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

Florida life insurance beneficiary rules are set by a combination of the state probate code, Florida Statute 222.13, federal law for employer plans, and the policy contract itself. The beneficiary you name on the policy controls who collects the death benefit, and that designation overrides anything your will says. Florida automatically cancels an ex-spouse’s designation after a divorce, blocks anyone who intentionally killed you from collecting, and shields the proceeds from most creditors when a beneficiary is named. The rules are straightforward once you see them laid out, but a few predictable mistakes send money to the wrong person every day.

The Designation Controls, Not Your Will

A life insurance beneficiary designation is part of the insurance contract between you and the carrier. When the insured dies, the insurer pays whoever is named on the policy. If your will leaves “all my life insurance” to your children but your policy still lists your brother, the brother collects. Florida Statute 222.13 reinforces this by directing proceeds to the person “for whose use and benefit such insurance is designated in the policy.”¹

You can name an individual, several individuals, a trust, a charity, or your estate. Naming your estate is almost always a mistake, for reasons covered below.

Primary, Contingent, and Per Stirpes

Most policies let you name beneficiaries at two levels. A primary beneficiary is first in line. A contingent beneficiary collects only if every primary beneficiary has died before you. Leaving the contingent slot blank is one of the most common oversights in Florida estate planning, and it is the single easiest way to accidentally send proceeds into probate.

A per stirpes designation changes how a deceased beneficiary’s share flows. If you name three children per stirpes and one dies before you leaving kids of her own, her third goes to her children. Without per stirpes, most policies redistribute her share among the surviving two children, and her kids get nothing. Parents with adult children and grandchildren should think about this choice specifically.

What Divorce Does to Your Designation

Under Florida Statute 732.703, a judicial dissolution of marriage automatically voids any pre-divorce designation naming your former spouse. The proceeds pass as if the ex-spouse had died before you.² The same rule applies to retirement accounts, annuities, and other pay-on-death assets.

Three exceptions keep the ex-spouse as beneficiary even after the divorce:

You sign a new document after the divorce that expressly names your former spouse.
The divorce decree requires you to maintain the policy for your former spouse or your children, and no other assets satisfy that obligation at your death.
The divorce decree makes the designation irrevocable.

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

Marriage, by contrast, does nothing on its own. Florida is not a community property state, and there is no spousal consent requirement for naming a beneficiary. A new spouse becomes a beneficiary only when you file the paperwork saying so. The common failure mode is a death benefit going to an ex-girlfriend, a sibling, or a parent the policyholder named decades earlier and forgot about.

Employer Policies and the ERISA Trap

If your life insurance comes through a private employer’s benefit plan, the federal Employee Retirement Income Security Act of 1974 governs it, and ERISA preempts Florida’s automatic divorce revocation.³ The U.S. Supreme Court resolved this in Egelhoff v. Egelhoff (2001), holding that plan administrators must pay whoever the plan documents name rather than apply state-specific revocation rules.⁴

The practical result is harsh. If you divorce and never update the beneficiary on your group policy at work, your ex-spouse collects the entire death benefit even though Florida Statute 732.703 would have voided the designation on an individually owned policy. Your family’s only recourse is a post-distribution lawsuit against the ex-spouse, which is expensive and uncertain. Update the designation on every employer-provided policy immediately after a divorce.

How to Change a Beneficiary

Follow the procedure in your policy. Insurers typically require a written change-of-beneficiary form; some accept online submissions, others require a notary or witness. A verbal statement, a handwritten note, or a new will does not override the designation on file.

Florida courts generally treat a change as effective once the policyholder has done everything in their power to make it happen and only a ministerial act by the insurer remains. But getting to that point requires actually following the carrier’s process. If you mail the form but die before the insurer processes it, the old and new beneficiaries can end up in a dispute, and the insurer often responds by filing an interpleader action. The carrier deposits the proceeds with the court, names all claimants as parties, and walks away. The claimants then pay lawyers and wait. Confirm receipt of any beneficiary change in writing.

What Happens If No Beneficiary Is Named

If every named beneficiary has died before you, or you never named one, the proceeds become payable to your estate. Under Section 222.13, they then pass through probate and are distributed under your will or, if you have none, under Florida’s intestacy statutes.¹

This outcome costs your family two of life insurance’s main benefits. Probate takes months instead of weeks, and once the proceeds enter the probate estate they lose their creditor protection. Naming a contingent beneficiary prevents both problems.

Naming a Minor Child

Insurance companies will not pay a death benefit directly to a minor. If you name your young child and nothing else, the insurer holds the money until a court appoints a guardian of the property. In Florida, a property guardianship is generally required when a minor stands to receive more than $15,000, and it means court filings, legal fees, and continuing judicial oversight that eats into the funds.

Two cleaner options exist. You can name a custodian under the Florida Uniform Transfers to Minors Act, usually written on the designation form as something like “Jane Doe as custodian for [child’s name] under the Florida UTMA.” The custodian manages the money without court involvement until the child reaches the age set by state law, typically 21. Or you can create a trust for the child and name the trust as beneficiary. A trust lets you stagger distributions, say at ages 25, 30, and 35, and gives you control a UTMA account cannot match. For a child with special needs, a properly drafted trust is essential to protect benefit eligibility.

When a Designation Can Be Contested

Challenging a Florida beneficiary designation is difficult. The person contesting carries the burden of proof and must show that the designation does not reflect what the policyholder genuinely intended. 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.
Lack of capacity, where the policyholder was mentally incompetent when they made the designation.

Judges weigh the totality of circumstances, including mental state, the relationship between the policyholder and the beneficiary, and whether the designation was a sudden, unexplained break from prior planning. Family disappointment is not a ground for challenge.

Florida’s Slayer Statute

Florida Statute 732.802 bars anyone who “unlawfully and intentionally” kills the policyholder from collecting. The proceeds pass as if the killer had died before the insured, flowing to the contingent beneficiary or into the estate. A murder conviction is conclusive, but a conviction is not required. A civil court can make its own finding using the greater weight of the evidence standard, which is lower than the criminal beyond a reasonable doubt standard.⁵

Creditor Protection for the Proceeds

Florida Statute 222.13 exempts life insurance proceeds paid to a named beneficiary from the claims of the policyholder’s creditors. Even if you die with significant debts, those creditors generally cannot reach the payout.¹

The protection vanishes if the policy is payable to your estate. Once proceeds enter the probate estate, they become reachable by creditors like any other estate asset.¹ This is a separate reason to always maintain a named beneficiary.

Trusts as Beneficiaries

Naming a trust as beneficiary gives you control a direct designation cannot. You can set distribution ages, protect a beneficiary with creditor problems, provide for minor children over time, and in some cases reduce estate taxes.

A revocable living trust keeps full control in your hands during your lifetime; proceeds flow in at your death and are distributed under the trust’s terms, avoiding probate. The trade-off is that a revocable trust does not remove the policy from your taxable estate.

An irrevocable life insurance trust (ILIT) does. You transfer ownership of the policy to the trust, give up the right to change its terms, and the policy is no longer counted in your estate for federal estate tax purposes because you no longer hold “incidents of ownership” over it.⁶ If you transfer an existing policy and die within three years, the IRS pulls the proceeds back into your estate; a new policy purchased directly by the ILIT avoids the problem.

Tax Treatment

The death benefit itself is generally not subject to federal income tax when paid because of the insured’s death.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 tax applies to the payout.

Federal estate tax is a separate issue. Proceeds are included in the policyholder’s gross estate when the policyholder held incidents of ownership at death or when proceeds are payable to the estate.⁶ For 2026, the federal estate tax exemption is $15,000,000 per person following the One Big Beautiful Bill Act signed July 4, 2025, with a top marginal rate of 40% above that threshold.⁸ For most Florida families the exemption makes estate tax a non-issue, which is why the ILIT remains a tool for high-net-worth planning rather than ordinary planning.

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