Florida Probate Law Change: Inheritance Rights When Benefits Paid to a Revocable Trust –retroactive law applies NOW
Florida Probate Code section 733.808 has changed and you should know about it if you are involved with a Palm Beach probate.
Florida Probate Code Change to Inheritances
- Florida Probate Code section 733.808 was changed recently
- This part of the Florida Probate Code deals with death benefits payable to a trustee, typically of a revocable trust (but not always)
- Inheritances by a designation of a beneficiary
- For example:
- life insurance policies
- retirement accounts and IRAs
- annuity contracts
Beneficiary Rights vs. Executor of the Will
- Can death benefits or survivor rights be used to pay expenses of the Palm Beach probate?
- What if a retired executive living in Palm Beach Gardens, Florida passes away
- Let’s say she had a $5 Million life insurance policy, a $3 Million joint bank account and a $1 Million mutual fund account with a beneficiary
- Can those Palm Beach accounts be used to pay her last expenses, her debts, the probate fees, her final income tax payments to the IRS, and expenses , or….. not ?
- Section (4) of this probate code section says generally “no”
Revocable Trusts and Florida Probate
- Remember, Florida revocable trusts are outside of probate
- There is a trustee of a revocable trust which is a different legal position than an executor of your will (also called a Personal Representative of your estate or probate or will)…even though the trustee and executor may be the same person; they have different duties which may overlap
- So, subection (4) of this probate statute makes it clear, or clearer, that those proceeds don’t create inheritance rights for those who inherit under the Florida will; and those benefits can’t be used to pay expenses of probate or estate administration in Palm Beach probates or Florida probates in general……
- UNLESS the trust agreement or will EXPRESSLY refers to this section of Florida probate law, also called the Florida Probate Code
- So, if you are the executor in Palm Beach County, or a trustee of someone’s revocable living trust, know what to do with life insurance proceeds, death benefits and pay on death money which “goes” to a trust
- These changes to Florida estate law are RETROACTIVE