Florida Estate Planning Process

Estate planning in Florida is a process that involves a variety of tools to manage your property and to provide for the smooth distribution of your assets and care of loved ones with minimal tax consequences and costs.

Making a Will

A will is an instrument that provides for the distribution of your property outright upon your death or which may establish trusts. Without a will, you are considered to have died intestate. In that case, the state will appoint an administrator and distribute your assets according to Florida’s succession law in a manner which may not be as you intended. The process can invite unwanted tax consequences and lead to family disputes.

A will should include the following:

  • Property distribution
  • Provisons for children including a guardian
  • Executor of the estate

Plan for your funeral, health considerations, and take an inventory of your valuable possessions and how you wish to distribute them.

Avoiding Probate

Probate is the legal process that determines the validity of a will, settles all claims on the estate, figures tax liabiities, sells property to pay creditors, and distributes the remaining assets to legitimate heirs. In Florida, probate lasts from six to eight months in most cases, but there are many variables that can lengthen the time. Probate may not be avoided completely in some cases, especially in large estates, but there are ways to dispose of assets while you are still living.

Living trusts

These instruments transfer title to certain assets into a trust. They allow you, as trustee, to control your assets and to name a successor trustee to manage the trust on your incapacity or passing. The named beneficiaries receive the benefits of the trust after your demise.

Joint ownership

Joint ownership of property with a right of survivorship allows title to automatically pass to the surviving joint owner on your death.

Accounts with designated beneficiaries

Any property with a title may have designated beneficiaries. Examples include bank accounts, real property, cars, and retirement accounts like an IRA. A beneficiary may stretch the distributions of your account over a period of years to minimize tax consequences. Florida has a small estate exemption of $75,000 allowing for a summary administration if there is a will. If the decedent has been dead for more than two years, estates valued at more than $75,000 may be exempt from probate as well.

Durable Power of Attorney

This is a legal document that delegates the handling of your affairs once you become incapacitated. In Florida, it must take effect immediately, and the appointed agent remains in power should you become mentally incapacitated.

Living Will

Also known as a health care directive, a living will is a document that sets forth your wishes regarding life-prolonging health measures and other treatments if you become incapacitated.

Power of Attorney for Health Care

Consider a health care power of attorney to appoint someone to make health care decisions for you if you cannot make them for yourself.

Additional Considerations

Most individuals should have at least some of the above plans for distributing their estates, but there are other considerations:

  • Estate taxes: Only very large estates valued at $5.25 million for 2013 are subject to estate taxes.
  • Life Insurance: If purchased early in your working life, life insurance can be very inexpensive and provide a valuable financial cushion for your children or spouse. If you have other sources of benefits like a pension, group life insurance or large IRA, it may be an unneeded expense.
  • Business Succession: Any business should have a prearranged method of distributing the business interests on your death or even retirement to ensure its smooth transfer to a partner. Creating corporations or family limited partnerships may enable the smooth transfer to children or to issue stock to minimize taxes.

Consult an Estate Planning Attorney

State and federal estate laws are complicated and subject to frequent changes. Consult a Florida estate planning attorney to ensure your assets are protected and that tax consequences are minimized.

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