etw
Cypen & Cypen  
Home Attorney Profiles Clients Resource Links Newsletters navigation
    
777 Arthur Godfrey Road
Suite 320
Miami Beach, Florida 33140

Telephone 305.532.3200
Telecopier 305.535.0050
info@cypen.com

Click here for a
free subscription
to our newsletter

Miami

Cypen & Cypen
SPECIAL SUPPLEMENT

for
JUNE 25, 2012

Stephen H. Cypen, Esq., Editor

AMENDMENT TO FLORIDA PROBATE COURT MAY IMPACT
ADMINISTRATION OF EMPLOYEE BENEFIT PLANS

 

Below is a Memorandum we just transmitted to our pension board clients concerning Florida House Bill 401.

As per the Memorandum, House Bill 401 may impact the administration of employee benefit plans.  Effective July 1, 2012, House Bill 401 applies to all deaths occurring on or after that date. 

 

MEMORANDUM

 

TO:            BOARDS OF TRUSTEES
                   PLAN ADMINISTRATORS

FROM:      ALISON S. BIELER, ESQ.

DATE:       JUNE 25, 2012

RE:             HB 401 – Effect of Divorce on Designated Beneficiaries

On April 24, 2012, Florida Governor Scott signed House Bill 401 (HB 401) into law.  Although the new law amends the Probate Code (Chapter 732, Florida Statutes), it may impact the administration of employee benefit plans.

In sum, HB 401 provides that any beneficiary designation providing a death benefit to a decedent’s former spouse is deemed void at the time the marriage is terminated or declared invalid by a court.  Consequently, a former spouse is treated as though he or she predeceased the member, and any benefit is paid to the member’s contingent/secondary beneficiary unless certain exceptions apply.  HB 401 takes effect on July 1, 2012, and applies to all deaths occurring on or after July 1, 2012, regardless of when the beneficiary designation was made by the member.  

Applicability:

Specifically, HB 401 applies to:
•employee benefit plans (except the Florida Retirement System);
•life insurance policies, annuities or other similar tax deferred contracts held within        an employee benefit plan;
•individual retirement accounts;
•payable on death accounts;
•a security or other account registered in a transfer-on-death form;
•life insurance, annuities or other similar contracts not held within an employee           benefit plan or tax-qualified retirement account.

HB 401 does not apply:
•to the extent federal law provides otherwise;
•if the beneficiary form is signed by the decedent after the marriage is terminated           or declared invalid and it expressly provides that benefits will be payable to the decedent’s former spouse;
•to the extent a will or trust governs;
•if the order of dissolution or annulment requires the former spouse to remain the beneficiary;
•if under the order of dissolution or annulment the decent could not have unilaterally terminated ownership of the asset;
•if the designation of the former spouse is irrevocable;
•if the instrument directing disposition of the asset to the former spouse is           governed by the laws of another state;
•to an asset held in two or more names where the death of one co-owner vests           ownership in the survivor(s);
•if the decedent remarried the former spouse; or
•to state-administered retirement plans under Chapter 121, Florida Statutes.

 

Procedure:

HB 401 limits liability for improper payments as long as the following procedures are followed:

•If the beneficiary designation form does not state the nature of the relationship of the beneficiary to the member/decedent, the Board may pay the death benefit to the named beneficiary.

•If the beneficiary designation form clearly identifies the beneficiary as the former spouse, then the Board may pay the death benefit to the named beneficiary.

•If the death certificate states that the member/decedent was married at the time of his or her death to the named spouse on the beneficiary designation form, then the Board may pay the death benefit to that named beneficiary.

•If the death certificate states that the decedent was not married at the time of his or her death, the Board may pay the death benefit to the contingent/secondary beneficiary.

•If the death certificate states that the decedent was married to another person other than the spouse designated as the primary beneficiary at the time of death, the Board may pay the death benefit to the contingent/secondary beneficiary.
         
•If the death certificate is silent as to the decedent’s marital status, HB 401 provides for the use of one of two different affidavit forms (as set forth in the new law) in order to pay a death benefit without liability after July 1st. 

1.      The first affidavit, attached as Exhibit A, is for use by an individual alleging to be the surviving spouse of the decedent. The primary beneficiary/spouse is required to affirm that the parties were legally married on the date of death.

2.      The second affidavit, attached as Exhibit B, is for use by a contingent/secondary beneficiary. The contingent/secondary beneficiary is required to affirm that the primary beneficiary and the decedent were not married on the date of death.

•        No benefit may be paid in violation of an order directed to the plan as long as the order is served as required by law.

 

Recommendation:

Again, this new law applies to all deaths occurring on or after July 1, 2012, regardless of when the designation was made by the member.  Therefore, we recommend that the Board and Plan Administrator discuss what actions should be taken to make sure that all beneficiary designations are up to date.  We further recommend that, beginning on July 1st, the plan’s beneficiary designation form be modified to include the description “former spouse” so that a member may clearly demonstrate the member’s intent to designate a former spouse as a beneficiary. 

Please add this item to your next meeting agenda for discussion.  In the meantime, should you have any questions regarding HB 401 and its application to your plan, please contact us at 305.532.3200, 954.522.3200 or 800.332.3200.

 

EXHIBIT “A”

NAME OF PENSION FUND

AFFIDAVIT

STATE OF FLORIDA

COUNTY OF

Before me, the undersigned authority, personally appeared   (type or print affiant's name) ("Affiant"), who swore or affirmed that:
          1.      (type or print name of decedent) ("Decedent") died on      (type or print the date of the Decedent's death).
          2.      Affiant is a "primary beneficiary" as that term is defined in Section 732.703, Florida Statutes.  Affiant and Decedent were married on          (type or print the date of marriage), and were legally married to one another on the date of the Decedent's death.
                                                                                                                  
                                                                                      (Affiant)

          Sworn to or affirmed before me by the affiant who is personally known to me or who has produced                                as identification this           day of                      ,20   .

                                                                                                                  
                                                          Signature of Notary Public
In accordance with the provisions of Florida           Statutes, §117.05(4), Notary name must printed, typed or stamped below Notary 's signature; seal must be stamped next to signature or below printed name:

                                                                                                                  
Printed, typed or stamped name of Notary

 

EXHIBIT “B”

NAME OF PENSION FUND

AFFIDAVIT

STATE OF FLORIDA

COUNTY OF

Before me, the undersigned authority, personally appeared  (type or print affiant's name) ("Affiant"), who swore or affirmed that:
          1.  (type or print name of decedent) ("Decedent") died on    (type or print the date of the Decedent's death).
          2.      Affiant is a "secondary beneficiary" as that term is defined in Section 732.703, Florida Statutes. On the date of the Decedent's death, the Decedent was not legally married to the spouse designated as the "primary beneficiary" as that term is defined in Section 732.703, Florida Statutes.

                                                                                                                  
                                                                                      (Affiant)

          Sworn to or affirmed before me by the affiant who is personally known to me or who has produced           as identification this           day of                             ,20   .

                                                                                                                  
                                                          Signature of Notary Public
In accordance with the provisions of Florida           Statutes, §117.05(4), Notary name must printed, typed or stamped below Notary 's signature; seal must be stamped next to signature or below printed name:

                                                                                                                  
Printed, typed or stamped name of Notary

 

 

 

Copyright, 1996-2012, all rights reserved.

Items in this Newsletter may be excerpts or summaries of original or secondary source material, and may have been reorganized for clarity and brevity. This Newsletter is general in nature and is not intended to provide specific legal or other advice.


Site Directory:
Home // Attorney Profiles // Clients // Resource Links // Newsletters