How Not To Designate A Revocable Trust As An Insurance Policy
Beneficiary   In a recent Florida case that likely has relevance
to other states, a decedent established a revocable trust for
the benefit of his heirs. The trust had typical language that
directed that the after the death of the settlor, the trust
should be used to pay death obligations of the decedent and his
estate. After such payment, the remaining trust proceeds would
be used to fund residuary trusts for the decedent’s children.
The decedent named the revocable trust as beneficiary of two
life insurance policies on his life. Due to financial reversals
during his lifetime, at the time of his death the insurance
proceeds were needed by his estate to pay the decedent’s death
obligations, and thus would not pass to the trusts for the
children.  The decedent’s personal representative and the
trustee of his revocable trust (who was the same individual)
asserted that Fla.Stats. §222.13(1) exempted the insurance
proceeds from the claims of the decede