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WILLS, TRUST & ESTATES

Although no one likes to think about dying, there are good reasons to prepare for this inevitable event by setting up a plan to distribute one’s estate after death. We will look at one of the most common types here called Wills.

WHAT IS A WILL
A will is a written document specifying how and in what manner a person’s estate is to be distributed after his or her death. A person making a will is known as a testator. Anyone designated to receive property under a will is called a beneficiary. A will can be simple or elaborate, depending on the size of the estate and the wishes of the person making the will. A will can designate who receives artwork, jewelry, cars, real estate or any other property. A will can name a guardian to take care of minor children if there is no surviving parent and can disinherit a child if the testator does not want the child to receive any part of the estate. A will can also create a trust, make gifts to charity organizations or authorize the selling of real estate without court proceedings.

REQUIREMENTS OF A VALID WILL
Under Florida law, there are a number of requirements for making a valid will. A testator must be at least 18 years old and of sound mind and body when he or she signs the will; the will must be written and witnessed by two competent people, both of whom must sign the will in the presence of the testator and each other; the testator must sign the will at the end and in the presence of the two witnesses; and the will must be approved by a probate court. The manner in which a will is witnessed and signed is known as the will’s execution. If a will is not executed according to the formalities mentioned above, a probate court will not approve the will and the estate will be distributed under the state’s intestacy laws. Similarly, property owned by the testator but not included in the will is distributed according to the intestacy laws. A testator can revoke or change a will at his or her discretion. A will has no legal effect until the death of the testator. While Florida requires that a will be written, it does not have to be typed. A handwritten will, sometimes referred to as a holographic will, is valid as long as it is properly executed under Florida law. It is important to note that if there is a mistake in the preparation or execution of a will, resulting in the will being denied probate, Florida courts have ruled that the attorney who negligently prepared the will or negligently supervised its execution may be sued by the beneficiaries. The amount of recovery could be substantial, depending on the amount the beneficiaries would have received had the will been properly prepared and executed.

ESTATE PLAN CHECKLIST – 12 SIMPLE STEPS 

  1. Make a Will: In a will, you state who you want to inherit your property and name a guardian to care for your young children should something happen to you and the other parent.
  2. Consider a Trust: If you hold your property in a living trust, your survivors won’t have to go through probate court, a time-consuming and expensive process.
  3. Make Health Care Directives: Writing out your wishes for health care can protect you if you become unable to make medical decisions for yourself. Health care directives include a health care declaration (“living will”) and a power of attorney for health care, which gives someone you choose the power to make decisions if you can’t.
  4. Make a Financial Power of Attorney: With a durable power of attorney for finances, you can give a trusted person authority to handle your finances and property if you become incapacitated and unable to handle your own affairs. The person you name to handle your finances is called your agent or attorney-in-fact.
  5. Protect Your Children’s Property: You should name an adult to manage any money and property your minor child/ren may inherit from you.
  6. File Beneficiary Forms: Naming a beneficiary for bank accounts and retirement plans makes the account automatically “payable on death” to your beneficiary and allows the funds to skip the probate process. In almost all states, you can register your stocks, bonds, or brokerage accounts to transfer to your beneficiary upon your death.
  7. Consider Life Insurance: If you have young children or own a house, or you may owe significant debts or estate taxes when you die, life insurance may be a good idea.
  8. Understand Tax Implications: If you and your spouse together own assets worth at least $11 million, you may want to consider taking steps to reduce federal estate tax that will be due at the second spouse’s death. You may want to make tax-free gifts now or consider an AB trust.
  9. Cover Funeral Expenses: Set up a payable-on-death account at your bank and deposit funds into it to pay for your funeral and related expenses. 
  10. Make Funeral Arrangements: Make your wishes known regarding organ and body donation and disposition of your body — burial or cremation.
  11. Protect Your Business: If you’re the sole owner of a business, you should have a succession plan. If you own a business with others, you should have a buyout agreement.
  12. Store Your Documents: Your attorney-in-fact and/or your executor will need access to your documents, make sure you keep them in a safe place.

REVOKING OR CHANGING A WILL 
A will can be revoked or changed up until the death of the testator. To revoke a will, a person can simply tear it up, burn it or otherwise destroy the document. A person may also execute a new will, which automatically revokes an earlier will. If a person wishes to make a few changes to a will, he or she can have a codicil drawn up. A codicil is an addition or amendment to an existing will and must be signed and witnessed in the same manner as a will. Anyone wanting to change his or her will should never simply cross something out or otherwise write on the will. Writing on a will may invalidate it. A will can also be changed by operation of law. If, after executing a will, a person marries, divorces or has a child, and then dies without making changes to the will, the will is considered by Florida law to nonetheless have been amended, taking into account the new family situation. For example, if a person marries after executing a will and the spouse survives the testator, the new spouse is entitled to an intestate share (approximately 50 %) of the testator’s estate, even though he or she is not mentioned in the will. A person should review his or her will approximately every three years; a person’s financial or personal status may have changed, beneficiaries may have died, or a favorite charity may no longer exist. Countless lawsuits have been waged over what to do with a person’s estate in these situations; an up-to-date will avoids such problems.

RESTRICTIONS ON FLORIDA WILLS
In the interest of protecting the family, particularly the surviving spouse, Florida law places some restrictions on what a testator can do under the terms of his or her will. For example, a testator cannot disinherit his or her spouse without a properly executed prenuptial or postnuptial agreement. The state gives the surviving spouse a choice of either his or her share under the terms of the will or 30 percent of the decedent’s estate, less any valid claims against the estate, real property located outside of Florida, state and federal taxes and administration expenses. The surviving spouse, therefore, is always entitled to at least 30 percent of the decedent’s net estate, this is known as an elective share. The testator is free, however, to disinherit his or her children. There are also restrictions on what a person can do with his or her homestead (i.e., residence, as defined by state law, owned by a decedent who is survived by a spouse or minor child). In most cases, the surviving spouse or minor child retains some form of ownership of the homestead, thereby ensuring that they at least have a place to live. The surviving spouse and any dependent children are also entitled to what is known as a family allowance. Florida law authorizes a family allowance of up to $6,000 for a surviving spouse or dependent children, which is paid in addition to the amount passing to the spouse or children by will, intestacy or elective share. Any real or personal property jointly owned with another person (with a right of survivorship) cannot be given away by the testator since ownership of the property shifts to the other person upon the testator’s death. Similarly, a testator cannot specify that someone other than the beneficiary of the testator’s life insurance policy receive the benefits of that policy. Once the testator dies, the benefits of the life insurance policy immediately become the property of the beneficiary. Finally, the Cuban Assets Control Regulations, promulgated by the U.S. Treasury Department, prohibit distributions by will or inheritance from any state to a Cuban national or resident of Cuba.

DYING WITHOUT A WILL 
If a person dies without a will known as dying intestate his or her property will be distributed according to a formula defined by Florida law governing intestate inheritance. The law is rather rigid; it only recognizes relatives (thereby excluding a decedent’s friends, lovers or favorite charities) and makes no exception for anyone in unusual need. Moreover, the intestate distribution process is often more complicated, time consuming and costly than distribution under a will, and the process is administered by court appointed personnel, not the decedent’s family or friends. 

Briefly, Florida’s intestate law provides as follows:

  1. If there is a surviving spouse and no lineal descendants (children or grandchildren), then the surviving spouse takes all of the estate.
  2. If there is a surviving spouse and lineal descendants of both the surviving spouse and the decedent, then the surviving spouse receives the first $20,000 of the estate, plus one-half of the rest of the estate and the lineal descendants share the remaining half.
  3. If there is a surviving spouse and lineal descendants (one or more of which are not lineal descendants of the surviving spouse), then the surviving spouse receives one-half of the estate and the lineal descendants share the remaining half.
  4. If there is no surviving spouse, but lineal descendants, then the lineal descendants share the estate.
  5. If there is no surviving spouse and no lineal descendants, then the estate goes to the decedent’s surviving parents, and if none, then to the decedent’s brothers or sisters or descendants of the decedent’s brothers or sisters.

PERSONAL REPRESENTATIVE OF A WILL
A will typically appoints someone called a personal representative or executor to carry out the wishes of the testator as stated in the will. The personal representative should be a trusted friend or family member and should be made aware of his or duties before the testator dies. Under Florida law, a personal representative must be at least 18 years old and a resident of Florida. Convicted felons or persons incompetent to fulfill the duties of a personal representative are ineligible for the position. The duties of a personal representative are many. Depending on the nature of the estate, he or she may have to identify, gather and safeguard the testator’s assets, provide notice of the estate’s administration to all interested persons, contact creditors, settle valid claims, pay state and federal taxes on the estate and pay administrative expenses. Florida law provides that a personal representative can be compensated out of the estate for his or her efforts. If a testator does not name a personal representative in his or her will, the probate court may appoint a professional administrator to perform the requirements.

SUGGESTIONS CONCERNING WILLS

  • Marriage does not cancel a will in Florida, but a spouse acquired after the execution of a will may receive the same portion of your estate that he or she would have received had you died without a will (at least one-half).
  • If you have moved to Florida from another state, it is wise to have your will reviewed by a Florida lawyer in order to be sure that it is properly executed according to the laws of Florida, that the witnesses are readily available to prove your will in Florida, and that your personal representative is qualified to serve in Florida.
  • Before your will is effective to dispose of your property, it must be proved in the probate court. If the will is self-proving and otherwise valid, it may be admitted to probate without further proof. If the will is not self-proving, it generally must be proved by the oath of one of the witnesses. The oath must be given before a circuit judge, clerk of court, or a commissioner specially appointed by the court for that purpose. (Under certain circumstances, the court may permit the will to be proved by other means permitted by law.) A will can be made self-proving either at the time of its execution or later, which saves the time and expense of locating a witness and obtaining his or her oath after your death. For your will to be made self-proving, you must acknowledge the will before an officer authorized to administer oaths; the witnesses must make affidavits before the officer; and the officer must evidence the acknowledgment and affidavits by a certificate attached to or following the will. An appropriate form of certificate is prescribed by Florida law. The self -proving procedure is in addition to the normal execution and witnessing of the will, not in place of it.
  • No matter how perfect a will may be prepared for you, unless it is properly executed in strict compliance with the laws of Florida, the will may be entirely void. Be sure that you execute your will in the presence of your attorney, who knows exactly how and in what order the will should be signed.
  • Every person owning property who wishes to exercise control in the disposition of that property when he or she dies, should have a will regardless of the value of the property. Of course, the larger the estate the greater the tax consequences.

ADDITIONAL DOCUMENTS

  1. Living Will: Florida Statutes now provide for a written declaration by an individual specifying directions as to use of life-prolonging procedures.
  2. Durable Power of Attorney: This document can assist in handling the property of a person who has become incapacitated without to open a guardianship proceeding in court. This is especially valuable for paying the bills and protecting the assets of an incapacitated person.
  3. Health Care Surrogate: Florida law now allows individuals to designate a person to make health care decisions for them when the individual may not be able to do so. Included in this important appointment is the power to decide when to withdraw medical procedures.
  4. Pre-Need Guardian Designation: Florida law allows you to designate a person who could be appointed guardian over you should you become incapacitated and/or over your children should you become incapacitated or upon your death. If you fail to designate a guardian, the Court will do so for you if and when it becomes necessary.

The material on this page have been prepared and or compiled by torres|benet, p.a. for informational purposes only. RECEIPT OF THIS INFORMATION DOES NOT CREATE AN ATTORNEY-CLIENT RELATIONSHIP.