Florida Estate Planning
Estate Planning encompasses two broad areas planning for the certainty of death and planning for the possibility of incapacity (mental and/or physical). Estate planning is a process that includes planning in advance for the disposition and transfer of assets at time of death. A good estate plan should fulfill the estate owner’s wishes as well as maintain or enhance the financial security of estate owners and their families.
Elements of Estate Planning
Planning in anticipation of death may include, but is not limited to:
- Wills – are documents that primarily communicate the desires of the decedent as to how he/she wants their assets to be distributed among the beneficiaries. A will is a document that is used to dispose of a decedent’s property, a person who dies with a valid will is said to be testate. A will can also be used to revoke prior wills and codicils as well as appoint a personal representative. A will must be in writing and it must be signed in the presence of at least two witnesses. When a person dies without a will, known as intestate, their assets will be distributed according to priority set out by Florida Law; the decedent’s desires would not be considered.
- Will preparation
- Trusts – are commonly used for transferring family assets, avoiding some aspects of probate and shielding trust assets from creditors. To establish a trust there must be a settlor (also referred to as the grantor or creator) who transfers assets to the trust, a trustee who manages the trust assets for the benefit of the beneficiaries, and the beneficiaries for whom the trust is administered. A revocable living trust is a trust created during your lifetime. A revocable living trust can help you manage your assets or protect you should you become ill, disabled or incapacitated. With a living trust you are able to revoke or amend it whenever you like. These trusts do not help you avoid taxes, but they can help you avoid or minimize probate.
- Trust planning
- Trust administration
- Minors – Personal guardian and property custodian
- Personal Representative (Administrator or Executor)
- Provide for family members with special needs
- Charitable causes
- Provide for smooth succession and continuation for business owners
- Beneficiaries for life insurance, annuities, IRAs, 401K, 403B etc.
- Care of pets
Incapacity planning in general allows specific individuals that you designate to assist with either financial decisions or healthcare decisions, in the event that you are unable to make those decisions for yourself.
Planning for incapacity may include, but is not limited to:
- Power of attorney – to provide authority for a person’s named designee to act for him or her regarding financial and legal matters
- Living will – specifies a person’s wishes with regard to all life sustaining measures.
- Designation of health care surrogate – a person designates a loved one to make vital healthcare decisions for them.
Florida Estate Planning & Inheritance Law FAQs
Inheritance and estate laws in Florida are complicated. When someone dies, their loved ones may have many questions about the laws, about the probate process, and about how to handle the estates of their loved ones. At the Judy-Ann Smith Law Firm, we have gathered some of the most frequently asked questions that we receive so that you can have a better idea of what you might expect.
How does inheritance work in Florida?
The way in which inheritance works in Florida will depend on the type of asset and whether the decedent died with a will or without a will. People who have valid wills in place will have their assets passed to the beneficiaries that they have named in their wills according to the wills’ terms. If a will exists, the person who has it must file it with the probate court within 10 days of the decedent’s death. The estate may then go through one of three processes, depending on the estate’s value.
If the decedent died without a will, the estate will be probated and the assets will be passed according to the state’s laws of intestate succession. Finally, some types of assets will not go through the probate process and will pass to the designated beneficiaries directly. These assets include the following:
- Living trusts
- Jointly owned homes or bank accounts
- Payable-on-death bank accounts
- Life insurance proceeds
- Retirement accounts
- Transfer-on-death accounts
Do spouses automatically inherit their partner's estate?
What spouses will inherit from their partners when there is no will depends on whether the decedents had descendants in addition to their spouses. It also will depend on whether the decedents had assets that pass outside of the probate estate.
If a decedent dies and does not have any children, his or her spouse will inherit the entire estate. If the decedent and the spouse shared children, the spouse will inherit everything. If the decedent and the spouse shared children but the spouse also had a child from a previous relationship, the spouse will inherit one-half of the estate and the children of the marriage will receive the other half.
Finally, if the decedent had children from a different relationship, the spouse will inherit half of the estate and the children of the decedent will inherit the other half.
Can heir property be sold?
When someone dies without a will, his or her property will pass by intestate succession to his or her heirs. When there are several heirs who inherit the land, it is known as heir property. Each of the heirs who have an ownership interest in the land will have the right to use the entire property. Problems can arise when one heir decides that he or she wants to sell his or her ownership interest in the land since the heirs will own it as tenants in common.
Each heir will have a right to sell his or her tenancy in common. If it is sold, the purchaser will then have the same rights to the property as the heir previously had. To avoid this problem, an heir can ask for the property to be partitioned. This means that the property will be divided among the heirs according to the percentage of ownership that each has.
Finally, if the property cannot be partitioned, it can be sold. The proceeds would then be divided between the heirs according to their individual percentages of ownership.
Can an ex-spouse go after your inheritance?
In general, an inheritance that is received by one spouse is not considered to be a part of the marital estate, which means an ex-spouse should not be able to go after an inheritance. If the inheritance was received prior to the marriage, it should be considered that spouse’s separate property.
However, if the spouse who received the inheritance commingled the funds with the marital funds, it may lose its exemption as separate property. In that case, it would be possible for an ex-spouse to go after an inheritance in divorce.
If the inheritance was received during the marriage, it will still be considered to be the separate property of the spouse who received it. Again, however, if commingling has occurred, it can lose its separate property exemption and may become part of the marital estate.
Someone who receives an inheritance before he or she gets married can preserve its separate nature by entering into a prenuptial agreement. A spouse who receives an inheritance during a marriage can keep it separate by depositing the proceeds into a separate bank account and not commingling the proceeds with the marital assets.
Is inherited money included in a divorce settlement?
Inherited money that is inherited by only one spouse will normally not be included in a Florida divorce settlement. As long as the spouse has preserved its separate nature, the inherited money will be considered to be his or her separate property. Separate property is not divided in divorces in Florida.
However, if the money has been commingled, it can lose its separate nature. For example, if the spouse who inherits the money deposits it into a joint bank account, it will be considered to be commingled and will be included in any divorce settlement.
A spouse who inherits money can preserve its separate nature through a prenuptial or antenuptial agreement with the other spouse. He or she can also preserve its separate nature by keeping the money in a separate account and not commingling them with any marital funds.
Can you change a will after someone dies?
A last will and testament is a legal document that is created by a testator while he or she is still alive. As long as it is valid and executed according to the laws of Florida, it will not be able to be changed after the testator dies. A testator may change his or her will while he or she is alive through a codicil.
The testator may also revoke a will by destroying it, writing a codicil, or by writing a new will. The testator must have the mental capacity to change or revoke a will, and the changes cannot be made because of fraud, duress, or coercion.
Interested parties may challenge the validity of a will after the testator dies. However, most challenges will not be successful. Courts view wills as representing the voice of the testator, and there is a presumption that wills are valid.
If an interested party is able to prove that the will is not valid or that a provision of the will is not valid, the court may disregard the invalid provision or may disregard the will in its entirety. If that occurs, the assets will be distributed under the state’s intestacy laws.
Who inherits when there is no will in Florida?
When someone dies in Florida without a will, his or her assets and property will be distributed to his or her heirs under the state’s laws of intestate succession. These laws state who will inherit when someone dies without a will.
In general, the spouses and children of people who die intestate will inherit their property and assets. If there aren’t any children or spouses, the assets and property may be passed to the parents, siblings, nephews, nieces, or grandparents. If none of these parties survive, the assets may be passed to relatives who are more distant. Finally, if the intestate person has no surviving family members, the property and assets will go to the state.
Do I have to pay an inheritance tax in Florida?
Florida does not have an estate tax or an inheritance tax. This means that people will not have to worry about paying these types of taxes when they inherit property and assets in the state. However, the federal government does have an estate tax. If a person who dies has a very substantial estate, it is possible that an estate tax return will have to be filed with the federal government.
In 2019, the estate tax and gift exemption is $11.4 million per spouse. A married couple can leave up to $22.8 million without estate taxes being assessed, and an unmarried person can leave $11.4 million. While most estates will not exceed the estate tax exemption, the final state and federal tax returns for the decedent will still need to be filed by April 15 of the year following his or her death.
Do all estates have to go through probate in Florida?
Not all estates will have to go through probate in Florida. Some types of assets are excluded from probate such as assets that are held jointly, assets that are held by living trusts, and other accounts such as those that are payable on death, retirement accounts, and life insurance policies.
Estates that are small may also avoid probate. For example, if a person dies without owning any real estate, his or her assets may pass to his or her heirs through a disposition without administration procedure. This process is available when the decedent had no real estate and had assets that are exempt from creditors or do not total more than the cost of his or her final expenses.
A summary administration process may be available in some cases. This is an expedited probate process that is available for people who died more than two years ago or when the total value of their estates do not exceed $75,000.
Do I need a lawyer to probate a will in Florida?
An attorney is required in Florida to probate an estate, whether summary, formal and ancillary but an attorney is not required for disposition of personal property without administration. The probate laws are complex, and there are many duties that are involved.
An executor must fulfill all of the legal duties correctly, or he or she may be personally liable to the beneficiaries. An attorney can help you to make certain that the will is probated correctly and to ensure that you avoid making potentially costly mistakes.