Estate Planning and Life Insurance Proceeds

The recent case of Morey v. Everbank, 93 So.3d 482 (Fla. 1st DCA 2012) highlights the importance of understanding proper estate planning when dealing with life insurance proceeds. In Morey the decedent purchased life insurance and named a revocable trust as the beneficiary. After the decedent’s death, the trustee sought to classify the life insurance proceeds as exempt from creditors’ claims under Florida Statute § 222.13(1). The Morey Court held that the mere fact that life insurance proceeds are payable to a trust does not deprive them of their exempt status, however, those proceeds then must be governed by the trust. In this case, the trust provided that those trust assets could be used to pay estate claims, and so they were at risk of creditors’ claims.