Why Lamar Odom’s hospitalization should serve as a wake up call to anyone going through a divorce: What you need to know about your health care and assets.

November 25, 2015

By Brandon Arkin, Family Law, Estate Planning, Wills & Trusts and Advanced Planning Directives

Many people were shocked when the news broke that Lamar Odom was found unconscious from a drug overdose in a Nevada brothel on October 13, 2015. Finding out that Khloe Kardashian, his estranged wife, was the person who was legally allowed to make all healthcare decisions for Lamar, left many people asking How did this happen and most importantly could this be prevented?

Khloe Kardashian and Lamar Odom had filed for divorce and the only thing left was for the Judge to stamp the paperwork. However, at the time Lamar Odom was rushed to the emergency room, there was a backlog of paperwork in the California courts and their divorce had not yet been finalized.  Even though one might say they were virtually divorced, Khloe could still make all of Lamar’s healthcare decisions, including the ability to withhold treatment or even terminate life support. For most people going through a divorce, having their soon to be ex-spouse literally hold their life in their hands would be a terrifying thought. Yet, with so much change going on, they understandably might not be thinking about who can make healthcare decisions for them should they become incapacitated.

If you are separated or filing for a divorce, it is essential to review your estate planning documents and beneficiary designations on your assets.  Below are some documents you might want to consider reviewing or drafting:

Healthcare Care Surrogate 

Florida Statute 765.401 provides who can make healthcare decisions for you if you have not designated someone in advance. 

In the event you have not assigned a Health Care Surrogate, 765.401 dictates who can be your healthcare proxy and make medical decisions in the following order:

(a) The judicially appointed guardian of the patient or the guardian advocate of the person having a developmental disability

(b) The patient’s spouse

(c) An adult child of the patient, or if the patient has more than one adult child, a majority of the adult children who are reasonably available for consultation

(d) A parent of the patient

(e) The adult sibling of the patient or, if the patient has more than one sibling, a majority of the adult siblings who are reasonably available for consultation

(f) An adult relative of the patient who has exhibited special care and concern for the patient and who has maintained regular contact with the patient and who is familiar with the patient’s activities, health, and religious or moral beliefs

(g) A close friend of the patient

(h) A clinical social worker licensed pursuant to chapter 491, or who is a graduate of a court-approved guardianship program. Such a proxy must be selected by the provider’s bioethics committee and must not be employed by the provider. If the provider does not have a bioethics committee, then such a proxy may be chosen through an arrangement with the bioethics committee of another provider. The proxy will be notified that, upon request, the provider shall make available a second physician, not involved in the patient’s care to assist the proxy in evaluating treatment. Decisions to withhold or withdraw life-prolonging procedures will be reviewed by the facility’s bioethics committee. Documentation of efforts to locate proxies from prior classes must be recorded in the patient’s records.

As you can see from the above cited statute, Florida has laid out who has priority to make your healthcare decisions if you are unable to make them yourself.  For many people this order falls in line with what they would want, but for some people these selections may be problematic. For example, if you hold a particular set of religious beliefs that are not shared by your children or other family members, even though they are supposed to respect your wishes there is a chance they may not. Other problems arise if you are estranged from your children or your spouse. Also, if you have more than one child and they cannot agree on your care, this could cause delay in treatment and end up with your children fighting in court to get the right to make your healthcare decisions.

The best way to protect yourself in these situations is by executing a healthcare surrogate document in advance. This is a document where you can designate the person of your choice to make healthcare decisions for you. In the past, they could only access your medical records or make decisions on your behalf if a doctored declared you were unable to make your own decisions.

As of October 1, 2015, you can now designate that your healthcare surrogate can access medical records and make decisions for you even though you are not incapacitated. It is important to note that if you have capacity you still have the final say in your medical treatment. Pursuant to Florida Statute 765.202, in order for your healthcare surrogate to be valid it must be signed by the principal in the presence of two subscribing adult witnesses. A principal unable to sign the instrument may, in the presence of witnesses, direct that another person sign the principal’s name. The person designated as surrogate shall not act as witness to the execution of the document designating the health care surrogate and at least one person who acts as a witness shall be neither the principal’s spouse nor blood relative.

If you have designated your spouse as your healthcare surrogate, Florida Statute 765.104, provides such authority terminates upon an annulment or dissolution of the marriage. Remember this is upon the finalization of the divorce and not upon the filing for divorce. Upon filing for divorce, you should immediately execute a new healthcare surrogate unless you still want your spouse making your healthcare decisions for you.  

Power of Attorney

A Power of Attorney is a legal document that you can execute that allows another person of your choosing to carry out various legal or financial transactions on your behalf. You can give someone broad power or you can tailor the Power of Attorney to apply to a limited situation or for a specified amount of time. You can specify if you want the Power of Attorney to stay valid after you have become incapacitated and can no longer make your own decisions. Unlike the Healthcare Surrogate, a Power of Attorney automatically terminates upon the filing of divorce or annulment pursuant to Florida Statue 709.2109(2)(b). Once you have filed for divorce you should create a new Power of Attorney in case something happens to you and you are no longer able to make legal or financial decisions for yourself.

Wills, Trusts and Beneficiary Designations 

When it comes to transferring your assets upon death, the most common methods are: by designating who you want as your beneficiaries through a Will or Trust, and listing a beneficiary or a pay on death designation directly on the asset itself. If you have designated your spouse as your beneficiary via any of those methods, such designation will terminate upon the annulment or final judgment of dissolution of marriage. However, since Florida has no legal separation, simply separating will not sever the legal ties between a married couple. Many people think that once a couple has become estranged and lived apart for many years, their spouse will not be able to inherit from them. This is not the case. It is also important to remember, Florida has no common law marriage. No matter how long you and your partner have been together, they will not have any inheritance rights unless you plan appropriately.

If you should pass away with none of the above in place, then under Florida law all your assets will pass to your spouse unless you have children from another relationship—in which case, half will go to your spouse and half to the kids. Ensuring your estranged spouse does not inherit pending the finalization of your divorce is a bit trickier, due to Florida laws which protect spouse from disinheritance. Under Florida’s elective share statute, a spouse can elect to get 30% of their spouse elective estate. The elective estate consists of:

  1. Property subject to probate
  2. The deceased spouse’s ownership interest in property passing by right of survivorship
  3. Property held in a trust which was revocable by the deceased
  4. Property irrevocably transferred by the deceased spouse if the deceased spouse retained the right to income from the property, the use of the property, or if another person (other than the surviving spouse) had the power to distribute the property to the deceased spouse
  5. The deceased spouse’s ownership interest in the cash surrender value of life insurance on the deceased spouse’s life
  6. Death benefits payable under most retirement plans (such as IRA’s and 401(k)’s)
  7. Certain property transferred one-year preceding death

The elective estate does not include:

  1. Certain irrevocable transfers
  2. A transfer made with the informed written consent of the surviving spouse
  3. The deceased spouse’s half of community property

Besides the elective share, Florida also provides a protection regarding the homestead. Where the spouse can live in the home for the remainder of their life, or if elected, within 6 months can take 50% ownership interest with the surviving heir. The only way to get around these protections is with a valid prenuptial or postnuptial agreement.

When it comes to assets with beneficiary or pay on death designations most of these designations will terminate upon an annulment or final judgment of dissolution of marriage. Florida statute 732.703(2) provides for the termination of these assets upon the termination of the marriage:

  1. A life insurance policy, qualified annuity, or other similar tax-deferred contract held within an employee benefit plan
  2. An employee benefit plan
  3. An individual retirement account described in s. 408 or s. 408A of the Internal Revenue Code of 1986, including an individual retirement annuity described in s. 408(b) of the Internal Revenue Code of 1986
  4. A payable-on-death account
  5. A security or other account registered in a transfer-on-death form
  6. A life insurance policy, annuity, or other similar contract that is not held within an employee benefit plan or a tax-qualified retirement account

This section does not apply to the following:

  1. To the extent that controlling federal law provides otherwise
  2. If the governing instrument is signed by the decedent, or on behalf of the decedent, after the order of dissolution or order declaring the marriage invalid and such governing instrument expressly provides that benefits will be payable to the decedent’s former spouse
  3. To the extent a will or trust governs the disposition of the assets and s. 732.507(2) or s. 736.1005 applies
  4. If the order of dissolution or order declaring the marriage invalid requires that the decedent acquire or maintain the asset for the benefit of a former spouse or children of the marriage, payable upon the death of the decedent either outright or in trust, only if other assets of the decedent fulfilling such a requirement for the benefit of the former spouse or children of the marriage do not exist upon the death of the decedent
  5. If under the terms of the order of dissolution or order declaring the marriage invalid, the decedent could not have unilaterally terminated or modified the ownership of the asset, or its disposition upon the death of the decedent
  6. If the designation of the decedent’s former spouse as a beneficiary is irrevocable under applicable law
  7. If the instrument directing the disposition of the asset at death is governed by the laws of a state other than this state
  8. To an asset held in two or more names as to which the death of one co-owner vests ownership of the asset in the surviving co-owner or co-owners
  9. If the decedent remarries the person whose interest would otherwise have been revoked under this section and the decedent and that person are married to one another at the time of the decedent’s death
  10. State-administered retirement plans under chapter 121.

When going through a divorce you must make sure to take the above into consideration and plan accordingly. Most people assume they will not become incapacitated or pass away before their divorce is finalized. However, as you can see if you don’t plan for the worst your estranged spouse could benefit in ways you never intended.  Everyone’s divorce is unique, as is their estate planning. You should always consult with an attorney to help make sure you are protected and have the proper documents in place.