Estate Planning and Tax Lawyer Blog

Fortunately, there is some relief for the heirs (surviving spouse and children) of a decedent who passed away with few assets but a lot of debt. Section 732.402 of the Florida statutes lays out what type of property is exempt from creditor's claims.

Types of property that is exempt from creditor's claims are as follows:

1) The homestead of the decedent.
2) Household furniture, furnishings and appliances in the decedent's usual place of abode up to a net value of $20,000 as of the date of death.
3) Two motor vehicles (subject to some weight and use restrictions).
4) 529 and prepaid tuition plans.

The property listed above is exempt from all claims against the estate except perfected security interests thereon. There are other allowances as well that a family can have access to in a time where cash is short.

Continue reading " What type of property is exempt from creditor's claims in a probate? " »

Upon your death, what happens to your Florida homestead? The answer depends on whether you have a revocable living trust or a simple last will and testament.

If you have a revocable living trust that is fully funded where you have properly put your homestead into your trust, then the homestead will pass according to the provisions of your trust. The key here is properly put in your trust. Florida homestead law generally states that the surviving spouse must obtain some sort of ownership interest in the homestead unless a martial agreement is in place - prenuptial or postnuptial. If you have put your homestead into your trust without a separate agreement in place there could be some real estate title issues which is a topic for another day.

If you have a last will and testament, then your last will and testament will need to be probated. In the probate process the homestead will be dealt with through what is called a "Petition to Determine Homestead Status." This petition is important because the homestead passes free of any estate creditors to the surviving spouse or heirs and so this ensures that a creditor cannot force the sale of the homestead upon your death.

Continue reading " What Happens To Your Homestead Upon Your Death? " »

A child born after the death of the decedent but conceived prior to the decedent’s death are treated as if the child was born during the life of the decedent and shall received a full share of the estate that they are entitled to under Florida’s intestate laws. This is shown in Florida statute 732.106.

Continue reading " What Are the Inheritance Rights of a Child Conceived Before a Decedent's Death but Born After the Decedent's Death in the State of Florida? " »

It is always a good idea to consider a trust instead of a will to pass your assets to beneficiaries if you are unsure or know that your heirs would dispute your wishes. The settlement of assets in trust does not require a probate proceeding, which you would need if using a will. Unlike a will, which is contestable by those who feel left out or received less than what they feel they are entitled to, it will be far more difficult to contest a trust. Courts are more likely to leave the trust as is, uncontested because the parents knew what they were doing by setting up a trust.

At times, parents try to make an estate plan by placing the names of their children on accounts. However, difficulties may arise from this when there are different amounts, children withdraw amounts while you are alive, and there may be a complete lack of control. Controlling the payouts of accounts is also a smart idea. You can transfer assets to your trust and control the amount given to beneficiaries. By creating an estate plan, you can ensure that your assets will go to whom you want, when you want, the way you want.

To learn more about this article, visit Protecting your Future: Squabbling children after the parents die.

Continue reading " Trusts can be Better than a Will " »

Well you may have heard yesterday that the “Super Committee” failed to reach an agreement on how to come up with 1.5 Trillion Dollars over the next ten years to reduce the nation’s debt. The “Super Committee” was formed earlier this year when Congress passed the spending bill to prevent the government shut down. Their mandate was to have a way to save money by November 23rd and then Congress had until December 23rd to pass a bill to enact the committee's recommendations.

It had been heavily rumored that the estate and gift taxes may be affected and lowered back to their 2009 levels. In fact, I had expected them to announce such a change this week. However, it was announced yesterday that they bipartisan group could not agree on how to cut spending or raise taxes in order to get to the 1.5 Trillion Dollar mark.

Although the “Super Committee” could not agree on how to come up with the numbers, they did state that they would pass onto Congress what progress they had made so far. Congress, under the spending bill’s mandate, has until December 23rd to pass a law to come up with the 1.5 Trillion Dollars. This means although the “Super Committee” failed, Congress still has the ability to act. This story is far from over…

Continue reading " "Super Committee" not so super " »

Many people wonder what happens to debt after death – not just their own debt, but those of their relatives as well. Will someone else be responsible for paying your debts after you die? And if you are the beneficiary of a parent or spouse’s estate, are you responsible for their debts?

Because debt collectors have become increasingly aggressive and intrusive in recent years, the Federal Trade Commission published a consumer alert last year that advises consumers of their rights regarding the debts of a deceased relative. The FTC has stated that a surviving relative usually has no legal obligation to pay the debts of a deceased family member.

The exception may be in the case of a spouse who co-signed a loan, but even then, a collection agency must go through the probate process to collect the debt. Florida is not a community property state, so debts that were not jointly incurred belong only to the person who incurred them. If that person dies, the debts generally go uncollected. And under Florida’s Tenancy by the Entirety, a married couple’s jointly held property is exempt from creditor action if only one spouse was responsible for the debt.

Continue reading " Debts After Death: Who Pays for Debts of a Decedent under Florida Law? " »

I am asked a lot by potential clients "what types of assets need to be probated?" To answer that question, I will first discuss the three different ways you can own an asset.

First, you may own an asset in your individual name. However, upon your death, the asset will have to go through probate unless it has a beneficiary designation, transfer on death designation or payable on death designation attached to it. Example of these types of assets are checking accounts, savings accounts and brokerage accounts.

Secondly, you may own an asset jointly with rights of survivorship. This means upon the death of one owner, the asset passes to the survivor - "the survivor wins". However, the survivor then will have to have the asset probated upon their death to pass it onto their heirs.

Lastly, you may own the asset as title by contract. Examples of this are life insurance policies and retirement plans. These assets pass according to the contract you have with the company you bought the asset from. WARNING: the asset may still go through probate if you list your estate as the beneficiary or have no beneficiary listed at all. Make sure to periodically review the beneficiary designation as it may be the wrong one listed.

Continue reading " What types of assets have to be probated in Florida? " »

The state of Florida offers a probate shortcut for small estates that makes it easier for heirs to transfer assets or property left to them by someone who has died.

To use Florida’s simplified probate process for small estates, an executor – the person designated in a will to handle a decedent’s property -- must file a written request with the local probate court requesting to use the simplified system. If granted, the executor will then be able to distribute the assets without having to go through the regular probate process.

There are two ways a Florida resident can use the simplified probate process:

1. If there is no real estate, and no creditor claim on any assets except any amount due to satisfy funeral or medical expenses (limited to the last two months).

2. If the value of the entire estate, after satisfying any creditor claims, is equal to or less than $75,000, OR if the decedent has been dead for more than two years.

Continue reading " Florida Summary Probate System " »

The prevalence of blended families has led to an increase in the number of wills that are contested each year in Florida probate courts, especially since Florida law does not recognize a no-contest clause in a will as anything more than a statement of intent.

A Florida will can be contested if:

The testator – the person making the will – lacked testamentary capacity at the time the will was made. A testator must understand what his or her assets are, and know the people who will be receiving them. A Florida will may be voided if it has been made by someone who is mentally incompetent or who has had his or her capacity impaired by dementia, illness or medication.

Undue influence was involved. This can occur when a testator is coerced through improper pressure or threat to execute or revise a will, usually to the benefit of the person or persons bringing the pressure to bear. This usually happens when an elderly testator is ill or suffers a decline in mental capacity, which causes them to be unduly influenced by the purpose of another.

It was executed improperly. A valid will must be signed by the testator and witnessed by two other people, and cannot be executed by fraud or under duress.

Some states allow what is called a "no contest clause" which means if you attempt to contest the estate planning document, you lose your share of the estate given to you in the estate plan. However, under Florida Statute 732.517, those clauses are unenforceable within a Will.

Continue reading " Reasons for Contesting a Florida Will " »

Of all the things you wish to leave your heirs, the expense and hassle of going through probate in Florida is probably not on that list. Nor should it be. There are ways you can ensure your estate passes directly to whomever you wish without having to go to Florida probate court.

Living Trusts. You can create a living trust to give away virtually anything you own – real estate, cars, boats, artwork, jewelry, even bank accounts. But this is not a do-it-yourself project. Meet with a Florida estate planning attorney, who can explain the steps to setting up a living trust, choosing a successor trustee and titling your assets over to that trust. You’re still in control, but your heirs avoid probate.

Joint Ownership. Any property you own with someone else that provides for right of survivorship automatically passes that property on to the other person once you die with no need for probate. If you own property with someone through joint tenancy, you must be sure each of you owns an equal share for it to pass on without probate.

Transfers-on-Death. Any securities you own – stocks, bonds, brokerage accounts – may pass to a beneficiary if you register those securities as transfer-on-death. You must fill out a beneficiary form, then the person you name as beneficiary can claim the accounts upon your death without probate.

Payable-on-Death. You can add a payable-in-death designation to bank accounts and CDs and your beneficiary will be able to claim the money from the bank upon your death without going through the probate process.

Continue reading " How to Avoid Probate in Florida " »

A resident alien or non-resident alien has the same rights as a U.S. citizen when it comes to their inheritance rights under the Florida Probate Code. Section 732.1101 states “Aliens shall have the same rights of inheritance as citizens.”

Continue reading " How Are the Estates of Aliens (Non-Citizens) Handled Under Florida Law in an Intestate Estate? " »

Escheat literally means to return to the lord. In the probate context, it happens when property and/or an estate is transferred to the government because a person has died without a will and/or without an heir to his or her estate. When this happens, the property is turned over to the State of Florida to be deposited in the State School Fund. Make sure you plan correctly to ensure that your property will not be taken by the state.

Continue reading " What Does the Term "Escheat" Mean Under Florida's Probate Laws? " »

Dower and curtesy have both been abolished in Florida under Statute 732.111.

Dower is a common law that entitles a widow to a portion of her husband's estate in absence of a last will and testament. The provision of dower allows the wife to provide for herself and any children born during the marriage. In most circumstances, the widow is granted up to one-third interest in her husband's assets. Curtesy is the husband's right in his wife's estate.

However, Florida still provides for the surviving spouse and family in several ways. One way is that the surviving spouse has an "elective share". It is not automatic though, the surviving spouse must elect to take their share. Florida also provides for the family allowance. Both of these concepts will be explained further later.

Continue reading " How Does Florida Law Address the Concepts of Dower and Curtesy in an Intestate Estate? " »

Someone who is of “half blood” shall inherit only half as much as a “whole blood” heir. If by chance all the heirs are of “half blood”, then all “half blood” heirs shall inherit as if they were a “whole blood” heir.
An adopted child is treated as a “whole blood” of the decedent as if the adopted child was a natural born child of the decedent.

Continue reading " How Does Florida Law Deal with Children Who are "Half Blood" versus "Whole Blood" to the Decedent or an Adopted Child of the Decedent in an Intestate Estate in the State of Florida? " »

The rights vary from the mother and father. A child born out of wedlock is treated as the child of the mother for all intestacy distributions. However, the child born out of wedlock is treated as the child of the father only if:
1. The natural parents participated in a marriage ceremony before or after the birth of the child, even though the marriage was void;
2. The paternity of the father is established by an adjudication before or after his death; or
3. The paternity of the father is acknowledged in writing by the father.

Continue reading " What Are the Rights of Persons (Children) Born Out of Wedlock in an Intestate Estate in the State of Florida? " »