The Short Answer

In Florida, life insurance proceeds are generally protected from the insured’s creditors only when the policy designates a beneficiary other than the insured or the insured’s estate. If there is no effective beneficiary designation and the proceeds are payable to the estate (or to the personal representative), the proceeds typically become a probate estate asset and can be exposed to creditor claims and estate expenses.

What Florida Law Says

Florida draws a sharp line between (1) life insurance payable to a named beneficiary and (2) life insurance payable to the insured, the insured’s estate, or the personal representative. When payable to a designated beneficiary, the proceeds are generally exempt from the insured’s creditors. But when payable to the estate (including situations where there is no valid beneficiary designation and the policy defaults to the estate), the proceeds are treated like other probate assets and administered in the estate—meaning creditors may have access.

The Statute

The primary law governing this issue is Fla. Stat. § 222.13.

This statute establishes that life insurance proceeds inure exclusively to the person designated in the policy and are exempt from the insured’s creditors, but if the proceeds are payable to the insured or the insured’s estate (including executors/administrators), they become part of the estate “for all purposes” and are administered under Florida probate law like other estate assets.

Why You Should Speak with an Attorney

While the statute provides the general rule, applying it to your specific situation is rarely simple. Legal outcomes often depend on:

• Strict Deadlines: If proceeds are directed to a trustee arrangement, Florida law can impose timing consequences—e.g., if no trustee makes a proper claim within 6 months, payment may be made to the personal representative, which can change creditor exposure. See Fla. Stat. § 733.808(3).
• Burden of Proof: Disputes often turn on whether there was an effective beneficiary designation, a valid change of beneficiary, or a valid assignment—issues that can require documentation from the insurer and careful legal analysis under the policy terms and Florida law.
• Exceptions: Even when proceeds can be routed to a trust, creditor exposure may depend on the trust terms (including spendthrift protections) and the type of creditor claim. Florida law allows certain creditor remedies against a beneficiary’s interest in some circumstances. See Fla. Stat. § 736.0501.

Trying to handle this alone can lead to missteps that unintentionally pull the proceeds into the probate estate, trigger avoidable disputes with creditors or family members, or create delays that reduce what ultimately reaches the intended recipients.

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Disclaimer: This article provides general information under Florida law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.