By: Barry E. Haimo, Esq.
May 18, 2015
Can I Name Alternate Beneficiaries in My Will?
HAIMO: In Florida, you can designate your beneficiaries in your will. You can designate a variety of different beneficiaries and the way which they’re going to receive under your will. It’s important to understand that a will enables you to designate your beneficiaries. If you don’t execute a will, the state of Florida will designate your beneficiaries for you.
What is a beneficiary? Simply put, a beneficiary is an individual who receives benefits from something, particularly a last will and testament, trust, retirement account, or insurance policy. In the context of a last will and testament, your beneficiaries are the people to whom you bequeath your property, money, or other assets. Your will identifies these people, as well as the specific assets they will receive after you pass away.
Naming Alternate Beneficiaries
What happens in the unlikely—but still possible—event that your beneficiary passes away before you do?
The best way to plan for this scenario is to name alternate beneficiaries in your will for your first-level beneficiaries. For example, you could write something to the effect of “I leave my entire estate to my wife, (your wife’s name). If she does not survive me, I leave my entire estate to my son, (son’s name).” An estate attorney will help you with the proper language to ensure your estate is bequeathed to an alternate beneficiary. Planning for this helps ensure your assets go to the people you choose.
You can also create a third level of beneficiaries. For example, you could write: “If (son’s name) does not survive me, I leave my estate to his son, (grandchild’s name).
What Happens if I Don’t Designate an Alternate Beneficiary?
If you don’t name an alternate beneficiary in your will, and your original beneficiary passes away before your do, the gift is considered “failed” or “lapsed.”
Some individuals specify in their will that if a gift lapses, it should be returned to the residual beneficiary. A residual beneficiary is a person who inherits everything not specifically left to another person.
Like most states, Florida has anti-lapse laws. This means that if no alternative beneficiary is named, your gift does not pass onto your residual estate. These statutes are in place to prevent against assets being automatically passed on to a residual beneficiary when another dies. In the past, such situations have led to a great deal of conflict.
What happens instead? If a beneficiary dies, the estate will vest in the predeceased beneficiary’s descendants. This means that the asset in question in will likely be passed down to the heirs of your deceased beneficiary. This manner of distribution is referred to as “per stirpes.”
Anti-lapse statutes only apply in specific situations, such as if the beneficiary was a close blood relative—like a sibling, parent, aunt, uncle, etc.—and had children of his or her own. If your will doesn’t say who should receive the property of a deceased beneficiary, and the anti-lapse statute doesn’t apply because the deceased beneficiary was not related to you by blood, the state of Florida will designate your beneficiaries for you.
Specifically, Florida Statute § 732.603(1) provides as follows: “Unless a contrary intent appears in the will, if a devisee who is a grandparent, or a descendant of a grandparent, of the testator: (a) is dead at the time of the execution of the will; (b) fails to survive the testator; or (c) is required by the will or by operation of law to be treated as having predeceased the testator, a substitute gift is created in the devisee’s surviving descendants who take in equal shares the property to which the devisee would have been entitled had the devisee survived the testator.”
Hopefully, this helps you understand the value of careful estate planning. Consulting with an experienced estate attorney is one of the best ways to ensure your money, property, and other assets end up in the hands of the people you care about.
Barry E. Haimo, Esq.
Strategic Planning With Purpose
YOU ARE NOT OUR CLIENT UNLESS WE EXECUTE A WRITTEN AGREEMENT TO THAT EFFECT. MOREOVER, THE INFORMATION CONTAINED HEREIN IS INTENDED FOR INFORMATIONAL PURPOSES ONLY. EACH SITUATION IS HIGHLY FACT SPECIFIC AND EXCEPTIONS OFTEN EXIST TO GENERAL RULES. DO NOT RELY ON THIS INFORMATION, AS A CONSULTATION TO UNDERSTAND THE FACTS AND THE CLIENT’S NEEDS AND GOALS IS NECESSARY. ULTIMATELY WE MUST BE RETAINED TO PROVIDE LEGAL ADVICE AND REPRESENTATION. THIS INFORMATION IS PROVIDED AS A COURTESY AND, ACCORDINGLY, DOES NOT CONSTITUTE LEGAL ADVICE.