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Miami Estate Planning Law Blog

Dividing tangible items in an estate

One challenge that families in Florida may face after the death of a loved one is dividing tangible items within an estate. These are items that are often unique and may not be easily sold. Some may only have sentimental value, such as photo albums. Many families deal with this by taking turns selecting items, but another family had a unique solution.

Two siblings, the executors, made a list of 742 items. This included their mother's car, a piano, games, cutlery, rugs and more. The list was sent to the other siblings, who all circled the items they wanted. Any unwanted items were set aside to be sold. The siblings then received a list of items they wanted that another sibling did as well. They were all given 500 imaginary poker chips to bargain with, and they were allowed to discuss with one another what they really wanted. In some cases, siblings bid for similar items but only wanted one.

Complications may arise from do-it-yourself wills

Some Florida residents may think about how they want to provide for their loved ones after they die. There are a number of estate planning options that may help in this regard, including wills, trusts, and powers of attorney. Some people may opt for a do-it-yourself option, downloading pre-printed forms and filling in the blanks in order to create a will. These may be valid, but there are other concerns that may arise.

In one case that reached the Florida Supreme Court, a woman wrote her will on a pre-printed form, listing out her items of property and the details for her bank accounts. She left her assets to her sister and then her brother, if her sister predeceased her. Wills should, generally, contain a provision to include all assets that are not specifically mentioned elsewhere, called a residuary clause. This makes sure that any items that were not specifically named will still be distributed according to the person's wishes. However, in this case, the woman's form did not include a residuary clause, meaning that only the items specifically described were covered.

Conservatorships may benefit physically, mentally disabled

Florida families with an adult member who is unable to take care of himself or herself may wonder if a person can be designated to handle their affairs. Conservatorships are often the perfect solution in these cases. In a conservatorship, a conservator is designated to make decisions and care for the conservatee.

A conservatorship is typically set up through an estate planning attorney through the probate court. It may benefit an elderly family member with dementia or an adult child that has a mental or physical disability. Setting up a conservatorship can give family members peace of mind. Several different types of conservatorships can be designated through a state's probate court depending on the needs of the loved one.

Using trusts to protect assets in an estate plan

A trust protector can play an important role in keeping assets safe from threats such as lawsuits. Florida parents often use a trust protector when they create a living trust for a child and make the child the trustee. Placing assets in the trust can also protect them from a spouse. Often a sibling may be appointed as protector to step in if necessary.

Other strategies can also help protect assets from being seized or from estate tax. While the current estate tax exemption is about $11 million, that is due to sunset in 2026. It could drop much lower, so even people who currently think they do not have to worry about estate tax may need to revise their plan in the future. A spousal lifetime access trust removes the assets in it from the taxable estate but still leaves control with the couple. For greater protection, an asset protection trust places control with an outside trustee.

Common estate planning errors to avoid

One of the biggest estate planning error a person can make is not having a will or having one that is from out of state. The latter issue could affect people in Florida if they have moved there from a different state to retire and have not updated their will. Even if the will was made in-state, it needs to be reviewed and potentially updated periodically.

An out-of-state will could either slow down the process of probate or could result in the will being declared completely invalid. Without a will, the person is said to have died intestate, and the estate still has to go through the probate process. People may hesitate to pay an attorney to help in creating an estate plan, but this helps ensure that loved ones have fewer headaches after a person's death.

Using a trust for a 529 plan

Many estate owners in Florida have 529 savings accounts that are used to put away money for the education of their children or grandchildren. Some may wonder if they should create a trust to hold such an account.

In most cases, this is not needed. If the creator wants the account to pass to the intended person and not got through probate, that intended person can be named as the beneficiary. The original creator of the 529 remains the owner.

Guardianship bills to protect incapacitated people moves ahead

The Florida state legislature may soon be passing a bill that regulates professional guardianships. The bills has had hearings in both the House and the Senate. The law would give the state more tools to hold guardians accountable and make it necessary for judges to approve do-not-resuscitate orders.

One of the bill's sponsors, Rep. Colleen Burton (R-Lakeland), said she saw the need for reform after a man choked to death when his caregiver had a do-not-resuscitate order placed without permission and removed his feeding tube. When testifying before the Justice Appropriations Subcommittee on Jan. 15, she said it would allow lawmakers to protect people who could not speak for themselves. Also testifying was a man who became a guardianship reform advocate after a 4 1/2 year battle to get his mother's guardian removed. The guardian was being paid $30,000 per month and was put in place despite the fact that his mother had set up a trust and prepared paperwork that appointed family members to manage her financial matters and her health care.

The importance of beneficiary designations in an estate plan

There are several ways that property can be passed to heirs as part of an estate plan. One way is by joint ownership, which is common with spouses or elderly parents and a child. Other assets may be passed according to instructions in a will. If there is no will, then Florida state law will be followed in determining what happens to assets.

Some assets, such as life insurance and retirement accounts, pass by beneficiary designation. It is important to ensure that these remain up-to-date. People may forget to update these even when reviewing the rest of the estate plan, and this can mean that assets pass to individuals despite an estranged relationship. It is also important that it is possible to locate the beneficiary designation and that a person's intentions are made clear.

How a trust differs from a will

People in Florida who are creating an estate plan might wonder about the difference between a will and a trust. One of the biggest differences is that a will is not private and generally must go through the probate process. A trust is private, and when a person dies, the property in it goes directly to beneficiaries without having to pass through probate.

A trust may be revocable or irrevocable. With a revocable trust, the creator can change or cancel the trust. An irrevocable trust cannot be changed. A revocable trust offers fewer protections than an irrevocable one. For example, for Medicaid purposes, property in a revocable trust is considered to still belong to the trust creator, also known as the grantor. This would not be the case with an irrevocable trust. However, a person could be both grantor and beneficiary of an irrevocable trust and might be paid a regular income from it.

Open communication important to estate planning

For people in Florida who want to make sure their loved ones are provided for after their death, estate planning can be an important topic of open conversation. Many people feel like they have no idea what happened with the assets of their loved ones after they passed away. This can be particularly important for people on second or later marriages, with both spouses bringing children of their own to the relationship. In many cases, the kids involved are adults, but people often intend to provide something for their grown children as well.

People who want to ensure their children receive their inheritance should communicate openly with their spouse and their kids about the fact that they have a will or trust and where the documents can be located. Without clear communication, people may have no idea where to find these important documents and begin the process of putting a loved one's final wishes into practice. Because wills can be changed by the creator at any time, some people may leave behind multiple documents that lead to a will contest in court.

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