Clients sometimes ask this question--often because they are confused about the relationship between their Will and their life insurance policy. After all, doesn't the Will designate a person's beneficiaries? This blog will clarify the relationship between the Will and life insurance.
With a life insurance policy, the owner can designate beneficiaries, and at the death of the owner, the policy pays the death benefits directly to the designated beneficiaries. The benefits are paid in accordance with the contractual terms of the policy. So long as a beneficiary is named, no probate is required and the person's Last Will & Testament does not come into play. This is one of the nice benefits of life insurance.
As a probate and estate attorney, I'm often asked whether life insurance goes through or is subject to probate. The answer is usually "no." Life insurance is one of those assets that does not normally go through probate. This is due to the fact that the policy names a beneficiary. As a result, at the death of the insured, the death benefits are paid to the beneficiary directly, not to the estate.
Many states, including Florida, have laws which require life insurance policies to become incontestable after a period of time. As a result, most life insurance policies have a provision entitled "Incontestability." So what does this mean?
Like many states, Florida's probate code includes a "Slayer Statute" located at Section 732.802, Fla. Stat. This statute provides that persons who intentionally kill, or procure the killing, of another person may not receive benefits under the deceased person's Will. The statute also applies to forbid receiving benefits under a life insurance policy covering the deceased person.
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.