-powered businesswoman with a knack for squeezing out profits where no one else could find them. Her department always made money, and she was well compensated for her efforts.
It wasn’t easy though. Janine worked extremely long hours and almost always brought work home. Somehow she managed to find time to have two children – a boy and a girl – with her husband Dan, but both times she continued working as much as possible, taking only a few weeks off for each birth.
She and Dan realized early on that it made no sense for him to work, so he became a “Mr. Mom” in the truest sense of the word. While she went to the office every morning, he changed diapers, made lunches, helped with homework, served as chauffeur, and made sure the house was in working order.
For Dan and Janine, it worked, and they were quite happy for a long time. In fact, it wasn’t until Janine’s health started to fail, and she decided to cut back at work in preparation for her retirement that things started to go south. Oddly, the more their worlds intersected, the more Dan and Janine realized that they had grown apart over the years and just didn’t know how to work as a couple anymore. The spark was gone, and with the kids both grown and out of the house, both of them decided on an amicable split so they could go their separate ways.
Since Dan had spent his entire adult life as a homemaker, he had no real employment history, and Janine thought it was only fair that she and he share her money – after all, she wouldn’t have been able to lead the life that she did without his help and support. While they were both living, they made financial arrangements – including alimony – to make sure that Dan was able to maintain his lifestyle. They even continued to see each other as friends and co-parents and spend holidays and family time together.
But the one thing they neglected to revisit was how Dan would inherit if Janine died first. As a married couple, they had planned quite well to make sure he had money, so they didn’t see any need to change those plans.
Unfortunately, what they didn’t realize was that the state of Florida has been systematically removing the inheritance rights of former spouses for decades. Dan and Janine both thought that he would automatically be entitled to her estate, but Florida law effectively removed him not just from her will, but also Janine’s revocable trusts, annuities, life insurance, pay-on-death accounts, and retirement planning accounts. The instant that the two of them divorced, he was cut out of his inheritance and didn’t even know it.
Dan didn’t discover the problem until Janine passed away a few years after they divorced. Just as he had done when she was alive, Dan handled all of the arrangements surrounding her death, including planning the funeral and burial. After things settled down, he and the kids went to their lawyer to discuss Janine’s will, and that’s when he was hit with the awful news – legally, there was nothing for him. He was shocked and devastated.
Luckily, everything passed onto the kids, and there was no way that they were going to let their father go without – they knew what their mother would have wanted. But the issue caused a lot of unnecessary complications and headaches; i.e. gift taxes, qualified disclaimers, and the like. Their lawyer had to do a bit of legal wrangling before everything was in its proper place, and the situation cost them money that should have gone straight to Dan and the kids.
When Life Changes Occur, Revisit Your Estate Plan
Ultimately, Dan luckily survived with relatively minor damage to his finances, but the problem could have been solved with far less monetary bloodshed. All Janine needed to do was talk to her estate planning lawyer after she divorced Dan and explain what she wanted.
He or she would have let Janine know about the legal issues caused by her divorce and advised her to specifically rename Dan as her beneficiary post-divorce. Doing this would have alerted the powers-that-be to the fact that she still wanted him to inherit and allowed everything to go as planned.
If you are in the middle of a divorce or have recently gotten divorced, don’t forget to take another look at your estate plan and revise it as necessary. Taking a little bit of time now to change your will after you divorce can prevent a lot of problems down the road.
Barry E. Haimo, Esq.
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