Florida Court Discusses the Right to Retirement Proceeds in Divorce Actions

Many people have retirement savings accounts that they contribute money to throughout their careers. While retirement plans can only be in one person’s name, income placed in a retirement account during a marriage is generally considered marital property and is subject to equitable distribution absent an agreement to the contrary. A party that waives the right to their former spouse’s retirement benefits via a marital settlement agreement is not then entitled to such benefits merely because of an oversight in the plan document, as discussed in a recent Florida opinion. If you or your spouse intend to seek a divorce, it is prudent to retain a seasoned Florida divorce lawyer to help you protect your assets.

Procedural Background

Reportedly, the parties married in 1988. Throughout the marriage, the husband contributed to a 401k that was governed by ERISA. He designated the wife as his primary beneficiary under the plan and his children as secondary beneficiaries. They divorced in 2017 and entered into a marital settlement agreement (MSA) that stated, in part, that each party would receive the benefits from any retirement plan in their name and waived the right to any interest or claims in the other party’s benefits.

It is alleged that the MSA was ratified via the final dissolution of marriage. The husband died two years after the divorce, and his daughter from a prior marriage was named as the personal representative of his estate. Prior to his death, however, he neglected to change the primary beneficiary on his 401k plan. The wife and the daughter both made claims for the plan proceeds, but the plan administrator distributed them to the wife. The daughter filed a motion to enforce the MSA. In response, the wife argued that she did not waive her right to death benefits under the MSA. Following a hearing, a magistrate found in favor of the wife. The estate filed an exception. The trial court sustained the exceptions and ordered the wife to turn over the 401k proceeds. The wife appealed.

Conflicts Between Marital Settlement Agreements and Retirement Account Documents

On appeal, the court affirmed the trial court order. Specifically, it agreed with the trial court that the MSA’s terms were unambiguous and clear and expressly stated that each party waived any proceeds from the other party’s retirement plan, which included any purported death benefits. Further, the court noted that the estate was not barred from enforcing the MSA merely because the husband neglected to fill out a form.

The appellate court further emphasized that the plain language of the MSA was sufficiently specific to override the form designating a beneficiary, stating that the lack of the specific phrase “death benefits” was not dispositive, and magic words were not necessary to demonstrate waiver. Thus, it affirmed the trial court ruling.

Speak to an Experienced Florida Attorney

Deciding to end a marriage not only impacts people emotionally, but it also has financial ramifications as well, and it is smart for anyone considering a divorce to speak to an attorney regarding their options. The experienced Florida divorce lawyers of Lusk, Drasites & Tolisano, P.A. can advise you of your rights and help you to seek the best legal result available under the facts of your case. You can reach us by calling us at 800-283-7442 or via our online form to set up a conference.

 

 

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