Wills and Beneficiary Designations in Florida Estate Planning

Estate planning is a vital process that ensures your assets are distributed according to your wishes. However, it can become complex when multiple legal tools, such as last will and testament (LWT) and beneficiary designations, are involved. In our office, we frequently see situations where people unknowingly create conflicts between their LWT and beneficiary designations, which can result in unintended outcomes. 

In this blog post, we’ll discuss how LWTs and beneficiary designations work in Florida estate planning and why it’s important to consult an experienced Florida Estate Planning Attorney to ensure your estate plan works as intended.

What Are Beneficiary Designations?

In estate planning, many people list a beneficiary on their financial accounts, such as bank accounts, investment accounts, and life insurance policies. This is often done through a POD (Payable on Death) or TOD (Transfer on Death) designation. These designations allow the named beneficiary to inherit the account directly without probate.

Beneficiary designations are a popular choice because they are relatively simple and bypass the lengthy and sometimes costly probate process. With a POD or TOD designation, upon the account holder’s passing, the asset transfers directly to the named beneficiary without the court getting involved.

While this seems like a simple and effective way to handle estate planning, problems can arise if the beneficiary designations conflict with the instructions in your will. Unfortunately, many people are unaware of this potential issue and may unintentionally set up their estate plan in a way that causes disputes or even litigation between family members.

Last Will and Testament vs. Beneficiary Designations: Which Takes Precedence?

One common misunderstanding is the belief that a LWT can override a beneficiary designation. For example, a client may wish to distribute their assets equally among their children through their LWT but name just one child as the POD beneficiary on their bank accounts for convenience.

However, in most cases, the beneficiary designations on these accounts legally trump the LWT. This means that even if your LWT states that your assets should be divided equally, the assets in accounts with beneficiary designations will go directly to the named beneficiary, bypassing the LWT entirely.

This also applies to tools like the Lady Bird Deed, which operates similarly to a POD or TOD. If you name one child as the remainderman (the beneficiary of the deed), that child will inherit the property outright, regardless of the terms in your will. This creates a legally binding transfer of ownership that is difficult to undo once the original account holder or property owner has passed away.

Trusting Your Beneficiary

It’s common for individuals to say, “I trust my child to do the right thing and divide the assets among their siblings.” While this sentiment may hold true, it’s crucial to remember that there is no legal obligation for the named beneficiary to follow the terms of your will. The ownership of the asset passes directly to the beneficiary, and they are under no legal requirement to distribute it according to your wishes, even if it’s outlined in your will.

How an Estate Planning Attorney Can Help

To avoid potential conflicts and ensure your estate plan works as intended, it's essential to consult with a knowledgeable Florida estate planning lawyer. Working with an experienced attorney ensures that your will, beneficiary designations, and other estate planning documents align to reflect your true wishes. 

Contact atCause Law Office for Personalized Guidance

atCause Law Office focuses on helping individuals create comprehensive Florida estate plans that work harmoniously. If you have questions about wills, beneficiary designations, or any aspect of estate planning or elder law in Florida, contact us today. We’re here to help you protect your assets and ensure your wishes are honored. Call us at (727) 477-2255 to schedule a free consultation with one of our non-stuffy attorneys!

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We strongly recommend you consult an attorney for specific legal advice tailored to your circumstances.