ESTATE

 

We can help with the administration of an estate after a relative has died, and we can help you to prepare your own estate by setting up a plan to distribute your estate after death. 

With proper planning, the distribution of a person's estate can be accomplished with fewer costs and complications. 

Two of the most common tools used in estate planning are wills and trusts. Both of these legal devices are discussed in this chapter, as well as other issues a person should consider when planning his or her estate.

WILLS & TRUSTS

WILLS

A will is a written document specifying how and in what manner a person's estate is to be distributed after his or her death. A person making a will is known as a testator. Anyone designated to receive property under a will is called a beneficiary. A will can be simple or elaborate, depending on the size of the estate and the wishes of the person making the will. A will can designate who receives artwork, jewelry, cars, real estate or any other property. A will can name a guardian to take care of minor children if there is no surviving parent and can disinherit a child if the testator does not want the child to receive any part of the estate. A will can also create a trust, make gifts to charity or authorize the selling of real estate without court proceedings.

LIVING WILLS

A living will does not involve the distribution of property. Instead, a living will is a written document specifying what medical procedures should be taken to prolong a person's life in the event that he or she is incapacitated. A living will must be signed in the presence of two witnesses, one of whom is neither a spouse nor blood relative. If a person is physically unable to sign his or her own living will, one of the witnesses may sign for the person at his or her direction.

TRUSTS

A trust is an arrangement wherein one person (the trustee) manages and holds legal title to property owned by another (the settler or grantor) for the benefit of a third party or parties (the beneficiary). For example, Person A gives $100,000 to Person B to hold in an interest-bearing account for 10 years (a trust). After 10 years, Person B would pay Person A the full $100,000.00 from the trust plus the interest the account accrued and the trust would then be dissolved.

There are many different kinds of trusts, each with its own particular characteristics, for example, testamentary trusts are trusts created by a person's will and take effect after his or her death. One of the reasons a person creates a testamentary trust is to control how trust property is given to the beneficiary. For example, the beneficiary may be a minor at the time of the settler's death. Rather than receiving all of the inheritance immediately, a trust would insure that a trustee hold and manage the inheritance until the beneficiary is 21 (or whatever age the settler decides) and presumably responsible enough to handle the funds properly. Testamentary trusts are created after the settlor's death, and the trust property is subject to probate.

Living trusts, also known as inter vivos trusts, are trusts created during a person's lifetime. The fact that living trusts are created before a person dies gives them particular benefits unavailable to testamentary trusts. One principal benefit is that the property included in a living trust is not subject to probate should the settlor die. Since the trust is created before the settler's death and the trust property is already transferred to the trustee, the trust property is not considered part of the settler's estate, and therefore avoids the costs, complications and taxes of the probate process. If a living trust includes all of a person's property, a will may be unnecessary, and the person's beneficiaries may be able to avoid probate altogether.

Another benefit of a living trust is that it can be used to protect the trust property in the event of the settlor's mental incapacity. For example, if a person becomes confused or otherwise mentally incapacitated, he or she may make unwise purchases or sign over property to unscrupulous individuals. If the property is held by a trustee in a revocable trust, the trustee could petition the appropriate court to refuse the purchase or property transfer, thereby protecting the property. Living trusts which are irrevocable have the added benefit of receiving certain income and estate tax savings.

The principal disadvantage of a living trust is that the settler no longer has full control over the property put into the trust, unlike the property in a testamentary trust, which is under the unrestricted control of the settler.

PROBATE

 

Probate is a court-supervised process governing the final disposition of a person's estate after death. Florida law provides a Formal Administration process for larger and more complicated estates, as well as Family Administration and Summary Administration for smaller estates.

Formal Administration can take years to complete, particularly if there is litigation involved. Family and Summary Administrations may last five to six months, depending on the issues involved.

Florida's circuit court has jurisdiction over probate matters. If a person dies with a will, the court will determine whether the will is valid; then the personal representative designated by the testator will take over administration of the estate. 

If a person dies without a will, the court will appoint an administrator to dispose of the estate according to Florida's intestate laws after all taxes and expenses have been paid and claims settled.  Personal representatives and court-designated administrators, as well as any other individuals involved in the disposition of an estate (e.g., accountants, lawyers) are entitled to reasonable compensation for their efforts. 

How much compensation is reasonable may be determined by the will, by a contract between the personal representative and the decedent, by an agreement between the personal representative and the persons bearing the impact of the fee, by Florida law or by the probate judge.


DEATH TAXES

Unlike a number of other states, Florida has no state inheritance tax (a tax paid by those receiving property from a decedent's estate) or state estate tax (a tax paid by the decedent's estate for the privilege of transferring property). 

Therefore, the only death taxes that Florida residents have to pay are federal estate, gift (if applicable) and income taxes. The personal representative or court administrator is responsible for filing the requisite tax returns.


INHERITANCE LITIGATION

Florida's substantial population of senior citizens has made it one of the nation's centers for disputes over wills and trusts. These disputes take the form of will and trust contests, and civil actions brought by familie members seeking damages for third party interference, such as when a family claims an outside person exploited or took advantage of a loved one.

A person can raise both procedural and substantive objections to a will or a trust. A procedural objection to a will could occur when the testator did not sign the will in the presence of two competent witnesses or otherwise failed to follow the execution procedure required by Florida law. If a court determines that a will was not properly executed, the will is invalid.
Substantive objections involve the testator's (or settlor's, in the case of trusts) intent and capacity to create a will. 

For example, a beneficiary might object that, at the time of the will's execution, the testator lacked the mental capacity to make a will or was subject to some undue influence, such as from a third party. A beneficiary could also claim the will was a product of fraud and the testator a victim of deceit.   If a probate court determines that a testator lacked the required intent or capacity, the will (or portions of it) is deemed invalid and the testator's estate subject to distribution through intestacy.

Court proceedings in a will or trust contest generally require expert medical testimony and factual testimony by the lawyer who supervised the execution of the document and by the relatives, neighbors and friends of the person making the will or trust.