Contesting Beneficiary Designation in Florida
Can a beneficiary designation on a bank account or investment account be challenged as a traditional will or trust? The answer is “Yes.”
Contesting beneficiary designation (i.e., in which the owner of a financial or retirement account specifies the pay-on-death or transfer-on-death beneficiary) is subject to challenge, and ultimately invalidation, on the basis of undue influence and testamentary capacity.
Florida case law provides that beneficiary designations can be challenged and invalidated on the basis of undue influence. In Keul v. Hodges Blvd. Presbyterian Church, 180 So.3d 1074 (Fla. 1st DCA 2015), the court invalidated a pay-on-death (“POD”) designation of testator’s credit union account when the decedent’s former caregiver used her confidential relationship to obtain the designation. Keul stated that transfer-on-death (“TOD”) and PODs are will substitutes that “are subject to challenge on grounds such as undue influence, fraud, duress, and overreaching.” Id. at 1076.
Keul explained that:
A POD account, although not in the strictest sense a testamentary device and not subject to the formalities required of wills, functions as a will substitute and partakes of many of the same equitable considerations that apply to testamentary transfers. Florida law and policy against abuse of fiduciary relationships apply to contracts, inter vivos transfers, and testamentary transfers, and are properly applied to determine whether a POD designation has been obtained through undue influence.
Keul, at 1077.
Because beneficiary designations are part of the overall investment contract, the same requirements of testamentary capacity apply. State ex rel. Albritton v. Lee, 183 So. 782, 795 (Fla. 1938) (“elements of a contract” are “competent parties, lawful subject matter, valid consideration and agreement of minds”); Hogan v. Supreme Camp of American Woodmen, 1 So.2d 256, 258 (Fla. 1941) (“[a] valid contract requires both capacity of the parties and consideration”).
Daniel A. Seigel has successfully prosecuted numerous cases challenging the validity of beneficiary designations, resulting in substantial financial recoveries for clients.
Some highlights include:
Representing Plaintiffs (siblings) in lawsuit against sister to invalidate POD designations on various investment and bank accounts, resulting in substantial settlement.
Representing Plaintiffs (children of decedent) in lawsuit against decedent’s caretaker in case involving online change of beneficiary designations.