OUT OF STATE WILLS
A Will prepared in another state is probably legally valid in Florida, however, it could contain provisions that are invalid or inappropriate in Florida. Also it may not contain provisions that should be in your Will because you are a Florida resident.
Your estate could be subjected to delay, additional costs, and taxes because of an out of state Will. For these and other reasons, we recommend having your Will rewritten if you have become a Florida resident.
FLORIDA WILLS
A Will controls the disposition of assets owned solely in the name of a descendent. It does not control assets owned jointly with rights of survivorship or in trust for a named beneficiary as these assets go automatically to the surviving joint owner or beneficiary.
A couple owning their assets in joint names should have and maintain Wills that contain a common plan for disposing of their joint assets after they are both deceased, otherwise either his or her family may get all of the joint assets, depending on who dies first.
LIMITATIONS ON WILLS
Effective October 1, 2001, a married person has the right to receive thirty percent of their deceased spouse's assets including jointly owned, trust, and pay on death and probate assets. This is known as the "elective share".
Other provisions of Florida law that could affect your will deal with homestead property, exempt property, and simultaneous death. An attorney familiar with these matters should prepare your Will.
SEPARATE MEMORANDUM
Florida law allows you to dispose of tangible personal property by a separate memorandum outside of your Will. Use of this procedure keeps your Will simple and allows you to change your mind without changing your Will. The memorandum should be dated and signed by you and identify the property and the intended beneficiary clearly.
PERSONAL REPRESENTATIVE
Florida law allows non-residents to serve as Personal Representative (executor) of your estate if they are related to you as set forth in the statute.
Your Will should appoint a primary and an alternate Personal Representative. The best Personal Representatives are people with common sense who will be fair and considerate of others interested in the estate. In a nutshell, the Personal Representative's duties are to collect assets, pay obligations, and make distribution according to the Will.
JOINT OWNERSHIP
Joint ownership does not eliminate the need for a Will because you cannot be certain the joint owner will survive you.
Joint ownership for the purpose of transferring property at your death can be used, but do consider the following: (a) you may lose individual control. (b) You expose your assets to the liabilities of and misappropriation by the joint owner. (c) Partial loss of homestead exemption. (d) Your estate beneficiaries may lose important federal income tax benefits. (e) Joint ownership can be contested by other estate beneficiaries after your death.
An attorney can suggest ways to minimize some of these risks or alternatives, so seek advice if needed.
ESTATE TAXES
Residents of Florida do not have to worry about federal or Florida estate taxes unless the value of their gross estate exceeds the exempt amount. The exempt amount for 2002 is $1,000,000.00 and graduates to $3,500,000.00 by year 2009. In year 2010 the tax is repealed altogether but it is likely there will be changes to this law before December 31, 2010. The gross estate can include property given away during life, insurance, annuities, pensions, and other things a lay person could over-look so expert advice should be obtained if you are not sure.
WILLS WITH TRUSTS
If you have a minor child or grandchild or if you have a dependent parent or disabled child who might survive you, then you should consider providing for a trustee in your Will to manage any bequest you leave to such persons. The trustee can provide support for such person as you instruct in the Will.
We invite you to ask about prices on any of our services.
A Living Trust is created by signing a trust agreement which appoints a trustee (usually yourself) and directs the trustee what to do with assets that are transferred to the trust. A Successor Trustee is named, who takes over in the event of your incapacity or death. Assets that you want controlled by the trust must be transferred to the trust. A large estate is not necessary for a trust. A modest size estate can also enjoy the benefits of a trust.
AVOIDING GUARDIANSHIP
A Living Trust can avoid public guardianship proceedings. If a person who has most of their assets in a trust becomes incapacitated, the successor trustee named in the trust takes over and manages the assets for the benefit of the person who set up the trust. No court approval is needed for the successor trustee to act.
AVOIDING PROBATE
Trust assets are not part of the probate estate but are administered separately as a trust estate. The duties of a trustee administering a probate estate. Namely, collect assets, pay obligations such as taxes and creditors and then make distribution according to the trust. Administering a trust estate is usually less expensive than a probate estate however legal counsel should be employed to protect the trustee and beneficiaries.
AVOIDING TAXES
A Living Trust does not necessarily avoid any income or estate taxes. For estates valued over the current exemption amount, trusts are usually used to minimize or avoid estate taxes.
AVOIDING CREDITORS
This is a changing area of trust law. Generally speaking, it should not be assumed by the person setting up the trust that trust assets are beyond the reach of their creditors. Some trust beneficiaries can be protected against their creditors if special language is used. Specific advice should be sought if this is a concern.
POWER OF ATTORNEY
We recommend a durable power of attorney to your successor trustee be signed along with a trust agreement so that business matters outside the trust could be taken care of by the same person in the event of your incapacity. This could include such things as changing your address, medical claims, endorsing checks, tax returns, and arranging for medical care.
POUR-OVER WILL
A Pour-Over Will is usually made at the same time a trust agreement is. This is a simple Will which leaves (or pours over) everything a decendent might own in their own name at death, to their trust. The purpose is to take care of such items as automobiles, refunds, and personal effects which usually are not owned by the trust.
ESTATE PLANNING
If the gross value of all assets a person or married couple owns, including joint property, is near or exceeds the current exemption amount, then estate planning is required to minimize federal and state estate taxes. In these estates a Will or Living Trust should not be signed without tax planning advice.
