QUESTIONS ABOUT YOUR ESTATE PLAN AND OUR SERVICES
This was prepared to answer the many questions asked by clients during estate planning conferences over the years. We appreciate your taking the time to read it. If it raises new questions, please make a note of them and we will answer them at your conference.
WILLS:
Q. What Happens If I Die Without a Will?
A. If you do not make a Will to name your beneficiaries, the laws of Florida will decide who gets your property, who administers your estate and who becomes the guardian of your children. If you are married, part of your property may go to your children or other relatives instead of all to your spouse as you might expect.
Q. Why Should a Lawyer Prepare My Will?
A. Your Will should cover many possibilities to avoid serious problems for your beneficiaries. Only an attorney can assure the correct language, form and manner of signing the Will and having it witnessed, so that it is an effective legal document, minimizing the possibility that it will be challenged.
Q. Suppose My Spouse and I Own Everything Jointly, Do I Still Need a Will?
A. Joint ownership is no substitute for a carefully drafted Will. Either of you may have property in your sole name which you have forgotten; either of you may inherit from others; you may both die in a common accident; or a number of other reasons make it prudent to have a Will.
Joint ownership may save time or expense in probate; however, the property will be included in your estate for federal estate tax purposes. If your estate is moderate or large, it may have the result of increasing the total tax burden on the estate. It may even trigger federal gift taxes if the joint owners did not each contribute equally to the original purchase or other acquisition of the property.
Q. Can the Same Attorney or Law Firm Represent Both the Husband and the Wife?
A. Normally, when a husband and wife are preparing their estate plans, they are in agreement and the beneficiaries of their wills or trusts are identical. There can, however, be conflicts related to their choices of beneficiaries I estate tax consideration or provisions which they make for each other. if such conflicts exist it would be inappropriate for us to represent both individuals unless each acknowledges the conflict and assures us we can discuss all information with either spouse. If this is not the case, then each spouse will need a separate estate-planning attorney.
Q. I Have a Will Prepared in Another State. Do I Need a Florida Will?
A. If a Will was executed according to the laws of the State where you previously resided, then that Will is valid in Florida. Florida does not recognize, however, oral wills or holographic Wills, which are made in the handwriting of the Testator without witnesses.
Even if your out-of-state Will is valid in Florida, it is important to have it reviewed and you may wish to execute a new will. Your out-of-state Will may not be self-proving. This would mean that at your death at least one witness would have to be located before the Will could be admitted to probate in Florida. This can be an expensive and time-consuming procedure. Additionally, there are restrictions on who can be named to serve as your Personal Representative. So if you live in Florida, it is a good idea to have a Florida Will.
Q. Why Is it Necessary to Disclose to the Attorney Information Regarding My Assets When I Make a Will?
A. As attorneys, we are bound by a very stringent ethical code. We will keep confidential any information we receive from you and any communication we have with you. We cannot properly advise you however, unless we have a complete understanding of your assets and how they are titled. This information will affect how your property passes at your death and whether we need to plan for the payment of taxes to be paid at your death or that of your spouse.
Q. If I Make a Will Does it Have to Be Probated?
A. Probate is the court-supervised process which insures the proper distribution of your assets to your beneficiaries or heirs. Any assets which you hold in your own name at your death are subject to this process, whether you die with or without a Will. Contrary to what you may have heard, probate is NOT an unduly lengthy or costly process in Florida. There are, however, methods of minimizing the need for probate. We will be glad to discuss these alternatives, the probate procedure and costs of probate with you.
Other Estate Planning Documents:
Q. Estate Planning Beyond a Will?
A. You may have called our office for the purpose of making or revising your Will and we are certainly prepared to accomplish that for you. However, you may want to consider other goals such as planning for incapacity or the use of trusts for the distribution of your assets at death. You can create special trusts for minors or others which contain special provisions providing for education, health or emergencies. If tax planning is desired, special clauses can be inserted, prepared especially for your estate, which may substantially reduce estate taxes.
Q. What Is a Living Trust?
A. A trust is a transfer of property from one party, the Grantor, to a second party, the Trustee. The Trustee holds the trust property for the benefit of the Grantor or whomever the Grantor directs. often times, you will choose initially to act as your own trustee. A living trust is a separate document from your Will. Under a living trust, you may receive all of the income as well as the right to use the principal of the trust as you wish. The trust directs who will receive the assets when you die. Though this type of trust has no estate or income tax advantage for you, it provides a means to manage your assets if you were to become incapacitated. You do this by designating a successor Trustee who will pay bills for you and administer the trust property if you are unable to do so.
Q. Should I Have a Power of Attorney?
A. A power of attorney is a delegation of authority from you to another person. The Florida Statutes authorize the use of a durable power of attorney which is valid until your death or until you are adjudicated incompetent by a court. Even if you have a stroke or are otherwise totally incapacitated, someone will be able to make decisions and transact your affairs. A power of attorney is important whether you have a Will or a living trust.
Q. If I Need a Guardian May I Choose My Own?
A. By planning for an incapacity, we can minimize the need for you to ever have to have a guardian appointed. But, even through the careful use of powers of attorney and living trusts there are certain circumstances in which a court appointed guardian may be needed. You may choose your own guardian by executing a designation of pre-need guardian and filing that designation with the Clerk of the Court. If a guardian is ever appointed by the Court, then preference will be given to your choice.
Q. What Is a Living Will?
A. Under the Florida Life Prolonging Procedures Act, you may sign a declaration directing your doctor to withhold or withdraw extraordinary life support if you are diagnosed as being in a terminal condition and if the doctor certifies that your death is imminent. You may specifically direct that you do not wish to receive any feeding tubes or other forced sustenance. You may also designate a specific person to make treatment decisions for you if you are in a terminable condition.
Q. What Is a Health Care Surrogate?
A. If you are determined by two physicians to be incapacitated and unable to make medical decisions for yourself, then a health care surrogate may make these decisions for you. You may name the surrogate in advance. if you have not made a health care surrogate designation or do not otherwise have a power of attorney, the hospital or other med cal facility can ask that a health care surrogate (usually one of your family members) be appointed for you.
GENERAL INFORMATION:
Q. What Are the Charges for Our Services?
A. Because each situation is unique, we are unable to quote a fee for our services until we have had an opportunity to speak with you personally. After a brief consultation we will be glad to give you a very clear estimate at fees. it you decide not to go ahead with the preparation of documents or further planning, we will waive our fees for this initial interview.
Q. How Often Should I Revise My Estate Planning Documents
A. Any time there is a change in circumstances such as moving to another state, births or deaths in the family, or a substantial change in your assets, you should discuss it with us; otherwise, we recommend a brief review of your estate plan every three to five years.
Q. What Can I Do to Prepare for My Estate Planning Appointment with an Attorney
A. 1. You can make an inventory of your property - enclosed is an Information Sheet for you to complete.
2. You can decide who will be the Personal Representative (executor), the Trustee and/or the Guardian of your children, in the event that you and your spouse die together.
3. You can decide who will receive your personal clothing, jewelry, furniture, car, etc. Usually these are left to the spouse or a particular member of the family.
4. You can decide who will receive cash sums.
5. You can decide who will receive your residence, subject to certain legal rights of your spouse and children.
6. You can decide to make gifts of income by setting up a trust.
7. You can decide whether your Personal Representative should preserve or sell an interest you have in a business.
8. You can decide who receives the balance, or residue, of your estate and how and when.
Q. What Estate and Inheritance Taxes must Be Paid at My Death?
A. The Federal government imposes a Federal Estate Tax on assets in your "gross estate" over $3,5000,000.00. Your "gross estate" consists of all property you own individually or jointly, including real estate, cash, stocks, bonds, mortgages, notes, life insurance pensions, furniture and auto-mobiles. There are certain deductions which may be taken for various expenses as well as a deduction for amounts passing to charity or your spouse.
Florida, unlike many other states, does not have a separate inheritance tax. It does impose an estate tax, but the full amount paid can be taken as a credit on the Federal Estate Tax. Therefore, the total amount of taxes paid is not increased by the portion of the taxes paid to the State of Florida and no tax is ever paid if the assets in the gross estate are less than $3,500,000.00.
This newsletter is designed to provide informative material of interest to our readers. Readers should not take or omit any action based solely on the basis of this newsletter as isolated circumstances may require action different from that described in this general orientation document. Appropriate legal advice or other expert assistance should be sought from a competent professional.