Does Life Insurance Have to Go Through Probate Law in The Florida Keys?

One question that many people ask is whether life insurance must go through probate law in the Florida Keys. The simple answer is, generally, no. The beneficiaries designated in the individual’s policy will usually receive the proceeds from life insurance. Therefore, Florida does not usually consider them to be probate assets. However, cases aren’t always simple. Here, we take a closer look at how Florida probate law handles life insurance proceeds.

Are Life Insurance Proceeds Estate Assets?

Life insurance policies name a beneficiary. When the insured dies, the proceeds of his or her insurance are, therefore, directly paid to that beneficiary. His or her estate doesn’t receive any payments. This means Florida doesn’t consider any death benefits paid under a life insurance policy to be estate assets. 

Money paid out to beneficiaries on a life insurance policy isn’t technically your money. The money belongs to your insurance company. When you die, your insurance company has a legal obligation to pay your chosen beneficiary. That money, therefore, isn’t part of the estate. You can’t control who receives it in your will. Instead, you are controlling who will receive it by designating your beneficiary when making an application for life insurance. Should you change your mind about your beneficiary, you can only do so by completing paperwork provided by your insurer. Your will cannot change that beneficiary without the completion of the appropriate insurance forms. 

Are There Any Exceptions?

There are always exceptions to the rule. There are a few cases in which an insurance company handles the life insurance proceeds differently. Sometimes, an insurance policy will be directly payable to the estate of the decedent. This happens when there is no beneficiary in the policy. It also happens when the beneficiary has died before the policyholder, and he or she didn’t name a new beneficiary. Should this happen, the funds from the life insurance policy become estate assets. They, therefore, must go through probate.

Many life insurance policies only pay the insurance money directly to the beneficiary if the beneficiary survives the insured person. If the beneficiary dies before the insured, the insurance company will consider the life insurance funds to be estate assets. And, just like any bank account owned by the decedent, the law requires it to go through Florida probate.

How Can I Ensure That My Insurance Proceeds Don’t Go Through Probate?

You can ensure your life insurance policy proceeds don’t go through probate by keeping your policy up to date. If you’ve been through a divorce, it’s especially important to check who your life insurance policy beneficiary is. In these situations, many people forget that they haven’t changed their named beneficiaries. This often leads to problems after they pass away. Fortunately, in Florida, there was a legal change made recently. This change invalidates the designation of an ex-spouse after a divorce. Nevertheless, you should make sure you have both a primary and a contingent beneficiary named on your policy. The funds from your policy will, then, not have to go through probate law in the Florida Keys.

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