To protect assets and health during life and facilitate a smooth transition of assets to loved ones after your death, an estate plan needs to address many different issues. This includes the laws of asset distribution in Florida, potential transfer taxes, and costs and strategies required to expedite and simplify
succession issues. A recent article from mondaq, “Four Questions To Ask Your Estate Planning Attorney,” explains key points to cover with your estate planning attorney.
How do assets pass after death? Asset distribution in Florida isn’t a simple issue. Some assets pass through the will, but not all. It depends upon where you live, where your assets are situated, what kind of assets they are and how they are titled. Florida state law governs how assets are conveyed after death, so consulting with an estate planning attorney is critical to creating a successful plan.
Since you do not live in a community property state, your property will not automatically pass to the surviving spouse. Not leaving a will may leave your spouse unprotected if your estate goes to probate, because they will not automatically receive half of your assets.
There may be rules in your area restricting asset transfers. Some states have forced heirship rule, which require a certain percentage of assets to be distributed to a spouse or children, while others have “elective share” rights for surviving spouses. This allows the spouse to elect to take a sizable portion of their deceased spouse’s assets (which still may not equal half, depending on the number of beneficiaries). Florida has elective share rights, but not heirship rule.
What legal documents make up an estate plan? There are two categories of estate planning documents: those used during your lifetime and those used after you die. During your lifetime, you’ll need a healthcare proxy to permit another person to make medical decisions for you. A Power of Attorney allows an agent to make financial and legal decisions on your behalf. Without these documents, your family may need to apply to the court for guardianship, which is an arduous process.
Everyone needs a will and/or trust to transfer assets after death. Lacking a legally enforceable document directing the disposition of assets, they will pass according to the laws of your jurisdiction, which may not follow your wishes. Using a trust to distribute assets combined with a “pour over will” is another approach to minimize court involvement. A pour-over will provides direction for any assets not already in a living trust to be placed into the trust when you die, thus removing assets from your probate estate and allowing them to be distributed according to the terms of the will. These two tools simplify asset distribution in Florida for most families.
What tax planning needs to be done? Federal, state, inheritance and income taxes vary by state and are subject to change. Consult with an estate planning attorney about what the tax rules are for you and how to accomplish goals in a tax-minded manner. For instance, right now (for 2024), the federal exemption for estate and gift taxes is $13.610 million per person, but this will be cut in half on January 1, 2026, so it may be wise for you to make gifts now. Some states have their own estate taxes, and a few have inheritance taxes, which apply to heirs regardless of where they live.
Have there been any recent changes to the law impacting my estate plan? Changes occur frequently on federal and state levels, making regular updates to estate plans critical to their effectiveness. Your estate plan may not reflect recent tax changes if it is over three to five years old. In addition to tax laws, other laws may significantly impact an estate plan. Regular meetings to review your estate plan with an experienced estate planning attorney could also prevent your will from being declared invalid by the court, when your estate will be treated as if there was no will and the state’s laws will determine how your assets are distributed.
Do you have more questions for a Florida estate planning attorney? Carol Grant, P.A., is available to answer those questions and help you make important decisions regarding your estate and the best way for you to protect your family from fighting in probate when you pass on. Book a call today to get your questions answered!
Reference: mondaq (Dec. 18, 2023) “Four Questions To Ask Your Estate Planning Attorney”
