In last month’s blog, we explored the meaning and significance of estate planning, which is the process of designating who will receive a person’s assets in the event of their death and who will care for a person in the event of their incapacitation. Estate planning is an important task we encourage all of our clients to consider.

A proper estate plan will include multiple documents, which we break into two parts. This blog will dive deeper into Part 2.

• Part I Planning for Incapacitation

Documents to designate individuals who will make decisions for you while you are alive but unable to make your own decisions.

• Durable Power of Attorney
• Healthcare Surrogate
• Living Will 
• Learn about these in detail in our previous blog, Your Guide to a Comprehensive Estate Plan Part 1- Planning for Incapacitation.

• Part II  Planning for Death

Documents that provide instructions on how to distribute your property upon your death.  

• Last Will and Testament
• Trust
• Deeds, beneficiary designations, and other documents that permit you to distribute property upon your death. 

Every legal process is different, and seeking the services of competent estate planning attorneys can simplify the process and save you time and money. The attorneys at McCart & Tesmer practice in the areas of probate, estate planning, and family law. Contact us if you have questions or are ready to have our attorneys work on your legal matter.

Phase 2 Documents

1. Will

In Florida, a Last Will and Testament is a written document that directs who will receive property and assets upon your death. It also allows you to choose the guardian of a minor child should both parents die while the child is under age 18.

A Last Will and Testament is an essential document for all individuals, even if you have no children and do not own real estate. Without a Last Will and Testament (or another plan, such as a living trust), your estate would be considered “intestate,” which means that the State of Florida dictates how the property will be distributed. Don’t confuse this with the notion that the State of Florida will take all of your property; instead, the State of Florida law dictates the order and hierarchy of how your property is distributed to your relatives, such as spouse, children, parents, which may include relatives you would instead not inherit from you.  

One of the most important decisions you will make for your estate plan is who you choose as the administrator or personal representative of your will. The personal representative, also known as an executor in other states, is the individual or corporation who will carry out the provisions of your Will. This administrator should be someone you trust, who is financially responsible, and willing to serve. We always advise speaking with this individual or corporation before nominating them as Personal Representative or executing your will.

Some questions to answer before you begin drafting your Last Will and Testament:

• Which trusted adult can and will take care of your minor children?
• Who do you want to get your property to? 
• Will your beneficiaries be treated equally?
• Are there any beneficiaries (or potential beneficiaries) that will be minor or need their money to be managed for some time?
• Are there charitable organizations you want to support?
• Are your pets provided for?
• Do you have everyone’s legal names? 
• Do you have specific instructions regarding your remains, such as buried or cremated?

Thanks to Florida lawmakers, anyone can write a will on a piece of scratch paper or create one online and have it considered legal and valid in the state. However, these DIY Last Will and Testaments rarely protect the decedent and the beneficiaries in the way the drafter intended. Even if this is your chosen route, we still say It’s best to have an estate planning attorney help you. Call us at 813-498-2757 for a free consultation. 

2. Trusts

The four main types of trusts are living, testamentary, revocable, and irrevocable. However, there are further subcategories with various terms and potential benefits.

• Testamentary Trust: This type of trust is set up after death according to your Last Will and Testament. Since the terms of a testamentary trust are established in your Will, and you can change the terms at any time up until your death, this trust can be simpler and more flexible than a living trust, but it will require court intervention (i.e., probate) after your death.

• Revocable or Living Trust: Created while you are still alive to efficiently transfer assets to beneficiaries. A revocable or living trust accomplishes by avoiding probate, the court proceedings for distributing assets after death. Avoiding probate can save time and court fees and potentially reduce estate taxes for beneficiaries. 

• Irrevocable Trust: Unlike the revocable trust, no one can alter the terms of an irrevocable trust after it is created. The primary purpose of an irrevocable trust is so you can transfer assets out of your taxable estate. Income from the assets transferred into the trust is no longer taxable to the benefactor during their lifetime. The assets are not taxable to the estate upon the benefactor’s death.  

Florida trust laws state that a trust is created only if:

• The settlor has the capacity to create trust.
• The settlor indicates an intent to create the trust.
• The trust has a definite beneficiary or is a charitable trust, a trust for the care of an animal, or a trust for a noncharitable purpose.

One of the main benefits of having a trust is that property contained within the trust does not have to go through probate, instead passing directly to beneficiaries. This c n mean savings of both time and money for your loved ones. 

Our attorneys can help you find the best plan to suit your needs. Give us a call at 813-498-2757 for a free consultation. 

3. Deeds Other Documents That Permit Distribution of Property Upon Death  

One of the main objectives of any comprehensive estate plan is efficiency and allowing your loved ones to start benefiting from your assets with minimal delay or added expense. There are several ways one can achieve this, such as:

• Joint Ownership of Tangible Property – Joint owners on bank accounts, vehicles, or vehicles using the term “or” between owners. This allows the surviving owner to keep the property after a co-owner passes away.

• Joint Ownership of Real Property and Deeds – By adding particular language to your deed, you can add a co-owner or beneficiary to your property. To acc plish this, we frequently use the following deed designations:
  • Joint Tenants with Right of Survivorship
  • Tenancy by the Entirety (for spouses only)
  • Life Estate Deeds (also known as Lady Bird Deeds) 

• Beneficiary Designations, Payable on Death, or Transfer on Death  – You can leave property to loved ones if there are beneficiaries. If there is no beneficiary, you may be able to convert the account to a Payable on Death or Transfer of Death account, allowing you to add a beneficiary to the account. This is often utilized at banks and credit unions. 

No two people are alike, and no two estate plans should be either. With the proper documents in place, property ownership will automatically pass to your beneficiaries when you pass. Are your assets secure? Is your family protected? 

If you are considering creating or amending your will, trust, or any of the estate planning documents we’ve covered, McCart & Tesmer can help. Our expert attorneys will ensure you choose the proper documents for your family. Contact us at 813-498-2757 or info@McCartTesmer.com for a free consultation.  

To the average person, the term “probate,” and its process is a complete mystery. When asked what probate is, a non-lawyer may be able to explain probate is a legal process that takes place after someone dies – but chances are not much more is known than that. In this month’s blog, we break down the definition of probate and discuss the probate process in Florida. 

The following is a brief list of the most common terms found and used throughout the probate process:

• Probate – The process of collecting a decedent’s assets to pay off debts and distribute assets to their heirs. In Florida, that process is governed by the circuit courts, and, in most counties, one judge is appointed to handle all probate matters.

• Decedent – A deceased individual.

• Intestate – When a person dies without a valid last will and testament, the State of Florida declares the property of the deceased “intestate.” Intestate probate is distributed according to Florida’s prescribed order and hierarchy of beneficiaries. 

• Probate Court – Used to describe the court where the probate matter is administered. 

• Personal Representative (PR) – A person or entity legally appointed to oversee the distribution of assets from a deceased person’s estate. This term is synonymous with the term “Executor” but Florida uses the term Personal Representative. 

• Beneficiary/Beneficiaries – An individual or group named in a testamentary document, such as a last will and testament,  to receive a portion of the decedent’s assets.
• Notice of Administration – A written notice mailed to beneficiaries and other interested parties by the Personal Representative letting the recipients know that a probate was opened. A Notice of Administration is required in Florida and provides specific details on the probate proceedings, such as the case number and court where the probate is pending, and any deadlines to object to the probate and Personal Representative.
  
• Probate Litigation – Describes a legal dispute during the probate process. The most common types of probate disputes during a probate include challenges to wills/trusts, legal disputes over guardianship, and challenging or requesting the removal of a personal representative. 

Typically, probate begins shortly after a decedent’s death by filing the decedent’s last will and testament (or “Will”) with the circuit court clerk in the county where the decedent resided. In some cases, a probate may be in a county where the decedent owned real estate. 

In the absence of a valid Will, the State of Florida will declare the estate is “intestate.” Florida has a specific process for determining who receives the decedent’s assets, the entirety of which can be found in Chapter 732 of The Florida Statutes. In instances with no Will, the Court will determine the rightful heirs and who should serve as Personal Representative (PR) based on state law. If the initial documents filed are in proper form, the Court will issue Letters of Administration as proof that the PR is empowered to act on behalf of the estate.

Once qualified, the PR then begins the process of gathering the assets of the estate. The PR is responsible for collecting and managing probate assets, which are those assets that pass to heirs under the terms of the decedent’s Will or by the law of intestate succession if there is no will. The PR is responsible for determining which assets are “probate assets” and which assets were “non-probate assets”. Probate assets must go through the probate process while non-probate assets do not. 

Non-probate assets are those which pass to others by means other than a will or intestate succession. These assets pass directly at the decedent’s death, are not held up in the probate process, and are not subject to paying off debts. Examples include:

• Jointly titled assets that pass to surviving owners.
• Beneficiaries of individual retirement accounts, life insurance policies, or other assets that permit a beneficiary designation.
• Heirs of trusts who hold title to a decedent’s assets before death.

After gathering assets, the Personal Representative must notify creditors by mail and publish the deadline for filing claims against the estate to pay the decedent’s debts. If claims are not filed promptly, they will be barred, meaning the creditor does not get paid. The Personal Representative has 30 days after a claim is filed to object to the claim. If no timely objection is filed, the PR must pay the claim using estate funds. If the PR objects to the claim, the creditor has another 30 days to file suit to have the court decide the claim’s validity. If the creditor’s suit is not filed in a timely fashion, it will be barred and the creditor does not get paid.

In Florida, most beneficiaries are free of inheritance tax, but there are exceptions. Under current law, an estate will not pay estate taxes unless the value of its assets exceeds $12,000,000. However, even if no estate tax is due, the Personal Representative must file the decedent’s final income tax return, covering the year of the decedent’s death from January 1^st through the date of death. The decedent is further required to file an income tax return for the estate (form 1041) before the estate is closed, for any year its income exceeds $600. 

After all creditor claims are paid or resolved, the PR must distribute the remaining assets to the heirs. To do so, the PR may be required to close accounts to convert them to cash, sell other assets if the Will directs, or execute deeds to transfer real estate titles to heirs. In addition, the PR must file a final accounting with the court, showing which assets came into the hands of the PR, which debts and expenses were paid, and what bequests were distributed. The PR also must file a petition with the court to close the estate and discharge the PR from further service. If the court finds everything in order, it will issue an order to close the estate, at which time the process is finished.

The probate process typically takes a minimum of 6 months but can take over twelve months, although the timeframe may vary in some cases. Every legal process is different, and seeking the services of competent estate planning attorneys can simplify the process and save you time and money. At McCart & Tesmer, our mission is to serve as Tampa Bay’s leader in Marital Law, Family Law, Estate Planning, and Probate. If you are in the probate process and need help sorting out assets, give us a call for a free consultation today – 813-498-2757.