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A will does not avoid probate. A will sets out the wishes of the deceased, such as naming beneficiaries and the Personal Representative to administer the estate. A will allows a person to state how property should be distributed after their death. In Florida, a will gives instructions for financial accounts, real estate, and even personal property. The directions in a Florida will override the default inheritance provisions of Florida law to the extent allowable by law. Further, making a will in Florida also allows you to choose the guardian of a minor child should both parents pass away before the child. Essentially, the will serves as the “roadmap” for the Personal Representative to execute.
Probate is a court-supervised process for identifying and gathering the assets of a deceased person, paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries. There are two main types of probate administration under Florida law: formal administration and summary administration. Probate is necessary to pass ownership of the decedent’s probate assets to the decedent’s beneficiaries, if the decedent did not have a will. Probate is also necessary to complete the decedent’s financial affairs after his or her death. Administration of the decedent’s estate ensures that the decedent’s creditors are paid if certain procedures are correctly followed. Probate may be necessary to transfer ownership of the decedent’s probate assets to the decedent’s beneficiaries. If the decedent left a valid Will, the Court will admit the Will (according to procedures) to probate to transfer ownership of probate assets to the named beneficiaries. If the decedent had no Will, probate might be necessary to pass ownership of the decedent’s probate assets to those receiving them under Florida law. Some assets do not require a probate proceeding to transfer ownership.
A way to potentially avoid probate is to hold some or all of your assets in a trust. The most basic form is a revocable living trust. Assets held in trust do not have to go through probate, so they can be distributed quickly and confidentially. A trust also provides a greater level of detailed planning than most wills. Assets are placed in the trust for the benefit of the individual making the trust and for other beneficiaries. The distribution of assets held in a living trust is not a court-supervised process and thus provides privacy throughout the process, as opposed to public record with probate. You can appoint yourself or another person or entity to be the trustee during your lifetime responsible for managing those assets. If you appoint yourself as trustee, you’ll want to also name a successor trustee to manage the assets if you become incapacitated and at your death.
Powers of Attorney are important documents to execute when completing your estate plan. If you become incapacitated without a Durable Financial Power of Attorney, a court will need to appoint a guardian to manage your affairs, pay your bills and maintain your property and investments. Guardianship proceedings can be time consuming and expensive and there is no guarantee that the court will appoint the person you would have wanted as guardian. You can easily avoid this situation if you plan and appoint an Agent to act on your behalf. With a well-drafted Durable Financial Power of Attorney, your Agent will be able to make financial decisions about your property on your behalf. A well-drafted Healthcare Power of Attorney will allow your named Agent to make medical decisions on your behalf in the same fashion during your incapacity.
Even if you have set up a revocable trust, Powers of Attorney are an important element of your estate planning. The primary reason most people set up trusts is to avoid probate; however, only assets that are properly transferred into trust ownership will escape probate administration. Therefore, if you become incapacitated and your family discovers that you forgot to transfer a solely-owned bank account into the trust, that account would be subject to probate at the time of your death. If you had executed a Power of Attorney with specific authority to transfer assets to your trust, your Agent could have placed the account into trust ownership prior to your death, thereby saving your heirs the time and expense of probate administration.
Your estate plan will change with your circumstances. You should review your estate plan every two to three years, or sooner if major life changes such as moving, birth, death, marriage, divorce, inheritance, or becoming an “empty nester” occur. Don’t leave your estate plan in the past while your life moves forward.
An estate plan can keep your business and personal assets out of probate court, making the transition of your assets much smoother for your family members. Additionally, by creating an estate plan, you will have full control over what happens to your business and other assets after you die or become incapacitated. Succession planning is a strategic blueprint for creating a seamless transition of business operations, management and ownership to partners, future generations or successor owners. For people who are in a partnership business, it’s important to create a succession plan as part of your estate plan to ensure that whoever replaces you as a business owner is someone you fully trust and who is invested in your business. By creating a succession plan in advance, you can provide stakeholders with the expectation of a smooth transition that adheres to the company’s mission and vision.
In Florida, you can protect your pet’s future after your death or incapacitation through a pet trust. Pet trusts are legal documents that provide finances, care and maintenance of your pet. No human beneficiary is required, but you must designate a responsible trustee (or allow the court to select one). The trustee will be responsible for managing and spending the funds in the pet trust.
Florida does not have an estate tax or an inheritance tax. However, Florida residents may still have to pay Federal Estate Taxes.
DIY estate planning services provide easy-to-make wills and Powers of Attorney online. They may provide some financial and time-saving benefits, therefore many people use them. However, they can lead to extremely expensive mistakes and invalidation. Risks involved are expensive mistakes and errors, the platform and documents not being customized according to Florida law, improper execution techniques which can invalidate the documents, and overlooking key estate planning areas that an attorney would advise you on. It is highly advised that DIY estate planning services are never used in place of the support of an estate planning attorney.
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