As an estate attorney, I sometimes have clients who want to name multiple beneficiaries but do not want each beneficiary to know what the other is to receive. These clients will often ask, is this possible?
When a person executes a Last Will and Testament or a Living Trust, they name their beneficiaries. Upon that person’s death, in Florida those beneficiaries have a right to receive a copy of the Will or Trust. When a beneficiary receives the Will or Trust, they’ll know what everyone else is receiving. In some cases, this poses no problem since the deceased person is not concerned about the beneficiaries knowing what others get. However, on occasion, the person leaving the gifts (known as “devises”) expresses to their estate attorney a desire to keep the devises confidential to the recipient. So is there a way to accomplish this objective, i.e. leave gifts to different beneficiaries such that each doesn’t know what the others are to receive?
There are at least two ways to accomplish this objective. One is through naming persons as beneficiaries or as “pay on death” or POD designees. This usually requires having separate accounts-in the case of financial institutions-or separate policies-in the case of life insurance. Each would name the individual beneficiary or designee and after death, only that person would have a right to know about the amount received. Neither a Will nor Trust would be involved and since the assets pass outside probate, there is no Inventory filed. In essence, the gift is only known by the beneficiary or POD designee and the company paying out the funds. Take, for example, a situation where a woman has three siblings but does not want to leave her assets to them equally. She also does not want to hurt anyone’s feelings. However, if her assets are such that she can designate one sibling as POD on one account, another sibling on another account and the third on a life insurance policy, then she can leave gifts in different amounts to each beneficiary and none of the siblings will know what the other is to receive.
An alternate way to accomplish this goal is to set up separate free-standing Trusts for each beneficiary. This can be a bit more cumbersome and expensive in setting up. However, it allows a person to “fund” each Trust in a particular amount naming a specific beneficiary for each Trust. The beneficiary of one Trust does not have a right to know about the assets or beneficiary of another Trust. For example, if a woman has $2 million among various assets-ranging from real estate to stocks, bonds and cash. She wants to leave her assets to her three siblings but wants $1 million to go to her sister and $1 million to be split among her two brothers. She also does not want any of them to know what the other will receive. If she leaves her intentions to be accomplished by a Will or by a single Trust, then the beneficiaries will know what the others are receiving. If she establishes three Trusts, one for each sibling, she can fund them in the amounts she desires and can accomplish her goal confidentially.
Clearly neither of these solutions is ideal. However, in instances where unequal distribution is desired and the person does not want each beneficiary to know what the other will receive, these offer some alternatives.