Let’s cut straight to it. You could spend thousands of dollars on the most beautifully crafted estate plan in Palm Beach County. We’re talking elegant trusts, perfectly worded wills, health care surrogates, advance directives — the whole portfolio. But if you’ve got the wrong beneficiary on your IRA? Game over.
That one, dusty form you filled out twenty years ago — the one buried in a manila folder at the bottom of a filing cabinet — could wreck everything.
Beneficiary Designations Trump Your Will. Full Stop.
Most Floridians don’t realize that a beneficiary designation overrides your will. Yes, you read that right. A 401(k), life insurance policy, annuity, or pension with a named beneficiary goes straight to that person, regardless of what your estate planning attorney drafted or how airtight your trust is.
Your will might say your current spouse gets everything. But if your ex-wife from 2002 is still named on your life insurance? She’s cashing that check. And Florida courts won’t save you.
Real Florida Case: Ex-Wife Wins Life Insurance Battle
In a 2017 case out of Miami, a man forgot to remove his former spouse from a $250,000 life insurance policy. After his unexpected death, his adult children — listed in his will as primary heirs — took the matter to court. The judge ruled in favor of the ex-wife. The policy had a valid, signed beneficiary designation, and that superseded the will. Game, set, match.
This isn’t rare. It’s Florida law. And it’s unforgiving.
Why Are Beneficiary Designations So Powerful?
Because they act as non-probate transfers. In other words, they bypass the entire court process. That’s normally a good thing.
Probate in Florida — especially in Palm Beach and Martin Counties — can be expensive, drawn-out, and public. You want to keep as many assets out of it as possible. A beneficiary designation accomplishes that.
But here’s the rub: the asset goes to whoever’s named. No court oversight. No judge to say, “Hey, that doesn’t seem fair.”
If it says your old college roommate gets your $500,000 IRA, then that’s what happens. Period.
When Good Plans Go Bad: The Hidden Risks of Bad Beneficiary Designations
Let’s break down the top mistakes we see here at Welch Law in Jupiter:
❌ Outdated Beneficiaries
Life changes. People divorce. They die. They disappear. If you haven’t reviewed your designations in the last 5 years, you’re playing Russian roulette with your legacy
❌ Naming Minors Without a Trust
Leaving life insurance to your 10-year-old? Florida courts will require a guardian of the property — meaning a judge picks someone to manage the money until the child turns 18. You don’t want a teenager inheriting a $300,000 windfall. That’s how Ferraris end up in ditches.
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Better Plan: Name a trust for the child’s benefit, with instructions and age-based distribution. You control the timeline.
❌ No Coordination with Your Revocable Trust
Many people create a revocable trust (smart!) but forget to name the trust as the backup (contingent) beneficiary on accounts. That means the asset might pass directly to a person instead of flowing through your carefully designed trust structure. Chaos ensues.
❌ Surprises in Retirement Accounts
Florida retirees, pay close attention. IRAs, 403(b)s, and 401(k)s have unique tax rules when it comes to beneficiaries. Naming a trust? You better structure it as a “see-through trust” or you could trigger immediate taxation.
And don’t forget the SECURE Act. Now, non-spouse beneficiaries often have to drain inherited IRAs within 10 years. That could jack up their income taxes overnight.
Spouses, Beware: Florida’s Retirement Rules Have Teeth
Under federal ERISA law (which governs many employer retirement plans), a spouse is entitled to be the primary beneficiary of a 401(k) unless they formally waive that right in writing. So if you were planning to leave your retirement plan to a child or sibling, it may not work unless your spouse signs off.
And in Florida, pension plans often default to spousal beneficiaries unless specifically changed. Coordination with your estate plan isn’t optional — it’s essential.
Let’s Talk About Custodians and Court Control
If you name a minor child directly as a beneficiary, Florida law doesn’t just hand the money over. A custodian must be appointed by the court — not you — and that custodian may have limited powers and no personal connection to your child.
Even worse? The money becomes fully theirs at age 18. No strings attached. No guidance. No brakes.
That’s why at Welch Law, we use testamentary trusts or UTMAs inside living trusts to hold these gifts safely until the child reaches a more mature age — say 30 or 35 — or even longer if needed.
Trigger Events That Require a Review (Don’t Wait)
If any of these apply to you, it’s time to pull out those forms:
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Marriage or divorce
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Birth or adoption of a child or grandchild
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Death of a named beneficiary
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Estrangement or family fallout
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Creation of a new trust
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Changes to your estate plan
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A major increase in net worth or retirement savings
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Moving to Florida from another state
Florida’s laws are different. What worked in New York or New Jersey may unravel here.
Bottom Line: If You Die Today, Who Gets What?
Your beneficiary forms will answer that question more definitively than your will or trust. That’s the hard truth.
So ask yourself:
✅ Are my beneficiary designations aligned with my current estate plan?
✅ Do I have backups (contingent beneficiaries) listed?
✅ Have I considered tax efficiency, age, and trust coordination?
If the answer is “I don’t know” or “I think so,” that’s your cue to call Welch Law, PLLC. We’ll do a full beneficiary audit and make sure your legacy is locked down tighter than a Florida beachfront bunker during hurricane season.
⚖️ Want to Avoid a Beneficiary Disaster?
📞 Call Welch Law, PLLC in Jupiter at (561) 413-9536
🌐 Visit www.welch.law to schedule your confidential estate planning review.
By: Edward J. Welch, Esq. ||| Estate Planning | Wills | Trusts | Asset Protection | Welch Crypto Trust™
If you would like to discuss your legacy options with an estate planning attorney in Jupiter or Palm Beach Gardens, Florida, schedule a complimentary call with Edward J. Welch at Welch Law, PLLC. At Welch Law, WE WANT TO DRAFT YOUR LEGACY!
Reference: Smart Business (Sep. 4, 2025) “The importance of reviewing beneficiary designations”
