When someone passes away, Florida law requires a process called probate. Probate is a court-supervised procedure that handles the distribution of a person’s assets after death. However, some assets can pass directly to others, without going through probate, by using a beneficiary designation.
What property can have a beneficiary designation?
Many different types of assets allow for a beneficiary designation. Common examples include life insurance policies, retirement accounts like 401(k)s and IRAs, payable-on-death (POD) bank accounts (as per Florida Statute 655.82), and transfer-on-death (TOD) accounts for stocks and bonds (as per Florida Statute 711.50). A beneficiary designation form tells the financial institution who should receive the asset when the account holder dies.
How designations work
A beneficiary designation directs the asset to the named person automatically upon the account holder’s death. The beneficiary typically needs to provide a death certificate to the financial institution. Then, the institution transfers the asset directly to the beneficiary. This process happens outside of probate court, which can save time and money.
Important note on wills
It is vital to understand that beneficiary designations usually take precedence over instructions in a will. If a will says one person should inherit an asset, but a different person is named as the beneficiary on the account, the beneficiary designation controls who receives the asset.
These matters can sometimes become complex. If questions arise about beneficiary designations or the probate process in Florida, consulting with someone knowledgeable can provide clarity.