Probate as relates to IRAs and Life Insurance

Generally speaking, the probate process in Florida begins with filing a petition for administration in the circuit court, in the county where the decedent resided at the time of their death.  From there, the next step is for the court to appoint a personal representative to administer the decedent’s estate, by issuing a court order which appoints the personal representative and issuing Letters of Administration giving the authority to the personal representative to do the administration. Simply stated, the personal representative’s job is to collect all of the decedent’s assets, prepare a list (inventory) of those assets, pay the decedent’s debts and expenses of administration, and then distribute the remaining assets to the estate’s beneficiaries. 

However, with respect to IRAs and life insurance: 

If a decedent, prior to their death of course, named a beneficiary (or beneficiaries) on their IRA or their life insurance policy, then these assets will not be included in the personal representative’s list (inventory) as being part of the probate estate. The named beneficiary (or beneficiaries) have already been designated by the decedent to receive these assets.  While the personal representative may be called on to facilitate or assist in the transfer of these assets to the beneficiary, such as providing to the IRA or life insurance company with death certificates, these assets are those for the beneficiary to collect and will not go through the probate process.

However, if one does not have a named beneficiary on their IRA or life insurance policy, then these assets do become part of the probate estate and will need to be included on the personal representative’s list (inventory), and the personal representative will distribute them either according to the decedent’s will or pursuant to the applicable intestacy statutes in Florida (i.e., Fla. Stat. 732.101 et seq.).  It is therefore very important to review your IRA and life insurance policies to assure that they have included a beneficiary (or beneficiaries), to transfer these assets more efficiently and to otherwise avoid these assets being subject to probate.  Importantly, if your named beneficiary dies, then it is important to update these designations as well.

It is not uncommon for litigation to occur with respect to beneficiary designations either, whether with regard to the timing of the designations occurring, or even with respect to comprehending the changing of designations or being influenced or coerced to change designations.

Any issues with respect to beneficiary designations on IRAs and or life insurance policies are important topics to discuss with your trusted probate lawyer.