Which estate planning documents should I have?
Everyone’s situation is a little bit different, so the answer to that question isn’t immediately clear. It’s never too late to start preparing for your future. The reality is that many people do not plan for the day that they will leave this Earth. What follows can turn into a legal nightmare for an individual’s relatives, heirs, or beneficiaries. Even if you want all of your assets to pass to your spouse or children, it’s a good idea to have a last will & testament, at a minimum. For individuals who want to maintain more control of the distribution of their assets, you might consider a revocable living trust. There are number of documents available to you to effectuate the seamless transfer of your assets and also to carry out your personal wishes. Let’s have a discussion and determine which estate documents will serve your interests and simplify the responsibilities of your estate.
The answer really depends on what types of estate planning document you have in place and what types of assets you own at the time of death. A popular misconception that I have heard from a number of clients that I have consulted with is that by having a last will and testament, an individual can avoid probate. This is mostly entirely untrue because if the decedent had a valid last will and testament, the assets they possessed at the time of death will determine whether probate is necessary or not.
An overwhelming majority of financial assets are not subject to probate. The reason is because most financial assets provide the ability to designate a transfer on death (TOD) beneficiary or payable on death (POD) beneficiary. When a beneficiary is designated on such financial assets, the financial institution servicing or controlling the asset knows whom to pay the asset to after the death of the account holder or asset owner. This generally applies to life insurance policies, securities, 401k plans, IRAs, as well as a number of other financial instruments. So long as a beneficiary is designated, these assets will not be subject to a probate administration. Individuals who do not own real estate can easily avoid probate without any kind of sophisticated estate planning.
Absent proper estate planning the answer is likely “yes.” If an individual owns real property (real estate), the estate will almost invariably require probate. This is to ensure that legal title to the real property is properly transferred to the beneficiaries or the rightful heirs of the decedent. Simply having a valid last will & testament is not the answer to avoiding probate. To repeat, if the decedent had a valid will but owned real property, probate will likely be necessary. I say likely because the exception here is if the decedent held ownership of the real property as tenants by the entirety (as spouses) or as joint tenants with rights of survivorship. If the property ownership was represented in the foregoing manner then, by operation of law, the surviving tenant(s) would inherit the deceased tenant’s interest in the property.
Most individuals who own real property and want their estate to avoid a probate administration will have a living trust (revocable living trust) prepared by a competent estate planning attorney. They may also choose to execute a life estate deed or ladybird deed as a substitute for a trust. However, there are additional benefits to the living trust other than probate avoidance. For example, a settlor (you) of a living trust can require that a specific beneficiary’s distribution remain in trust for a designated amount of time, until the beneficiary reaches a certain age, or until a specific condition is met (i.e. until the beneficiary graduates college). A living trust, which is a private agreement that does not require filing, also ensures that the settlor’s personal affairs do not become public record. In terms of cost, a living trust usually costs more up front than a last will & testament, but can save the estate significant expense in the long run and give the beneficiaries immediate access to the assets without delay.
If you are the executor (also known as personal representative) of a person’s estate, who resided in the State of Florida or owned real property in Florida, you might be wondering what you need to do next. The short answer is that you should speak to a Florida probate attorney for some guidance because, in most cases, you will need to probate the estate of the decedent (the deceased individual). Florida requires legal counsel when there is more than one beneficiary of the estate. Most non-attorneys do not know how to navigate through the Florida court procedures, nor put together all of the legal documentation to distribute a decedent’s assets, wherever situated. Not to mention, if the Florida probate estate is contested in any capacity, the person (or organization) contesting the estate will likely be represented by counsel.
If you are the successor trustee of a person’s trust, which was created in or governed by Florida law, you should speak to a Florida trust attorney (or probate attorney) for some guidance before making an distributions. Trustees have fiduciary obligations to the beneficiaries named in a trust and violations of those duties do not come without consequence. While living trusts (also known as revocable trusts) are often privately administered and not filed in the public record, you will likely need the assistance of a qualified professional to make sure you haven’t overlooked or misinterpreted anything written in the Trust Agreement. It is also common for a trust attorney (or probate attorney) to initiate a probate proceeding contemporaneously with the administration of a trust when the settlor of the trust is deceased.
If you find yourself in any of the aforementioned situations, contact us today so that we can assist you with the process and simplify what has the potential to be a burdensome responsibility.
This content is for informational purposes only and not for the purpose of providing legal advice, nor does it create any attorney-client relationship. You should always contact an attorney to obtain advice with respect to your particular issue, problem, or set of facts.