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In simplistic terms, a will is a document whereby an individual designates the individuals, charities or other entities who will receive his property upon death.
Additionally the will designates who will manage his estate (in Florida known as the Personal Representative) and can include other provisions such as how a trustee under a trust created pursuant to the will should manage the trust’s property, who should be appointed guardian over any minor children and even may contain wishes concerning funeral arrangements. If a person dies intestate in Florida without having prepared a will (intestate) Florida Statute 732.102 will determine the manner and persons to whom the individual’s property is distributed. This may or may not be consistent with how you would have devised your property had you left a properly executed will. People often ask whether a will is absolutely necessary. Why did they take the time and expense to create a trust if they still need a will. There are so many collateral issues depending on the type of property involved and the identity of the heirs, whether homestead property is involved, etc., who are the intended devisees, title of property, that it is impossible to provide a simple answer. Generally speaking, it is best to always have a will as a back-up, even if you have other documents, such as a revocable trust, and even if all of your assets are jointly owned or have beneficiary designations. Often times there is property that has been overlooked, or that is acquired after death, and a will can provide for the distribution of these assets to the people whom you would want to receive it. If you die without a will, there is an intestacy statute which will control the distribution of your property in a manner which you may not desire or have foreseen. There are specific requirements for a will to be valid, and it is always best to have an attorney draft the will so that the proper provisions are included which will ensure your property is properly distributed to your loved ones and that your estate is administered in an efficient manner and if you are not an attorney, it is very possible that you will not understand how these laws will affect the distribution scheme you intended.
In order to simplify things, a trust is a legal arrangement whereby one person usually referred to as the settlor, or grantor, gives property to another person or entity known as the trustee, who agrees to manage that property for the benefit of whomever the settlor chooses.
In the standard revocable trust, the initial trustee is also usually the settlor who manages the property for his or her own benefit during lifetime. Upon death, a successor trustee that has been named in the trust, takes over management of the trust property and depending on the desired results and the terms of the trust, either distributes the property outright to beneficiaries, or continues to manage the property for the benefit of the beneficiaries (this is often the case if the beneficiaries are minors where a continuing trust for the children is established within the trust). If you want to
learn more about trusts I have seen a number of clients come through the office over the past few months who, usually in the process of trying to sell an inherited home, that either through oversight, or lack of information given to them by the attorneys who assisted them with their estate planning documents, failed to fund their revocable trusts properly. In the majority of these cases, the asset they consistently failed to place in the name of the trust, real estate, was not properly placed into the trust. When these individuals then attempted to sell the property, the title commitment came back and it became evident, that either formal or summary administration in a probate proceeding would be required in order to sell and convey title to the property. Interestingly, upon review of the wills in many of these cases, contained standard pour-over-provisions, wherein the residuary clauses of the wills devised the assets to a revocable trust which had been created by the clients. Unfortunately, the efforts these clients had made and the funds they had expended in trying to ensure that their heirs could avoid costly probate and timely probate proceeding upon their death were all in vain because they had failed to properly convey title to the real estate to the trustees of the revocable trust they had established. Fatal Trust Mistakes It is pointless, to establish a revocable trust and not place the assets you would like to pass according to the terms of the trust, into the trust. This principle pertains to bank accounts, brokerage accounts, real and other tangible and intangible assets. If the primary objective, is, as it is in most cases, to use a revocable trust as a probate-avoidance mechanism, failing to convey or assign assets to the trustee of the trust as required, is a fatal mistake. Consult an Attorney It is possible that many of these people had used self-help forms purchased online and did not comprehend how all the pieces (in this case the estate planning documents) all fit together. Thus, while it is easy to do the forms online and may cost less, estate planning is a complex process and it is better to consult with an attorney who can look at all your assets, come up with a plan that makes sense, and then have you take the steps necessary to execute the plan. I always try to formulate the simplest, most cost-effective estate plan for clients based on you and your intended beneficiaries’ circumstances.
Learn more about various issues relating to estate planning here in our Blog where we focus on issues like the use of lady bird deeds, also known as enhanced life estate deeds, as a way to keep your home out of probate. We also take a look at other topics relating to estate taxation, marital deduction planning and credit shelter trusts, disclaimer planning as an alternative to the classic a/b trusts, q tip and partial q tip elections and other probate related topics. We are a full service Fort Lauderdale estate planning law firm that can assist you with all areas involved in estate planning. Call today to discuss your estate plan with the attorney.
Phone: (954) 417-4879.
Probate is a legal proceeding initiated upon a person’s death and which essentially serves to wrap up the individual’s affairs. It can be viewed as a type of lawsuit whereby the court supervises the distribution of the decedent’s assets and the payment of creditors. Probate may or may not be required depending on the nature of the assets of the estate. In many cases, the decedent has left no “estate assets” to probate because the assets are all owned along with a spouse or other individual as joint tenants (such as a house owned with the spouse). If this is the case, probate will not be necessary because the property will automatically pass to the surviving joint tenant without the need to prove entitlement to ownership through a probate proceeding.
Other examples of property that is not subject to probate are assets with beneficiary designations such as POD bank accounts, as well as life insurance, or retirement plans. Sometimes very large estates will not require probate while very small ones will, depending on how the assets have been titled as well as other factors too numerous to mention. In a probate proceeding, the person nominated by the will, if one exists, is known as the personal representative. His or her job is to administer the estate for the benefit of creditors and the beneficiaries or heirs of the estate.
The PR must use the available assets to pay creditors, estate taxes and costs of administration. If assets remain available, the PR can then distribute the remaining property to the heirs. In Florida, unless the PR is a Florida attorney, it he or she is required by law to have an attorney represent him in the probate proceeding. If there are assets under $75,000, a summary administration (an abbreviated probate proceeding)may be available. This procedure is also available if the person died more than two years ago. An attorney will usually charge a fee based upon the value of the assets contained within the estate as well as based on other additional factors, such as additional petitions that must be filed and whether estate tax returns are required.
Depending on the size of the estate, the fee charged by an attorney will range from $2,500 and upwards. An estimate would range somewhere between 2 and 3% of the total assets in the probate estate excluding the value of the homestead real property.
A revocable trust may be useful for you depending on your circumstances as an alternative to testamentary planning focused on the use of a will. Revocable trusts can be a convenient mechanism for the transfer of assets to your heirs without the need for probate
Yes, 100%. Regardless if your estate plan focuses on the use of revocable trusts, pay on death accounts, and jointly held assets, the will will serve as a backup in the event that you have inadvertently failed to properly fund your trust, or failed to properly title other assets preventing those assets from passing automatically upon your death. In this event the will would control the disposition of these neglected assets and prevent them from descending according to the intestacy statutes in the even you die intestate.