When someone dies in Florida, assets or property they own can be transferred in several different ways and via several different means, only one of which involves a Will or Trust. This blog will consider several of these different means and how they relate in priority.
Assets and property can be transferred at death in at least the following ways:
1. By operation of law. An example would be where two people own property “as joint tenants with right of survivorship.” Upon the death of the first person, the property vests in the name of the survivor by operation of law, i.e. no action is need to accomplish the transfer. The property simply becomes theirs.
2. By beneficiary designation. An example would be where a person has a life insurance policy naming a beneficiary. Upon the death of the insured person, the benefits are payable to the beneficiary. Unlike transfer by operation of law, in this case the beneficiary would have to apply to receive the death benefits.
3. By devise in the Will or Trust. When a person dies having a Will or Trust, their property will pass according to the terms set forth. However, this would only apply to property not subject to transfer by operation of law or by beneficiary designation.
Perhaps an example will illustrate these concepts. Consider a situation where Grandma owns three bank accounts. One account is joint with her daughter, Sally. The second account has a pay-on-death (“POD”) designation naming her niece, Bobby Jo (a POD is the bank’s version of a beneficiary designation). The third bank account is only in Grandma’s name and has no POD designation. Grandma’s Will states that all of her bank accounts are devised to her nephew, John. So which accounts does John receive under the Will? The answer is: only the third account. The first becomes Sally’s upon Grandma’s death and the second becomes Bobby Jo’s upon Grandma’s death. The Will has no effect on those two accounts. In essence, the JTWROS and beneficiary designations take priority over the Will or Trust.
When you see these nuances, you can see why having the advice of an experienced estate planning lawyer can be important.
