Case Name: Diane LUSZCZ, as personal representative of the Estate of Madeline S. Lavoie, Appellant, v. Donald G. LAVOIE, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 2001-05-25
Citations: 787 So. 2d 245
Docket Number: No. 2D00-1630
Parties: Diane LUSZCZ, as personal representative of the Estate of Madeline S. Lavoie, Appellant, v. Donald G. LAVOIE, Appellee.
Judges: PATTERSON, C.J., THREADGILL, PARKER, ALTENBERND, NORTHCUTT, GREEN, CASANUEVA, STRINGER, DAVIS, SILBERMAN, JJ., Concur.
Reporter: Southern Reporter, Second Series
Volume: 787
Pages: 245–250

Head Matter:
Diane LUSZCZ, as personal representative of the Estate of Madeline S. Lavoie, Appellant, v. Donald G. LAVOIE, Appellee.
No. 2D00-1630.
District Court of Appeal of Florida, Second District.
May 25, 2001.
W. Russell Snyder of W. Russell Snyder, P.A., Venice, for Appellant.
H. Stephen Hillebrand, Sarasota, for Appellee.

Opinion:
EN BANC
WHATLEY, Judge.
Diane Luszcz, as personal representative of the estate of her mother, Madeline S. Lavoie, appeals the trial court's order denying her motion for contempt and/or to enforce the final judgment of dissolution of Madeline's marriage to Donald G. Lavoie. We affirm.
In May 1997, Donald filed a petition for dissolution of marriage which acknowledged that the trial court had determined that his wife was totally incapacitated as a result of Alzheimer's disease. The plenary guardian appointed by the court for Madeline subsequently entered into a stipulation with Donald to a final judgment of dissolution of marriage which did not include releases of claims by either spouse against the other. Donald was ordered to pay alimony of $400 per month, and the marital assets valued at $184,531 were equally divided. To achieve the equal distribution, Donald and the guardian agreed that Donald would receive $11,165 of Madeline's Individual Retirement Account (IRA), and Madeline would retain the balance of $31,835. Madeline had opened the IRA in 1995 and had designated Donald as the beneficiary.
Eight months after the final judgment was entered, Madeline died. No change had been made to the beneficiary designation of Madeline's IRA. Consequently, Donald, as the designated beneficiary, sought distribution of not only the $11,165 awarded him in the final judgment of dissolution, but of all of the proceeds of Madeline's IRA. The IRA custodian complied.
As personal representative of her mother's estate, Diane Luszcz filed a motion for contempt and/or to enforce the final judgment of dissolution, seeking for the estate all funds obtained by Donald from Madeline's IRA over and above the $11,165 he was to receive pursuant to the dissolution judgment. The trial court properly denied the motion. See Cooper v. Muccitelli, 682 So.2d 77 (Fla.1996).
In Cooper, the parties' marriage was dissolved pursuant to a separation agreement which did not mention two life insurance policies the husband had procured during the marriage. He had named his wife as the primary beneficiary on both policies and his sister as the secondary beneficiary on one of the policies. Subsequent to the divorce, the husband changed the beneficiary designation on only one of the policies. After his death, the wife and the sister both sought the proceeds of the unchanged policy on which they had been named, respectively, the primary and secondary beneficiaries. The trial court as well as this court, Cooper v. Muccitelli, 661 So.2d 52 (Fla. 2d DCA 1996), and the supreme court all agreed that the wife was entitled to the proceeds. 682 So.2d 77. Noting that the parties had released all claims against each other in the dissolution of their marriage, the supreme court concluded that the husband was free to name whomever he desired as the beneficiary of the subject policy. To determine whom the husband had designated as the beneficiary, the court stated that it need look no further than the plain language of the policy. The husband had never changed the designation of the wife as the primary beneficiary, and she was therefore entitled to the policy proceeds. The court noted the impossible position the carrier would be placed in under a contrary holding: "the carrier could never be certain whom to pay in such a situation without going to court, in spite of what the policy said or how clearly it was worded." 682 So.2d at 79. It also noted, however, that "a settlement agreement that specifically requires one of the parties to maintain a named individual as beneficiary will control the disposition of proceeds upon notice to the insurer." Id. at 79 n. 1.
The personal representative urges this court to follow Vaughan v. Vaughan, 741 So.2d 1221 (Fla. 2d DCA 1999). In Vaughan, the parties' marital settlement agreement required the husband to transfer part of the value of his IRA to the wife, which he did. The husband had named the wife the primary beneficiary and the daughter the secondary beneficiary when he established the IRA. He did not change those designations after the divorce. After the husband died, the parties' daughter filed a declaratory action requesting that the trial court award the IRA proceeds to her. In reliance on Cooper, the court entered a summary judgment denying the daughter's request. This court reversed, distinguishing Cooper on the grounds that the term policy in that case was not a marital asset and it was not referenced in the final judgment of dissolution. This court concluded that the Vaughans' release of all claims against the estate of the other in the settlement agreement and the acknowledgment that the settlement agreement superseded any prior understanding or agreement between the parties controlled over the IRA beneficiary designation.
We decline to follow Vaughan. Instead, we recede from that case with regard to its disposition of the IRA proceeds. An IRA is a contract with an institution that involves a third-party beneficiary designation. The rights of a spouse who has been named a beneficiary of an IRA arise from that contract, not from the marital relationship. Further, a beneficiary's rights to proceeds do not attach until the IRA owner's death. Until then, the beneficiary merely has an expectancy in the IRA because until the owner's death, the owner can do with the IRA as desired, including changing the beneficiary designation or cashing out the account altogether. See Waller v. Pope, 715 So.2d 958 (Fla. 2d DCA 1998); Cooper, 661 So.2d 52. Upon the IRA owner's death, however, the beneficiary's expectancy becomes an interest that attaches to the proceeds of the IRA, and those proceeds pass directly to the beneficiary; they do not pass through the estate. See Waller, 715 So.2d 958; Cooper, 661 So.2d 52. See also Graves v. Summit Bank, 541 N.E.2d 974 (Ind.Ct.App.1989). Unless the dissolution judgment requires a spouse to name a particular beneficiary as a condition of a dissolution of marriage, the owner of the IRA is free to name whomever desired as the beneficiary. This fact applies to the balance of an IRA remaining where a spouse is required to transfer part of that IRA as a condition of the dissolution. Upon the IRA owner's death, the institution need look no further than the IRA contract to determine the beneficiary. Otherwise, as pointed out by the supreme court in Cooper, the institution could never be certain whom to pay and would nearly always have to resort to going to court. In the end, it is the IRA owner's responsibility to change the beneficiary designation if a change is desired. Some marriages do end amicably and with a spouse desiring to maintain an ex-spouse as a beneficiary.
This rule applies even in circumstances such as in this case where the IRA owner has been declared incapacitated before the dissolution of her marriage. Madeline designated her husband as the beneficiary of her IRA when she established it. Although her husband divorced her after her incapacity, the settlement he reached with her guardian did not call for a change in the beneficiary designation of the IRA; it only called for a transfer of part of the value of the IRA to him in order to achieve an equal distribution of marital assets. Therefore, Donald remained the beneficiary of Madeline's IRA and the trial court properly did not disturb the distribution to him of the proceeds of that IRA.
Accordingly, we recede from the IRA holding in Vaughan and conclude that the beneficiary designation in an IRA contract controls unless the IRA owner was required to designate a particular beneficiary as a condition of a dissolution of marriage. We also conclude that the beneficiary designation in an IRA contract controls over that part of an IRA the owner was awarded in a dissolution of marriage. Because an IRA is a contract with an institution, not with a spouse, this holding applies regardless of whether the parties to the dissolution have executed releases.
We note that in In re Estate of Dellinger, 760 So.2d 1016 (Fla. 4th DCA 2000), the Fourth District was faced with a situation identical to that in Cooper except that an IRA rather than an insurance policy was involved. The court held that "[w]here a separation agreement does not include IRA proceeds, courts 'need look no further than the plain language of the policy' to determine who the decedent intended as beneficiary of the proceeds." Id. at 1017 (citing Cooper, 682 So.2d 77). Although Dellinger can be read to imply that where a separation agreement does include IRA proceeds, the courts would have to look further than the IRA contract to determine the beneficiary, we decline to express conflict with Dellinger because it does not expressly conflict with our holding in the present case.
Affirmed.
PATTERSON, C.J., THREADGILL, PARKER, ALTENBERND, NORTHCUTT, GREEN, CASANUEVA, STRINGER, DAVIS, SILBERMAN, JJ., Concur.
BLUE, J., Dissents with opinion, in which FULMER and SALCINES, JJ., Concur.
. The trial court aptly noted that it made no ruling on the liability, if any, of the guardian for failing to review the wife's IRA and change the beneficiary, as that issue was not before the court.
. We note that although the Florida Legislature has declared that a provision in the will of a married person that pertains to that person's spouse becomes void upon the annulment or dissolution of the parties' marriage, § 732.507, Fla. Stat. (2000), there is no similar statute regarding beneficiary designations on IRAs or life insurance policies.
. Other jurisdictions have reached similar conclusions. See In re Estate of Rock, 612 N.W.2d 891 (Minn.Ct.App.2000); East v. PaineWebber, Inc., 131 Md.App. 302, 748 A.2d 1082 (Md.2000); Graves v. Summit Bank, 541 N.E.2d 974 (Ind.Ct.App.1989).