If you fail to plan your estate and die without a will, the laws of the State of Florida will create an estate plan for you. The law prescribes both the persons
to whom your property will pass and the division of your property among those persons. The distributions provided by law are inflexible, and do not take into account any particular or special circumstances that may exist. In addition, any amounts to be distributed to your children may require legal guardianship proceedings if the children are minors at the time of your death.
If you die without a will and are survived by your spouse, the law states that your probate assets will pass to your spouse. However, if any of your children
are from a prior marriage, then the law states that two-thirds of your probate assets will pass to your children and one-third will pass to your surviving spouse.
For the most part a probate asset is any asset which is owned in your name alone at the time of your death.
If you die without a will, and do not have a surviving spouse, the law states that your probate assets will pass to your children. If they are minors, a guardianship
or conservatorship proceeding will be necessary to manage the property until the children reach eighteen years of age.
If you are not survived by a spouse or children, your probate assets will pass to your parents. If your parents do not survive you, your probate assets will
pass to your brothers and sisters.
What property will not pass under my will?
Certain forms of accounts and insurance policies are based on contracts and do not pass under your will. These assets will pass in accordance with the
beneficiary designation that is part of the contract. For example, proceeds from life insurance policies will pass to the beneficiaries named in the policies, and retirement accounts and annuities will pass to the beneficiaries named in those contracts.
In addition, property held in certain joint tenancies with a right of survivorship (e.g., joint bank or brokerage accounts, real estate owned as joint tenants with
a right of survivorship) will pass to the surviving joint owner.
You should review your beneficiary designations and joint ownership agreements to be sure they are coordinated with your will.
Who will raise my minor children after my death?
If you die leaving small children and the other parent survives you, the other parent ordinarily will raise and support them. If the other parent is not living,
your minor children will require a guardian. A guardian is an individual who is appointed by the circuit court to take custody of the minor child to have the possession, care and management of the minor's estate. The guardian is required by law to provide for the minor's health, education, maintenance and support.
You may appoint a guardian for your minor children in your will. If you do not have a will, or do not appoint a guardian, then the court will make the selection
of a guardian.
We recommend that you assume the responsibility for this important decision as a part of your estate planning. You may wish to look first to your contemporaries
in your family, such as brothers, sisters or cousins. You may also wish to consider friends with children in the same age range as your children. You should
consult with the proposed guardian to insure that the person is agreeable to assuming this significant responsibility. If you are designating a husband and wife
to serve as co-guardians, you should consider whether you want to specify that both of them are to serve only if they are still married to each other at the time
of the appointment.
If both parents die, your minor children may be left with substantial property interests that need management and protection. You may wish to consider whether
the same person is appropriate to take care of your children and to manage their property interests.
We generally recommend that, upon the death of you and your spouse, a trust be established for your minor children. The trustee should be encouraged to make generous distributions to assist the guardian, including the provision of funds to pay for any necessary expansion of the guardian's home.
Who is a "Personal Representative?"
Your Personal Representative (known in other states as an Executor or Administrator) is the court-appointed fiduciary who will serve as the personal
representative of your estate for purposes of administration. In your will, you can designate the person to be appointed as the Personal Representative. If you
do not have a will, the court will appoint a Personal Representative to administer your estate.
What is "Administration" of my estate?
Administration of an estate involves the collection of assets, the payment of debts or liabilities, and the distribution of properties to the beneficiaries or heirs. Administration of an estate is conducted under the authority and supervision of the Probate Division of the Circuit Court. It usually includes filing with the Court an Inventory of all assets of the estate, followed by the filing of one or more Accounts indicating the disposition of those assets. The costs involved, the length of time, and the formality of the proceedings will depend in part on the value of the estate assets, the clarity of your estate plan, and the presence or absence of conflict among your heirs.
What is a trustee?
A trustee is one to whom property is transferred to be held and managed for the benefit of someone else the beneficiary).
Under current law, a trust can be designed to produce almost any result desired by the client if the client gives the trustee sufficient funds with which to work.
We usually recommend that trustees be given very broad and adaptable powers to provide flexibility for future events. the trustee should be empowered to do
what is best for the beneficiary, in furtherance of the purpose of the trust.
If a trust appears to be a suitable part of your estate plan, you will need to exercise care in the selection of a trustee. The trustee should have the ability to handle management of the trust assets. Some clients choose family members with the necessary expertise; other prefer to designate a professional fiduciary or a corporate trustee such as the trust department of a local bank. If we recommend a trust to you as a part of your estate plan, we will assist you in determining and appropriate trustee.
What is a durable power of attorney?
A “durable power of attorney” permits you to authorize another individual or entity to manage your affairs. It is a relatively simple written document in which you, as the principal, designate someone you trust – such as your spouse, another family member, a friend, or a professional – as your “attorney in fact” or “agent.” This person is authorized to perform certain acts on your behalf. You may give as much or as little power to your attorney in fact as you desire. For instance, you may authorize your attorney in fact only to have the power to transfer your assets to a trust set up for your benefit. Or the power could be very broad and you could authorize your attorney in fact to do anything with respect to your assets that you could do yourself. This could include access to your safe deposit box, management of your investments, running your business,
and the sale or transfer of your assets. The powers you give your attorney in fact will be in effect when the document is signed.
The authority of a simple power of attorney terminates on the disability of the principal. If you want the power to remain in effect if you become disabled or incapacitated, it must be designated as a “durable power of attorney.”
We generally recommend the designation of a general durable power of attorney as part of the estate plan.
In view of the significant authority and discretion conferred by a general durable power of attorney, the attorney in fact must be someone in
whom the principal has complete trust and confidence.
What is a "Designation of Health Care Surrogate"?
A Designation of Health Care Surrogate (sometimes called an Health Care Power of Attorney) is a legal document that allows you to name someone
you know and trust to make health care decisions for you if for any reason and at any time you become unable to make or communicate those decisions for yourself. While you are competent, you are in charge of decisions which pertain to your health care. The laws of Florida protect your right to consent to any health care, or to withhold your consent, in accordance with your own wishes and beliefs. In the event that you are
unable to express your wishes, an agent designated by you under a Designation of Health Care Surrogate can speak on your behalf.
In your Designation of Health Care Surrogate you can specifically authorize the providing, withholding or withdrawal of life-prolonging or other specific procedures, and you can specifically authorize anatomical gifts, and organ, tissue or eye donation after your death.
We generally recommend a Designation of Health Care Surrogate as part of the estate plan.
Your Health Care Surrogate should be a person who can act in your interest, express your wishes and speak on your behalf to medical
professionals. It should be a person, probably a close family member or friend, who is likely to be present and available when medical decisions
need to be made.
Why should my will or trust be so long?
Although it is possible to draft a legally binding will or trust in a short, generic form (and there are attorneys and document services that will provide these documents for you for relatively small fees), such a document does not address the particular circumstances of your family or your plans.
We prefer to draft a will or trust that will accomplish your objectives for your beneficiaries. This document is intended to take into account the various factual and legal situations that reasonably may be expected to arise, and to anticipate and resolve what otherwise might become cumbersome problems.
Accordingly, the will that we draft for you may or may not be a lengthy document. Whatever its length, however, it will reflect appropriate consideration of your particular circumstances and your objectives.
What is community property?
Under the community property system, marital property generally is deemed to be owned one-half by each spouse, regardless of the legal title
to the property. Louisiana, Texas, New Mexico, Arizona, California, Nevada, Washington, Idaho, and Wisconsin are community property states.
Florida is a common law jurisdiction, and legal title to property generally controls the ownership interests.
However, if you have ever lived in a community property jurisdiction while married, we will need to perform a special review of your estate plan
to account for any community property consequences.
How will my estate be taxed at my death?
Your estate may be subject to the federal estate tax. In addition, if you own real estate (or tangible personal property) in another jurisdiction,
there may be an additional estate tax due in that jurisdiction.
The federal estate tax is based on the fair market value of your gross estate at the time of your death. At the option of your personal representative, an alternate valuation date of six months from the date of your death can be used.
Your gross estate is not the same as your probate estate. Your gross estate includes the value of all property in which you own any interest at
the time of your death, including your retirement accounts and the face value of your life insurance policies. Additionally, your gross estate may include property that you do not own, but over which you have retained or received certain rights or powers.
For a person dying in the year 2014, the gross estate will be exempt from federal taxation if it does not exceed $5,340,000.00.
The federal estate and federal gift tax are combined (“unified”) and one progressive set of rates applies. The rates
increase as the cumulative total of taxable transfers increases. A unified credit against the gift or estate tax permits the tax-free transfer of prescribed amounts of property.
The estate tax scheme provides you with an unlimited “marital deduction” for bequests of property to your surviving spouse. The marital deduction in effect allows interspousal transfers to pass tax-free because they are deducted from the value of the gross estate. In order to
qualify for the unlimited marital deduction, property must be transferred to the surviving spouse in a fashion that satisfies the technical requirements of the Internal Revenue Code, such as an outright transfer or in certain types of trusts.
The availability of the unlimited marital deduction will allow many estates to pass free of federal estate tax to the decedent’s surviving spouse.
The tax is deferred until the second spouse dies. While this result seems desirable initially, in some instances there may be tax savings from incurring some tax on the death of the first spouse. There may also be tax savings if a trust is created to take advantage of the federal tax exemption in the estate of each spouse.
We will review the alternatives in your estate plan to determine the most effective strategy to minimize tax liabilities.
Special rules apply when the surviving spouse is not a United States citizen. It is important that you let us know if either spouse is not a United States citizen.
How frequently should I review my estate plan?
As a general rule, we suggest that you contact us every three yearsfor a conference to review your estate plan in light of changes in your circumstances and changes in the relevant laws. We also recommend that you review your estate plan whenever there is a significant change in your financial or family situation. It may be helpful to review your estate plan if you plan to purchase substantial life insurance, if you are preparing to retire, if you become aware of a significant inheritance, or if you are getting married or divorced. If you are uncertain whether a certain event or circumstance may affect your estate plan, we would be glad to meet with you and evaluate the situation.
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