Florida Life Insurance Beneficiary Rules: Divorce, Minors, and Trusts

Florida life insurance beneficiary rules start with a simple principle: whoever you name on the policy gets the money, and that designation overrides anything your will says. State law layers a few important rules on top. Divorce automatically wipes out an ex-spouse’s designation. Anyone who unlawfully kills the policyholder is barred from collecting. Proceeds paid to a named beneficiary are generally shielded from your creditors. And if your policy comes through work, federal law can override the state rules entirely.

The Policy Controls, Not Your Will

A life insurance beneficiary designation is part of your contract with the insurer. When you name someone on the policy, that designation stands on its own and does not pass through your will. Florida Statute 222.13 directs that proceeds go to the person “for whose use and benefit such insurance is designated in the policy.”¹ If your will names one person and your policy names another, the policy wins.

You can name individuals, a trust, a charity, or your estate. Most policies allow two tiers. The primary beneficiary is first in line. A contingent beneficiary collects only if every primary beneficiary has already died. Skipping the contingent designation is one of the most common oversights in estate planning, and it can push the proceeds into probate if your primary beneficiary predeceases you.

A “per stirpes” designation controls what happens if a named beneficiary dies before you do. With per stirpes, that person’s share flows down to their children. Without it, most policies redistribute the deceased beneficiary’s share among the surviving primary beneficiaries. Parents with multiple adult children and grandchildren often care about this distinction more than they realize when signing the form.

Divorce Automatically Revokes an Ex-Spouse’s Designation

Florida Statute 732.703 makes any pre-divorce designation naming your former spouse void the moment the marriage is judicially dissolved. Proceeds pass as though your ex-spouse had died before you.² The rule covers life insurance, retirement accounts, annuities, and other pay-on-death assets.

The automatic revocation does not apply in three situations:

You sign a new governing instrument after the divorce that expressly names your former spouse as beneficiary.
Your divorce decree requires you to maintain the policy for your ex-spouse or your children, and no other assets satisfy that obligation at your death.
The divorce decree prevents you from unilaterally changing or terminating the designation.

These carveouts exist because divorce settlements often use life insurance to secure alimony or child support.²

Marriage does the opposite of nothing, in the sense that it changes nothing automatically. Getting married does not make your new spouse a beneficiary of an existing policy. Florida is not a community property state and does not require spousal consent for a beneficiary designation. If you want your new spouse covered, update the form yourself. Death benefits routinely end up with an ex-partner, a parent, or a sibling because the policyholder never got around to it.

Employer-Sponsored Policies Follow Federal Law

The automatic divorce revocation has a large hole in it. If your life insurance comes through a private employer’s benefit plan, the federal Employee Retirement Income Security Act of 1974 (ERISA) governs the policy and preempts state law, including Florida Statute 732.703.³

The U.S. Supreme Court confirmed this in Egelhoff v. Egelhoff (2001), holding that ERISA preempts state automatic-revocation statutes because plan administrators must pay according to the plan documents rather than track the divorce laws of 50 states.⁴

The practical result: if you divorce and forget to update the beneficiary on your employer-provided life insurance, your ex-spouse may collect the full death benefit no matter what Florida law says. The administrator is legally required to pay whoever the plan names. Your family’s only potential recourse is a post-distribution lawsuit against your ex-spouse, which is expensive and uncertain. Update your employer plan beneficiary immediately after any divorce.

How to Change a Beneficiary

Changing a beneficiary means following the procedure spelled out in your policy. Usually that involves a written change-of-beneficiary form submitted to the insurer. Some companies require a witnessed or notarized signature. Others accept the change through an online portal.

Florida courts apply a strict compliance standard. A change generally takes effect only when the insurer has received it and every required step has been completed. Courts have recognized that a change is effectively complete once the policyholder has done everything within their power and only a ministerial act by the insurer remains. But verbal statements, handwritten notes, and even a new will naming a different beneficiary will not override the existing policy designation if the insurer’s process was never followed.

Timing creates its own risk. If you mail a change form and die before the insurer processes it, the old and new beneficiaries may end up in a dispute. Insurers in that position often file an interpleader action: they deposit the proceeds with the court, name every claimant as a party, and step out of the dispute. A judge then decides who receives the money. The insurer is discharged; the claimants absorb the attorney fees, court costs, and delay. Submitting changes promptly and confirming receipt with your insurer prevents this.

What Happens If No Beneficiary Is Named

If every named beneficiary has predeceased you, or you never named one, the death benefit does not disappear. It becomes payable to your estate. Under Florida Statute 222.13, proceeds payable to the insured’s estate become part of the probate estate and are distributed by the personal representative under probate law.¹ With a valid will, proceeds pass under its terms. Without one, Florida intestacy rules decide who inherits.

This outcome undoes two of the biggest advantages of life insurance. Probate delays can stretch for months while a direct payout to a named beneficiary often takes weeks. Once proceeds enter the estate, they also lose the creditor protection Florida law otherwise provides. Naming a contingent beneficiary avoids both problems.

Naming a Minor Child

Insurance companies will not pay a death benefit directly to a minor. If you name your 10-year-old and do nothing else, the insurer holds the money until a court-appointed guardian of the child’s property is in place. In Florida, a property guardianship is generally required when a minor is set to receive more than $15,000. The process involves court filings, legal fees, and ongoing judicial oversight of every expenditure.

Two better options exist. You can name a custodian under the Florida Uniform Transfers to Minors Act (UTMA), which lets an adult manage the funds without court involvement until the child reaches the age set by state law, typically 21. Many insurers let you set this up directly on the beneficiary form with language like “Jane Doe as custodian for [child’s name] under the Florida UTMA.”

The more flexible approach is a trust. Naming a trust as beneficiary lets you control when and how the funds are distributed, including staggered payouts at ages 25, 30, and 35 rather than a lump sum at 21. Trusts also work well when a child has creditor problems or special needs.

Contesting a Designation

Challenging a beneficiary designation is hard. The person contesting it carries the burden of proof and has to show the designation does not reflect what the policyholder genuinely intended. Florida courts recognize a narrow set of grounds:

Undue influence, where someone pressured or manipulated the policyholder into naming them.
Fraud, where the policyholder was deceived about what they were signing or about the beneficiary.
Lack of capacity, where the policyholder was mentally incompetent at the time of the designation.

Courts look at the full picture: the policyholder’s mental state, the relationships involved, and whether the designation broke sharply from prior planning. Simply disliking the choice is not enough.

Florida’s Slayer Statute

Florida Statute 732.802 bars anyone who “unlawfully and intentionally” kills the policyholder from collecting. The proceeds pass as though the killer had predeceased the policyholder, going to the contingent beneficiary or, if none exists, to the estate.⁵

A murder conviction is conclusive. But a conviction is not required. If no criminal case produces one, the civil court can independently determine whether the killing was unlawful and intentional using a “greater weight of the evidence” standard, which is a lower bar than the criminal “beyond a reasonable doubt” standard.⁵

Creditor Protection for Named Beneficiaries

Florida gives life insurance proceeds strong statutory protection. Under Section 222.13, proceeds paid to a named beneficiary are exempt from the claims of the policyholder’s creditors. Even if you die with heavy debts, creditors generally cannot reach the payout going to your designated beneficiary.¹

The protection has a critical limit. If the policy is payable to your estate rather than to a named beneficiary, the proceeds become part of the probate estate “for all purposes,” and creditors can make claims against those funds like any other estate asset.¹ Keeping a living, named beneficiary on the policy is the way to preserve the shield.

Trusts as Beneficiaries

Naming a trust gives you more control than any direct individual designation can. A trust lets you set conditions on distributions, protect a beneficiary with creditor problems, provide for minor children over time, and in some cases reduce estate taxes.

A revocable living trust keeps you in full control during your lifetime. You can change the terms, swap beneficiaries, or dissolve it. At your death the proceeds flow into the trust and are distributed under its terms, bypassing probate. A revocable trust does not, however, remove the policy from your taxable estate.

An irrevocable life insurance trust (ILIT) goes further. You transfer ownership of the policy to the trust and give up the right to alter it. In exchange, the policy is no longer part of your estate for federal estate tax purposes. Federal law includes life insurance in your taxable estate only when you hold “incidents of ownership” at death.⁶ Transferring the policy to an ILIT ends those incidents. One catch: transferring an existing policy and dying within three years pulls the proceeds back into your estate. Policies purchased directly by the ILIT avoid the three-year problem.

Taxes on the Death Benefit

Life insurance proceeds are generally not subject to federal income tax. The IRS treats benefits received by a beneficiary due to the death of the insured as excludable from gross income.⁷ Interest earned on the proceeds after the policyholder’s death is taxable as ordinary income. Florida has no state income tax, so no state-level income tax applies either.

Federal estate tax is a separate question. Proceeds are included in the policyholder’s gross estate if the policyholder held incidents of ownership at death or if the payout goes to the estate.⁶ For 2026, the federal estate tax exemption is $15,000,000 per person under the One Big Beautiful Bill Act signed into law on July 4, 2025.⁸ Estates above that threshold face a top marginal rate of 40%. For most families, estate tax is not a concern, but a large policy can push a borderline estate over the line, which is the scenario where an ILIT earns its keep.

1
Justia Law. Florida Code 222.13 – Life Insurance Policies; Disposition of Proceeds
2
Florida Senate. Florida Code 732.703 – Effect of Divorce, Dissolution, or Invalidity of Marriage on Disposition of Certain Assets at Death
3
Office of the Law Revision Counsel. 29 USC 1144 – Other Laws
4
Legal Information Institute. Egelhoff v. Egelhoff
5
Florida Senate. Florida Code 732.802 – Killer Not Entitled to Receive Property or Other Benefits by Reason of Victim’s Death
6
Office of the Law Revision Counsel. 26 USC 2042 – Proceeds of Life Insurance
7
Internal Revenue Service. Life Insurance and Disability Insurance Proceeds
8
Internal Revenue Service. What’s New – Estate and Gift Tax