Richard Hibbard purchased an annuity from Allianz Life Insurance Company that named his wife, Jeanne, as primary beneficiary. The Hibbards later divorced but Richard never changed the beneficiary designation. At Richard's death, Allianz paid Jeanne $97,000 as the beneficiary of the account.
Richard's estate sued Jeanne and Allianz, contending that the Florida statute section 732.703 automatically revoked the beneficiary designation at the time of divorce. This statute states, in part:
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.
Jeanne, who still lived in New Hampshire (where the Hibbards had lived during their marriage and at the time of divorce), moved to dismiss. She stated that federal court did not have jurisdiction and that the statute did not apply due to the provisions in the New Hampshire divorce decree. The motion to dismiss was denied.
The court held that there was no basis to conclude that the federal court was interfering with the probate proceedings. Thus it was appropriate to resolve this at the federal court. In addition, the court stated that the Allianz contract was the governing contract and not the New Hampshire divorce decree.
Of course, this could have been avoided had Richard updated his beneficiary designations. This case underlines the importance of keeping your beneficiary designations up-to-date. Our lives change constantly so your estate plan and beneficiary designations should reflect your current wishes. If you have been putting off updating your estate plan, contact our office. We would be happy to help you review and update your estate plan to reflect what you want.
Comments