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Forbes has reported that nearly 2.5 million Americans die each year without a will. While many states have default rules that define who will receive your assets, sometimes they do not cover your specific circumstances. Richard Blum, a Holocaust survivor and New York real estate developer appears to be one such example.

If you die without a will or living trust (“intestate”), state law will determine how your assets which are subject to probate are distributed, and the result may not be what you would want.

In Florida this generally means your probate assets will go to your spouse, then your children, then to parents, then to siblings and so on. While this may be fine for the traditional family, we see more families with children from outside the current marriage or relationships where they may not be a relationship that is legally recognized by the state.

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Thumbnail image for Last Will and Testament 1.jpgProbate can have the reputation of being a nightmare, and many hate the idea of going through this process. If the idea of transferring your assets through probate daunts you, then you will be happy to know that living trusts can avoid probate. The probate process is usually more expensive and time consuming than having a living trust set up to transfer assets. Moreover, a living trust has many more advantages than skipping probate. An estate-planning attorney can discuss with you the specific advantages that a living trust will bring to your estate plan and can assist you with setting up one to effectively address your needs and the needs of your beneficiaries. Meanwhile, here are 6 general benefits of using a living trust in your estate plan.

BENEFIT #1: A living trust can protect the assets in the trust for certain beneficiaries.

Sometimes, the intended beneficiaries are not capable to handle their full inheritance. For example, many states do not allow minors to own property. And even if a child was old enough to receive property legally, a full inheritance can detriment the child by tempting him to quit school or start an early retirement. Moreover, there are those beneficiaries who will spend all their inheritance at their first opportunity. A living trust can prevent any of these scenarios by allowing you to appoint a trustee to keep your assets for the benefit of your beneficiaries. The trustee would invest the assets in your trust for your beneficiaries’ benefit until they are capable of handling their inheritance.

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Over the last year I worked with an intern in our office of a Law Review article for Texas Tech University. This article describes problems with current estate planning and takes the premise that most estate planners have become lazy because of advancements in technology. That is, most only ask their clients about issues that their software is capable of addressing. We identify 6 primary areas that are not addressed in most estate plans:

  1. Firearms;
  2. Digital Assets;
  3. Asset Protection;
  4. Life Planning;
  5. Controlling from the Grave; and
  6. Pets

The citation for the article is
David Goldman & Charles Jamison, The Future of Estate Planning: The Multigenerational Life Plan, 5 Est. Plan. & Community Prop. L. J. 1 (2012).
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Estate Planning.jpgA Durable Power of Attorney (DPA) allows you, the “principal”, to designate someone, the “agent”, to act on your behalf. Depending on the DPA, your agent will have authority to oversee your financial affairs or your medical treatment. Having a DPA is a good idea, but only if it is done properly. Otherwise, a DPA will probably not serve its intended purpose and it might create additional problems. To avoid this, contact an estate-planning attorney to assist you with this issue. Meanwhile, this blog discusses three important reasons to hire an estate-planning attorney to draft your DPA.

1. A DPA is effective right after it is executed.

Before October 2011, a DPA could remain “dormant” after it was executed. This type of DPA is known as “springing DPA” and is not effective until the occurrence of the event specified in the document, like the principal’s incapacity. However, pursuant to a revision to Florida Statutes section 709.2108, a DPA is ineffective if it provides that it is to become effective at a future date or upon the occurrence of a future event or contingency. Therefore, springing DPAs are no longer recognized by Florida and a DPA is effective the moment that is executed. So if you want a DPA to protect your financial affairs in the event that you become incapacitated, your agent will have authority to oversee your finances as soon as the DPA is created. This can be a problem. Even if your agent is a person that you completely trust, like your spouse, the fact that he or she has authority over your finances can be against your interests. An estate-planning attorney from the Law Office of David M. Goldman PLLC conveniently addresses this issue by offering an escrow service in which you chose the attorney as your agent and instruct him or her what to do in the event that the DPA is used. Meanwhile, the DPA will be kept in a secure place and will not be used unless you instruct the attorney to do so, a court mandates the attorney to do so, or two Affidavits from two different Doctors state that you are incapable of deciding for yourself. This way you can be better assured that your agent will not abuse his or her power over your affairs.

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A Florida Will is one of the most basic estate-planning documents. A Will allows the grantor to devise his or her property with very limited encumbrances; however, there are issues that are better addressed with other estate-planning documents – like a Trust. If you are debating whether to use a Trust or a Will, then this blog will help you. However, it is wise to seek assistance from an estate-planning attorney before making a decision.

What is a Will?

A Will is a written instrument, signed by the decedent and at least two witnesses in each other presence, that fulfills the requirements of Florida law. A Will names the beneficiaries for the testator’s probate assets. The testator can also designate guardians for minor children and a personal representative to administer the estate. If a Will was validly executed in another state, Florida courts will recognize the document as a Will except in the case of a holographic Will. Holographic Wills are Wills written entirely in the testator’s own handwriting and in most states witness signatures are not required. However, Florida law requires that holographic Wills be witnessed and signed in the same manner as any other Florida Will.

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asset-protection-cash.jpgEach state has different asset protection laws. Florida’s asset protection laws are considered one of the most liberal ones. Therefore, it is a good idea to discuss your case with an estate-planning attorney with expertise in asset protection to take advantage of the liberal asset protection laws of Florida. Florida’s asset protection laws apply to permanent residents and people in other states with property in Florida. Florida’s asset protection laws are based on several legal sources: the Florida Constitution, Florida Legislature, and common law. Courts also establish asset protection through their interpretation of provisions of the constitution, statutes, and common law.

Florida assets protection laws provide many options to protect your assets from creditors. People anticipating substantial civil judgments often move from other states to Florida to become a resident for asset protection purposes. For example, OJ Simpson took advantage of Florida’s asset protection by purchasing a large estate in Florida in part to avoid creditors.

4 Key Asset Protection Exemptions for Florida Residents

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FreeFloridaProbateHandbook-small-thumb.jpgThe grapevine is full of rumors about probate. Some of them are true, but many of them are more than misguided. The fact that each state has a different probate procedure makes the process harder to understand. If you want to get a general grasp about some basic rules of probate in Florida, then this blog is for you. However, you should discuss the facts of your case with an estate-planning attorney before deciding whether or not probate is a viable option for your estate plan or if you are faced with going through this process.

1. Estate Taxes vs. Probate Fees – Estate taxes are paid to the IRS if an estate exceeds a specific dollar limit, which varies each year. For example, in 2012 estate taxes were owed for estates that exceeded $5,120,000. Probate fees are paid to the attorney and executor (a.k.a personal representative) of an estate for any assets that go through probate. Additionally, there are filing fees needed to be paid to the probate court and appraisal fees for estate assets.

2. Compensation for Executor – An executor is entitled to a commission payable from the estate assets without court order as compensation for ordinary services. The commission will be based on the compensable value of the estate, which is the inventory value of the probate estate assets and the income earned by the estate during administration. A commission computed on the compensable value of the estate is presumed to be reasonable compensation for an executor in formal administration as follows:

  • a. At the rate of 3% for the first $1 million.
  • b. At the rate of 2.5% for all above $1 million and not exceeding $5 million.
  • c. At the rate of 2% for all above $5 million and not exceeding $10 million.
  • d. At the rate of 1.5% for all above $10 million.

3. Probate Bond – Probate bonds are used to ensure the accuracy and fairness of a probate proceeding. They are a type of security bond taken out by the executor of an estate entering probate and are used to ensure that the value of an estate will not be altered by the executor. A probate bond is typically used in estates that have no Will to direct the distributions of the assets, or when there is reason to believe that decedent was incompetent during the creation of his or her Will. All bonds required will be for the sum that the courts deems sufficient after consideration of the gross value of the estate, the relationship of the executor to the beneficiaries, exempt property and family allowances, the type and nature of the assets in the estate, known creditors, and liens and encumbrances on the assets.

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vacancy.pngEvery trust needs at least one trustee to administer the trust and to carry on its terms. If a person designated as a trustee ceases to act as one, then a vacancy in the trust occurs and it might need to be filled. Succession of trustees is perhaps one of the most common occurrences in the administration of a trust. A succession of trustee can be done by the terms of the trust, by the beneficiaries, or by appointment of the court. The overriding concept is that if one trustee ceases to act for any reason, the result depends upon the circumstances of each case. This is why it is wise to consult an estate-planning attorney to analyze all the factors affecting your case and assist you with this issue.

1. When does a vacancy occur?

A vacancy in a trusteeship occurs in the following circumstances:

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checklist.pngUpdating your estate plan is as important as having one. Many find it easy to procrastinate about updating their estate plan because they do not want to spend the money on a Florida estate-planning attorney. However, a lot of money can be lost through missed estate planning opportunities and family legal battles over out of date estate planning documents. Therefore, updating your estate plan can actually save money in the long run. Many Florida estate-planning lawyers, including the Law Office of David M. Goldman PLLC, will actually review your current estate plan free of charge. When updating your estate plan, consider the following points.

  • Consider whether you need a trust: A trust can be very helpful to achieve your goals, even if you do not have a lot of assets. In numerous situations, a trust or series of trusts in conjunction with other documents can be the best option for even those with modest means. Trusts are often used for the following reasons
    • Protect your assets from creditors
    • Provide for the car of your family and yourself financially in case you no longer are able to handle your own affairs.
    • Provide for children of a previous marriage in the case of your death.
    • Avoid probate, keep your assets private, and save money for your beneficiaries
    • Protect money for minors, so they cannot spend the money in the trust immediately on thing you may consider unnecessary.
    • Protect assets from a future ex son or daughter-in-law.
  • File an estate tax return if you lost your spouse: A surviving spouse has the option of adding any unused tax exclusion of the deceased spouse to her own $5 million exclusion. This option is known as “portability”. You may thin that you will never need this additional exclusion, but they laws could change and significantly reduce the amount of portability in the future. Portability is not automatic. To get portability, the executor of the estate of the decedent spouse must file an estate tax return, even if no estate tax is due.
  • Consider whether to give away some of your assets now to save taxes: If you have enough money for retirement, it might be in your best interest to transfer some of it now to save some taxes. If you have a lot of assets, it is a good idea to seek an estate planning attorney to discuss the option of using leveraging techniques that can allow you to give away a large part of your assets gift-tax free.
  • Update basic estate planning documents: If you have not revised your estate plan in more than five years, then you should have someone look at your current estate plan to make sure it still reflects your intent and is flexible enough to accommodate present uncertainties. Consult an estate planning attorney to discuss whether your current estate plan needs some arrangements.
  • Prepare for a time when you may not be able to think for yourself: Notwithstanding your present age or health it is important to prepare for the possibility of becoming physically or mentally incapacitated. To prepare for this possibility, you should select someone to be a durable power of attorney for health care as well as financial decisions.
  • Chose a guardian for your children that are minors or have special needs: Even if you are married it is important to select who will take care of your children if you pass away so that a court is not making this decision on behalf of your children. This can be done by appointing a guardian in your will.
  • Use beneficiary designations or style accounts to assure you or your spouse has enough money to cover immediate expenses in case one of you suddenly passes away. It is wise to maintain a joint account designated for these types of emergencies because when a spouse dies, the surviving spouse generally does not have immediate access to the decedent spouse’s private bank account. These issues can also be dealt with in various types of Trust documents.

An estate planning attorney can review your current estate plan to assure that your intent has not been frustrated with circumstances arising after the creation of your estate plan. New laws or unconsidered circumstances can easily frustrate at least part of your estate plan’s purpose. For an estate planning attorney in Florida, call the Law Office of David M. Goldman PLLC at (904) 685 – 1200 or click the “Contact Us” tab at the top of the page.

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document.pngThis process lets someone who paid for a decedent’s final expenses, from the funeral or from the last illness, to be reimbursed from the assets of the decedent’s estate. This process is only available if the decedent did not leave any real estate and the only assets in the estate are either exempt from creditor’s claims or do not exceed the total amount of the final expenses. Although this process avoids probate, it might be impractical in some cases. For example, this process can open the assets of decedent’s estate to the claims of creditors, can have less favorable tax benefits, and there is a risk of unintentionally disinheriting some children from one spouse but not of both spouses. Therefore, it is important to consult with a Florida probate lawyer to help you consider the variables in your case and make an informed decision.

To apply for this process and request reimbursement, you file a form called “Disposition of Personal Property Without Administration.” This form is available from the clerk of the court and on many Florida circuit courts’ websites. There’s a small filing fee; call ahead or check the court’s website to find out the exact cost. The following is a list of the things needed to file for this process and the procedure involved in it.

What You Need

  • Petition of disposition without administration: Three pages and notarized.
  • Certified death certificate.
  • If decedent has a will, then the original will has to be filed with the verified statement unless previously filed.
  • Copy of paid funeral bill.
  • Copy of paperwork showing decedent’s assets, i.e. copy of stocks, bank statement, etc.
  • Copy of last sixty days’ medical expenses with receipts.
  • Consents of any additional heirs with address and notarized signature, or death certificate, if applicable.
  • Statement regarding creditors.
  • Filing fee (call ahead or check the circuit court’s website to find out the exact cost)
  • An Affidavit stating that decedent was never married and did not have children may be required, if applicable.
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Contact Information
Jacksonville Office
4115 Hendricks Ave
Jacksonville, FL 32207
Phone: (904) 685-1200
Fax: (904) 875-4081
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822 A1A N #310
Ponte Vedra Beach, FL 32082
Phone: (904) 425-1910
Fax: (904) 875-4081
Satellite office with limited services and hours.
Call for an appointment.
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