≡ Menu
≡ Menu

Understanding Your Florida Beneficiary Rights

In estate and contract law, a “beneficiary” is simply someone who has the legal right to receive the benefits of an instrument or contract.  A beneficiary of a will, for example, has the right to receive distributions of estate assets through the will.  Or a trust’s beneficiary is someone who receives disbursements of trust assets or income—that is, the person the trust is designed to benefit. Similarly, a Florida life insurance policy’s beneficiary holds the right to receive the policy’s payout when it is triggered, and the designated beneficiary of a retirement account automatically accedes to the account upon the owner’s death. Florida beneficiary rights then would concern the right to receive benefits from these kinds of assets in Florida usually distributed from a Florida last will or Florida revocable or irrevocable trust.

Understanding Florida Beneficiary Rights

It’s important to note, though, that the right to receive payments or assets is not the only right enjoyed by beneficiaries.  Under Florida law, beneficiaries are afforded numerous other privileges and protections, depending upon the vehicle through which they stand to benefit.  If you’re a designated beneficiary under a will, trust, insurance policy, or other instrument, a familiarity with all of your legal and contractual rights allows you to better understand and take advantage of your position as a beneficiary.

Rights of Beneficiaries and Heirs in Florida Probate

Although the two terms are often used interchangeably, there is a distinction between an “heir” and a “beneficiary” in Florida probate law.  A “beneficiary” in a Florida probate is someone named in a will and who has a right or potential right to receive wealth transferred through the will.  An “heir,” on the other hand, stands to inherit—under state intestate succession laws—wealth from a decedent who did not have a will.  Heirs are usually relatives of the decedent, but beneficiaries don’t necessarily have to be.

Although we will primarily use the term “beneficiary,” heirs of intestate estates have most of the same rights as beneficiaries—except when the right specifically relates to a will.  Both heirs and beneficiaries have important “information rights,” or rights to be kept informed as estate administration progresses and notified of certain important events.  Florida beneficiary rights require that Florida beneficiaries must be provided notice that an estate has been opened and that a personal representative has been appointed to act for the estate.  If the estate is involved in any probate or trust litigation in Florida or if any adversary proceedings are commenced, beneficiaries have the right to receive notice and stay informed of the litigation status.

Florida beneficiary rights also require that beneficiaries also have the right to receive an accounting of the estate from the personal representative.  The accounting must include an inventory of all estate assets in Florida and perhaps elsewhere, with each asset’s appraised value, and a statement of all transactions involving the estate.  Transactions will include claims and expenses paid out and any receivables or income that comes in.  If the estate includes a safe deposit box, a beneficiary can also request an accounting of its contents.

A beneficiary has the right to object to certain matters and petition the probate court for clarification of others.  Within 90 days of receiving notice of the estate, a beneficiary can contest a will or appointment of the personal representative.  If the identities or precise inheritances of an estate’s beneficiaries are not clear, potential beneficiaries can petition the court for a determination of either.

Because beneficiaries stand to gain from an estate, they have rights that help ensure estate assets are properly protected.  Beneficiaries can object to claims filed by creditors (though that is usually the personal representative’s duty) and can petition the court for a determination as to whether an asset is exempt, including under Florida’s homestead exemption.

In general, Florida beneficiary rights require that a beneficiary has the right to be treated fairly by the Florida personal representative, who must always act in the best interest of the estate.  If a personal representative is acting improperly, a beneficiary can petition the probate court for removal, contest a personal representative’s claim for compensation if it is unreasonable, or contest a transaction if the personal representative has a conflict of interest.

A beneficiary can expect to receive bequests with reasonable promptness, including through an interim distribution or family allowance when appropriate.  Both allow estate assets to be disbursed while the estate is still pending.  The promptness that a beneficiary can expect varies based on the circumstances of the estate. An estate with substantial assets in Florida, limited creditors, and specific bequests of assets will allow for quicker distributions than an estate that is entangled in litigation, has numerous creditor claims to sort out, and describes inheritances as a percentage of the estate’s value.

In many ways, the duties owed by a personal representative to an estate’s beneficiaries are similar to the duties owed by a trustee to trust beneficiaries. Both a trustee and a personal representative are fiduciaries, charged with putting others’ interests above their own.  So, it isn’t surprising that the beneficiaries of a trust have many of the same rights as an estate’s beneficiaries.

Rights of Trust Beneficiaries in Florida

The rights of a Florida trust beneficiary are largely derived from the duties of the trust’s trustee.  Trustees must administer their trusts in good faith, in accordance with the best interests of beneficiaries and the purpose of the trust.  Beneficiaries have a right to a properly administered trust, managed in accordance with Florida trust law and the trust’s purpose.  If there are any failings, beneficiaries can hold the trustee accountable.

A trustee’s duty to act in good faith and in beneficiaries’ best interests includes a duty to avoid conflicts of interest and self-dealing, and to reasonably limit trust expenses.  If a trust has more than one beneficiary, the trustee must act impartially toward the beneficiaries. In the event of any improper dealing or expenses, beneficiaries can petition a court to void inappropriate transactions or to hold the trustee liable for losses incurred by the trust.

As with beneficiaries in probate, Florida trust law provides trust beneficiaries with substantial information rights.  A beneficiary generally has the right to be kept “reasonably informed of the trust and its administration.” This includes the right to receive an annual accounting from the trustee, which must provide a record of all transactions involving the trust and a statement of all gains, losses, distributions, and fees.  The required disclosure of fees includes all fees paid by the trust to the trustee and any professionals hired by the trustee on the trust’s behalf.

Florida beneficiary rights require that beneficiaries have the right to insist that the trustee protect trust assets—through appropriate legal action when necessary—and invest prudently.  If the trustee has special skills, a beneficiary can expect that those skills will be used to benefit the trust.  A trustee who fails to meet these standards potentially breaches the fiduciary duty owed to beneficiaries, in which case a beneficiary has the right to hold the trustee personally liable for any resulting losses and to petition a court for appointment of a different trustee.

Florida Beneficiary Contractual Rights

Other Types of Beneficiaries:  P/O/D, T/O/D, Retirement Accounts, and Life Insurance

“Payment on Death” (POD) and “Transfer on Death” (TOD) in Florida are similar designations allowing an asset’s title to automatically pass to a named beneficiary upon the current owner’s death.  In Florida, POD designations are commonly used for bank and money-market accounts and CD’s.  TOD designations are typically associated with stocks, bonds, and brokerage accounts.  The big advantage of either designation is that, after the owner dies, the asset vests in the beneficiary with no need for probate.

A POD or TOD designee has the right to receive the subject asset in the future, at the time of the owner’s death, but doesn’t acquire a present interest when the designation is made, like with a life interest in real estate.  So, where a remainderman of a life estate has a right to insist that the real estate be maintained and preserved to protect the value of the remainder interest, a TOD or POD beneficiary has no such right.

Retirement accounts, such as 401k’s and IRAs in Florida, allow the account owner to designate a beneficiary to accede to the account upon the owner’s death.  As with a POD beneficiary, a retirement account beneficiary does not need to go through probate—the account passes automatically.

When the account transfers, the beneficiary has three basic options for accepting it (or four if the beneficiary is a spouse):  withdraw the money and pay the income taxes now; leave the account in place and accept required minimum distributions over the beneficiary’s life expectancy; or roll over the account into an “inherited IRA,” which allows for continued tax deferral but no additional contributions.  A beneficiary spouse can do any of the above or roll over the account into an IRA in the name of the surviving spouse, which is then treated as if it had always belonged to the surviving spouse.

Life insurance beneficiaries have the right to receive a policy’s payout upon the death of the insured.  With most policies, the beneficiary has numerous settlement options to choose from, ranging from a single, lump-sum payment to an annuitized “life income” payout that provides regular guaranteed distributions for the rest of the beneficiary’s life.  Under Florida’s exemption laws, life insurance proceeds are protected from attachment by the beneficiary’s creditors in most cases.  And beneficiaries can usually claim life insurance proceeds as an exempt asset in bankruptcy as well.

Being a beneficiary is generally a good thing.  After all, by definition you get to be the one who stands to benefit.  However, there are times when beneficiaries need to take action to ensure they receive the full benefits of the position.  If you have questions or need legal representation relating to rights you hold as a beneficiary under Florida law, an attorney experienced with Florida’s trusts and estates laws can help you to better understand and protect your interests.

Steve Gibbs, Esq.

 

18 comments… add one
  • Tonya Miller-Turczyn October 29, 2019, 10:52 am

    Would you be willing to come and do a talk on Florida Beneficary Rights at Keller Willimas Peace River Patners in Punta Gorda, Fl.

    Tonya
    941.505.1031

    • gibbslawfl October 29, 2019, 11:13 am

      Hello Tonya, thanks for commenting and for your kind invitation. I’m always willing to come and talk to groups. The question is always scheduling as I am currently back and forth between 2 offices. Let me know if you’re flexible and perhaps sometime during the season we can arrange something.

      Best, Steve Gibbs, Esq.

  • Mayra johnston April 24, 2020, 9:44 am

    I recently lost a sister. She resided in Florida. She had a live in companion. Her companion is recently in a coma and has been since state lockdown was enforced. Other health issue placed him there in hospital.she passed 4/13/20. She had no living will,but a small life insurance policy that found recently found by the sister who is overlooking their home they shared. She obviously passed before him,and he was listed as beneficiary along with me as secondary. I live in New Jersey . Since her cam panino is not responsive and surely can’t in any way function,how is her policy going to handled so the funds of the policy can be used to pay for my sisters burial,if her companion is unable and in fact pass himself? Horrible.!

    • gibbslawfl April 24, 2020, 12:15 pm

      Hello Mayra, thanks for commenting. Good question and a general answer without looking into this is that even though your sister’s partner is unresponsive, because he is still living he is entitled to the proceeds. If he, as the beneficiary, has a representative such as a power of attorney, then that person can use the proceeds for his benefit.

      Best,

      Steve Gibbs, Esq.

  • James and Karen April 29, 2020, 3:18 pm

    Hi my husband’s parents lived in Florida My father in law passed away. My mother in law is still alive . They have a trust set up with a layer .2 of my sisters are POA for Mom there are 8 children in the family. We where told that all 8 kids get the house once Mom passes. My sister will not let me see a copy of the trust , which she has or the Paperwork .
    If the trust is revocable doesn’t it become irrevocable when one parent passed?
    My sister called the lawyer handling the matter and told her not to speak to me !
    As a beneficiary don’t I have a right to see the trust ? Please help

    • gibbslawfl April 29, 2020, 3:41 pm

      Hello James and Karen, sorry to hear about your situation; although, I assure you it is pretty common. The short answer is that as a beneficiary, you absolutely have rights, such as the right to a copy of the trust and an accounting, etc. And, yes the trust would become irrevocable upon the last settlor’s death. If you’re not getting cooperation, you may nee to get FL legal help to get proper attention. Let us know if we can help further by connecting with Gene at admin@gibbslawfl.com.

      Best, Steve Gibbs, Esq.

  • Royce Rivard May 6, 2020, 8:04 pm

    Dear Atty. Gibbs my name is Royce Rivard I’m in a beneficiary of the Florida trust set up by my grandfather and a second trust that was funded with gifts to my father.
    Is it possible to get a consultation I have several questions that I cannot get the personal representative or trustee to give me a straight answer on the value of grandfather’s
    The accounts are worth far less then my original statement and the trustee resigned.
    Trust statements arrived with many different titles not matching the title of the trust

    • gibbslawfl May 6, 2020, 11:22 pm

      Hello Royce, thanks for your inquiry. You can get a consultation scheduled by connecting with Gene at admin@gibbslawfl.com and leaving your best contact information. I’ll look forward to connecting.

      Best, Steve Gibbs, Esq.

  • Randall S Austin May 25, 2020, 12:08 pm

    I am a Benificiary of my Father’s estate who passed a year ago April 19th. I live in Georgia and my two siblings live in Florida. My sister is in charge of handling Will.
    I was never contacted about his posessions which was clearly stated in his Will everything split 3ways. So I got no posessions of his.
    I was actually threatened by my brother not to keep bothering them when he got sick before passing he called my wife and made threats to me through her. You have to understand we are all estranged.
    I got 1/3 of his life insurance and 1/3 of a retirement account now there is still a condominium he had
    Sister will not disclose any financial records to me I’m lost in this living in Georgia and she won’t acknowledge any text I send so I may need help. Or sue her
    Randall Austin

    • gibbslawfl May 25, 2020, 1:32 pm

      Hi Randall, these kinds of situations are exactly why I wrote this article. You’ll most likely need to hire a lawyer in the state in which your father resided in order to have your rights protected. Let us know if we can help by e-mailing Gene at admin@gibbslawfl.com.

      Best,

      Steve Gibbs, Esq.

  • Elizabeth June 7, 2020, 8:07 am

    Thank you for allowing us to comment here with questions. After my husband’s death I found a life insurance policy that he had created prior to us marrying when our child was born. I was the beneficiary of the majority of the policy with a member of his family the beneficiary of the remainder. Again this policy was made prior to us marrying. Is there anything to be done, to correct this?

    • gibbslawfl June 8, 2020, 12:09 pm

      Hello Elizabeth, thanks for reading and commenting. When someone passes away, the beneficiary is set in stone at that point in my experience. It’s different if someone becomes incapacitated and and a spouse has a durable power of attorney. That being the case, if you feel that mistakes were made there is always a possibility of a claim under the elective share laws in Florida under the elective share laws which are in place to protect spouses.

      Best, Steve Gibbs, Esq.

  • stela June 15, 2020, 10:59 am

    hello good day i am stela from Philippines. i have friend from Florida who passed away last February 2020..but before he died he told me that he made me as his beneficiaries… i dont know the name of insurance company.. what should i do? should i just wait that someone reach me out if im really one of the beneficiary of my friends insurance?.. and contacted his work company thru messenger since i dont know the insurance company but they just seen it.. no response at all😩

    • gibbslawfl June 17, 2020, 10:57 am

      Hello Stela, sorry to hear about your situation. Honestly, if he didn’t tell you the company, the only other way is find out who is handling his estate. If he has other family, you might start there.

      Best,

      Steve Gibbs, Esq.

  • Donna July 1, 2020, 10:51 am

    My mother in law recently passed. She always told my husband and myself that she had 5 life insurance policies. One for each of her 4 children, and one for her burial expenses. She had the one child (my husband’s sister) listed as beneficiary and entrusted her to disperse the money equally. There was no written will. She honestly believed her daughter would fulfill her final wishes, we don’t have as much faith. We are not sure if my mother in law was able to keep up with all the policies towards the end of her life but we do know that she had her burial policy. I believe it was a $20,000 policy. My sister in law opted to have my mother in law cremated with a cost of only $1000. My sister in law is being less than forthcoming regarding my mother in law’s policies. Caught between a rock and a hard place here. Don’t want to fight over money, but also want my sister in law to fulfill my mother in law’s wishes. With her being listed as beneficiary, and no written will, is she entitled to keep all payouts? Thank you.

    • gibbslawfl July 1, 2020, 3:14 pm

      Hello Donna and thanks for commenting. This situation looks a bit complicated; however, as a general rule the beneficiary designated would dictate who owns the proceeds, especially in the absence of a valid will or trust. To be certain, you would need a consultation with a FL estate attorney to look at assets and policy designations in more detail.

      Best, Steve Gibbs, Esq.

  • Glenda Brewer July 27, 2020, 5:13 pm

    Mr Gibbs,
    A close uncle of mine lived and died in Florida, he has shared with us we were in his will. His executor is his CPA who lives in CA. When we wanted to come to Florida after my uncles passing we were told the house is locked up, we can not see his estate. He is having appraiser there and all items will be sold.
    Who notifies beneficiaries? And when after death do they notify a beneficiary. And when do they supply us a will or trust that shows the beneficiary? After the estate has been gone through? We live in WA. State.
    Thank You.

    • gibbslawfl July 28, 2020, 9:33 pm

      Hello Glenda, thanks for commenting. If there is a trust you would be entitled to a copy within a reasonable time. A will would be filed with the probate court and the county thus would be a public record. It is typical to secure the estate upon someone passing; however, I’m a bit surprised there hasn’t been more details shared with the heirs. All of the above should ideally be done within a few months of the date of death.

      I hope this helps.

      Best, Steve Gibbs, Esq.

Leave a Comment