Can I Name an Alternate Beneficiary in My Will?
By: Barry E. Haimo, Esq.
October 4, 2021
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? A beneficiary is an individual who receives benefits from something, particularly a last will and testament, trust, retirement account, or insurance policy. In 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. An alternate beneficiary ensures your assets end up with someone you designated.
Naming an Alternate Beneficiary
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. If she does not survive me, I leave my entire estate to my son.”
An experienced 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?
Say you don’t name an alternate beneficiary in your will. And your original beneficiary passes away before your do. In this case, 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.
Beneficiary Laws in Florida
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.
Careful Estate Planning is Key
Hopefully, this helps you understand the value of careful estate planning. Designating an alternate beneficiary (or more) is just one way to protect your assets. 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.
Originally published 05/18/2015. Updated 10/04/2021
Barry E. Haimo, Esq.
Strategic Planning With Purpose®
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