Estate planning means creating a plan, while you are alive, regarding the transfer of your property at your death. An advanced estate plan will include a combination of a Will, a Trust and a number of Healthcare Directives customized to meet the needs of your family and reflect your ultimate desires as to how, when, and to whom your property should go to at your death.

Everyone has an estate. Your estate is made up of everything you own including, but not limited to, any and all of your personal possessions, your house, your car, your bank accounts, your investment accounts, your retirement accounts, real estate, a business – anything you may have an ownership interest in even if shared with another person. The value of your estate does not matter, in fact we always say that the less you have, the more important it is to preserve it from the pitfalls of not doing an estate plan.

If you die without an estate plan your assets will have to go through probate. Probate is a court-supervised process responsible for distributing your assets, paying your taxes, paying your claims and expenses, creditors, and if there’s anything left over, looking to Florida’s intestacy laws to determine who your heirs should be. In other words, if your choice of heir(s) does not align with the heirs recognized by Florida’s intestacy laws, unless you have memorialized your choice of heir in writing through an estate plan, your property will not go to your choice of beneficiary.

A revocable trust (RT) is a legal document that you create while you are alive for the benefit of whomever you intend to take care of after you pass. The genius of a RT is that it allows you to control exactly how and when your beneficiaries get to access their inheritance. In other words, your RT will specify at what age or stage your child or other beneficiary should receive money. It can condition their receipt of money on certain events like graduating from college, obtaining a post graduate degree, whatever milestones you always intended your children to reach. We all want our children to be successful and self-sufficient and a RT incentivizes them to be so. You never want a child, especially a non-adult child to inherit everything outright at once. A RT essentially allows you to retain control even beyond your grave. It also avoids probate, unlike a Will. Read below why avoiding probate is so important.

Probate is public- it opens your estate and the state of your finances to the public. This means creditors will be put on notice of your passing and can now make a claim to collect any unpaid debts, thereby reducing the value of your estate intended for your beneficiaries. It also invites scrutiny from anyone else wanting to make a claim against your estate such as a disgruntled family member. On the other hand, an advanced trust-based estate plan keeps the affair of the distribution of your assets is private.

Probate is costly- the state of Florida does not handle the distribution of your property for free, there are court costs, attorney’s fees, all averaging up to an estimated 5% of the value of your estate. The fees can be much higher if the estate is complicated or disputed.

Probate causes delay- it’s not uncommon for probate to take at least a year. Multiple court hearings may be required and in the mean time your assets are frozen by the court and your beneficiaries cannot immediately benefit from what you left behind for them. This delay can have the obvious consequences of causing major disruptions to the lives of your beneficiaries if they are depending on your estate to continue their same quality of life.

A will is a writing, that if validly executed following the requirements of Florida law, can serve to designate a personal representative, name your desired beneficiaries to receive your property at death, name a guardian for any minor children at your death, and memorialize other planning such as burial and/or cremation requests. A Will does not, on its own, avoid probate. With regards to probate, the persons named in your Will as personal representative and beneficiaries will control over the automatic provisions provided for under Florida intestacy laws, but your assets will still be subject to the probate court proceedings. As a result, a Will is undoubtedly a cornerstone of an estate plan, however an advanced estate plan for the purpose of avoiding probate will involve some form of Trust planning.

Advance Directives control specifically which person(s) you desire to be appointed to handle your medical decisions, view your medical records, and who will be authorized to make financial transactions on your behalf in the event you become incapacitated. In the absence of these pre planning documents, the court will appoint someone on your behalf- generally someone with no relation to you who does not know anything about your family or your wishes. A guardianship will be established on your behalf which will manage your assets and control the disbursement of funds for your care, which can overall become costly and at times difficult to overcome even if you regain capacity.

The top 7 seven reasons that trigger a review and/or potential update to a family estate plan include, but are not limited to: 

(1) A marriage or divorce involving yourself or a beneficiary;

(2) A birth in your family or death of a beneficiary, representative, agent or a key person named in your documents;

(3) An inheritance;

(4) A relocation, specifically a move to a different state;

(5) A change in the way you wish your property to be distributed;

(6) A significant change in your personal wealth or financial status;

(7) A significant change in the laws regarding income, estate and gift taxes or property transfer, trusts and probate.

In the absence of advanced planning directing who should assume the care of your minor child(ren) in the event you become incapacitated or die, your child(ren) will be at the mercy of the Florida court system. Through estate planning, you can and should appoint a prospective guardian for your minor child(ren). There are several methods to do this such as through a testamentary instrument like a Will or by a declaration. The former only applies if you pass, but the latter protects your children if you become incapacitated. Florida law does establish some limitations as to who you can name as your prospective guardian such as disallowing convicted felons, restricting appointments to residency rules, as well as other conditions. Consult an attorney today to do some advanced guardianship planning and to ensure its validly drafted pursuant to Florida requirements and filed in the appropriate court.

Generally speaking a Will that is validly executed in the originating state will be recognized by another state. However, Wills and the probating of Wills is governed by state law. Every state has different requirements, which may have implications on your out of state Will. For example, many states like Florida, require that the personal representative named in your Will be a resident of the state in which you are residing. You can see how this would create an issue if you move. With that said, a review by an attorney local to the state you relocate to is always recommended. It might just require a simple amendment to ensure its valid.