top of page
  • Writer's pictureErik Arroyo

Comprehensive Guide to Florida Estate Planning

Updated: Apr 9, 2023

Table of Contents

  1. Introduction to Florida Estate Planning

  2. Florida Estate Planning Essentials

  3. Wills in Florida

    • Updating Your Will

    • Intestate Succession


4. Florida Trusts

  • Revocable Living Trusts

  • Irrevocable Trusts

  • Special Needs Trusts

  • Charitable Trusts


5. Durable Power of Attorney and Health Care Surrogate

6. Florida Probate Process

  • Filing a Petition

  • Notice to Creditors

  • Inventory and Appraisal

  • Paying Debts and Expenses

  • Distribution of Assets


7. Estate Taxes in Florida

  • Federal Estate Tax

  • Gift Tax


8. Asset Protection Strategies

  • Homestead Exemption

  • Tenancy by the Entirety

  • Annuities and Life Insurance

  • Limited Liability Companies


9. Choosing an Estate Planning Attorney

10. Conclusion


Introduction to Florida Estate Planning

Estate planning is a vital aspect of financial management for individuals and families. In Florida, residents can use various legal tools to protect their assets and ensure the well-being of their loved ones. This comprehensive guide will discuss the essential components of Florida estate planning, including wills, trusts, durable power of attorney, health care surrogate, the probate process, and strategies for asset protection.


Florida Estate Planning Essentials

To create a robust estate plan in Florida, you should consider the following elements:

  • Wills

  • Trusts

  • Durable Power of Attorney

  • Health Care Surrogate

  • Probate Process

  • Estate Taxes

  • Asset Protection Strategies

Each of these components serves a unique purpose in protecting your assets and ensuring your wishes are carried out.


Wills in Florida


A will is a legal document that outlines your wishes for the distribution of your assets after your death. In Florida, a valid will must meet the following requirements:

  • The testator (person creating the will) must be at least 18 years old and of sound mind.

  • The will must be in writing (typed or handwritten).

  • The testator must sign the will in the presence of two witnesses.

  • Both witnesses must also sign the will.

Updating Your Will


It is essential to update your will regularly, especially after significant life events such as marriage, divorce, or the birth of a child. In Florida, you can modify your will by creating a codicil (an amendment) or drafting a new will.


Intestate Succession

If you pass away without a valid will, your estate will be distributed according to Florida's intestate succession laws. These laws determine the order in which your relatives inherit your assets, typically starting with your spouse and children, followed by more distant relatives if you have no surviving spouse or children.


Florida Trusts


Trusts are legal entities that hold assets for the benefit of designated beneficiaries. They can help you avoid probate, protect your assets, and provide for your loved ones. Some common types of trusts in Florida include:

  • Revocable Living Trusts

  • Irrevocable Trusts

  • Special Needs Trusts

  • Charitable Trusts

Revocable Living Trusts

A revocable living trust is a flexible estate planning tool that allows you to retain control over your assets during your lifetime. You can change, modify, or revoke the trust at any time. Upon your death, the assets in the trust are distributed to your beneficiaries, bypassing the probate process.

Irrevocable Trusts

Unlike revocable living trusts, irrevocable trusts cannot be changed or revoked once established. They offer more robust asset protection and potential tax benefits but require you to relinquish control over the assets placed in the trust.

Special Needs Trusts

A special needs trust is designed to provide financial support to a person with disabilities without jeopardizing their eligibility for government benefits such as Supplemental Security Income (SSI) and Medicaid. The trust's assets can be used for the beneficiary's supplemental needs, including education, medical expenses, and personal care.

Charitable Trusts

A charitable trust is a trust that benefits a charitable organization, either exclusively or in combination with non-charitable beneficiaries. Charitable trusts can offer tax benefits and help you achieve your philanthropic goals.


Durable Power of Attorney and Health Care Surrogate


A durable power of attorney is a legal document that allows you to appoint an agent (also known as an attorney-in-fact) to manage your financial affairs if you become incapacitated. In Florida, a durable power of attorney becomes effective immediately upon signing or upon a specific triggering event.

A health care surrogate, on the other hand, is a document that appoints an individual to make medical decisions on your behalf if you are unable to do so. In Florida, you can also include a living will as part of your health care surrogate, which outlines your preferences for end-of-life care.


Florida Probate Process


Probate is the court-supervised process of administering a deceased person's estate. In Florida, probate is generally required unless the deceased person's assets are held in a trust or pass directly to beneficiaries via joint ownership or beneficiary designations. The probate process in Florida includes the following steps:

  1. Filing a Petition: The process begins when the executor (named in the will) or a family member files a petition with the appropriate Florida probate court.

  2. Notice to Creditors: The court requires notice to be given to creditors, allowing them a specific period to file claims against the estate.

  3. Inventory and Appraisal: The executor must create an inventory of the estate's assets and arrange for a professional appraisal if necessary.

  4. Paying Debts and Expenses: The executor uses estate assets to pay valid debts, taxes, and administration expenses.

  5. Distribution of Assets: After debts and expenses are paid, the remaining assets are distributed to the beneficiaries according to the will or Florida's intestacy laws if there is no will.

Estate Taxes in Florida

Florida does not have a state estate or inheritance tax. However, larger estates may be subject to federal estate taxes.


Federal Estate Tax

The federal estate tax is levied on the transfer of a decedent's assets to their beneficiaries. The tax is calculated based on the net value of the estate, which includes real estate, personal property, investments, and other assets, minus any allowable deductions, such as funeral expenses and charitable contributions.

Gift Tax

The federal gift tax applies to the transfer of assets during your lifetime. As of 2021, individuals can gift up to $15,000 per recipient per year without incurring gift tax, and couples can gift up to $30,000 per recipient. Any gifts exceeding these annual exclusions count towards the lifetime gift tax exemption, which is the same as the federal estate tax exemption.

Asset Protection Strategies


Asset protection is an essential aspect of estate planning, as it helps safeguard your wealth from creditors, lawsuits, and other threats. In Florida, several strategies can help protect your assets:


Homestead Exemption

Florida's homestead exemption protects your primary residence from forced sale by creditors, with some exceptions, such as mortgage debt and property taxes. The exemption applies to an unlimited amount of value, provided the property does not exceed half an acre within a municipality or 160 acres outside a municipality.


Tenancy by the Entirety

Tenancy by the entirety is a form of joint ownership available to married couples in Florida. Assets held as tenants by the entirety are protected from creditors of one spouse, as long as the debt is not jointly owed by both spouses.


Annuities and Life Insurance

In Florida, the cash value of life insurance policies and annuity contracts is exempt from creditor claims, provided the beneficiary is a spouse, child, or other dependent relative.


Limited Liability Companies

Establishing a limited liability company (LLC) can help protect your business assets from personal liability. In Florida, an LLC offers protection from creditors under certain conditions, such as when the debtor is a member or manager of the LLC but does not have sole control over its assets.


Choosing an Estate Planning Attorney


Selecting the right estate planning attorney is crucial to ensuring your assets are protected and your wishes are carried out. When looking for an attorney, consider the following factors:

  1. Experience: Look for an attorney with experience in estate planning and a deep understanding of Florida's laws and regulations.

  2. Reputation: Research online reviews and ask for recommendations from friends, family, or colleagues to find a reputable attorney.

  3. Communication: Choose an attorney who communicates clearly and effectively and is responsive to your questions and concerns.

  4. Fees: Understand the attorney's fee structure, and make sure it aligns with your budget and expectations.

Conclusion


Estate planning in Florida involves various legal tools and processes, including wills, trusts, durable power of attorney, health care surrogate, navigating the probate process, and implementing asset protection strategies. By understanding these components and working with experienced professionals, you can create a comprehensive estate plan to protect your assets and ensure your wishes are carried out.


graph LR A[Florida Estate Planning] --> B[Wills] A --> C[Trusts] A --> D[Durable Power of Attorney] A --> E[Health Care Surrogate] A --> F[Probate Process] A --> G[Estate Taxes] A --> H[Asset Protection Strategies] A --> I[Choosing an Estate Planning Attorney] C --> J[Revocable Living Trusts] C --> K[Irrevocable Trusts] C --> L[Special Needs


12 views0 comments

Comments


bottom of page