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Living Trusts

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During estate planning, you may explore various options for passing assets on to your children, grandchildren, or other loved ones. Two popular methods include creating a will or establishing a living trust.

The Benefits of a Living Trust

A living trust allows you to transfer assets to designated beneficiaries. One of its key advantages is that you maintain control over your assets while you’re alive. You can adjust the trust, adding or removing assets or beneficiaries as your wishes change.

Perhaps the most significant benefit of a living trust is that it bypasses probate, unlike a will. Probate is the legal process of validating a will, which can be time-consuming, expensive, and public. With a living trust, your beneficiaries may receive their inheritance more quickly and privately, as trust details are not part of the public record.

Considerations When Creating a Living Trust

The main drawback of a living trust is the initial cost. It costs more to set up than a standard will, especially if your estate is complex. Attorney fees can also increase based on the complexity of your financial situation.

It’s important to note that placing assets in a living trust won’t provide tax benefits. You will still be liable for any taxes you would normally owe on those assets.

A living trust may be a valuable tool for estate planning, but it’s essential to consult with your family and an attorney to determine if it’s the best option for your circumstances.

Will Facts

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A will has no legal authority until after death. So, a will does not help manage a person’s affairs when they are incapacitated, whether by illness or injury. A will does not help an estate avoid probate. A will is the legal document submitted to the probate court, so it is basically an “admission ticket” to probate. A will is a good place to nominate the guardians  of your minor children if they are orphaned. All parents of minor children should document their choice of guardians. If you leave this to chance, you could be setting up a family battle royal, and your children could end up with the wrong guardians.

Don’t Let The State Of Florida Decide

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There are various strategies and tools available in estate planning, such as wills, revocable living trusts, irrevocable trusts, durable powers of attorney, living wills, and advance health care directives, among others. Unfortunately, many people overlook this critical step in securing their family’s financial future. By preparing a well-considered estate plan, you position yourself ahead of those who fail to plan at all. It often comes as a surprise to learn that without an estate plan, Florida law will determine how your assets are distributed after your death—and the State’s plan is often not what you would have chosen. A properly drafted estate plan ensures that your wishes take precedence over the State’s default plan.

Involve Your Family in Estate Planning to Honor Wishes and Prevent Future Conflicts

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Discussing estate planning with family is crucial, particularly as parents grow older. These conversations help ensure that everyone’s wishes are respected and that potential conflicts are avoided. Initiating these discussions early on can provide peace of mind for the entire family. Involving adult children in these talks is essential for maintaining an up-to-date and comprehensive estate plan.

The Importance of Family Involvement

Including adult children in the estate planning process is vital as parents age. Health and financial circumstances can change, necessitating updates to estate plans. Adult children can help ensure that these plans accurately reflect current needs and desires. Early discussions also help sidestep the complexities of probate, which can be time-consuming, expensive, and stressful.

Understanding Probate and Its Impact

Probate is the legal process through which a deceased person’s estate is managed and distributed. Without the proper estate planning documents, an estate will go into probate upon death, which can lead to several challenges:

  • Lengthy Delays: Probate can take months or even years, delaying asset distribution.
  • High Costs: Legal fees and court costs can significantly reduce the estate’s value.
  • Lack of Privacy: Probate proceedings are public, allowing anyone to access details about the estate.

By having the right estate planning documents in place, families can avoid the pitfalls of probate.

Preparing for the Conversation

Approaching the subject of estate planning with aging parents requires sensitivity and respect. Consider the following tips:

  • Choose the Right Time and Place: Select a calm, private setting at a time when everyone is relaxed and receptive.
  • Be Patient and Understanding: Acknowledge that this can be a difficult topic for parents to discuss.
  • Frame It Positively: Highlight that planning now can prevent stress and confusion later.

Strategies for Effective Communication

To ensure clear and productive discussions:

  • Encourage Openness: Allow parents to express their wishes freely, without feeling pressured.
  • Include All Relevant Family Members: Ensure that all siblings or relevant family members are involved to prevent misunderstandings later.
  • Listen Actively: Show respect for your parents’ wishes by listening carefully.

Key Topics to Address

When discussing estate planning with your parents, it’s important to cover the following:

  • Wills and Trusts: Make sure these documents reflect current wishes and circumstances. Trusts can help avoid probate and offer clear instructions for asset distribution.
  • Healthcare Directives: Discuss living wills and medical powers of attorney to ensure parents’ healthcare preferences are followed.
  • Powers of Attorney: Decide who will handle financial and legal matters if parents become incapacitated.
  • Executors and Healthcare Proxies: Ensure the chosen individuals are ready and willing to take on these roles.

Legal and Financial Considerations

Consulting with legal and financial professionals is essential to make sure that all aspects of the estate plan are legally binding and financially sound. It’s advisable to review the estate plan regularly, particularly after major life events or changes in the law, to keep it current and effective.

Providing Peace of Mind

Making estate planning a family affair ensures that everyone’s wishes are honored and helps prevent future conflicts. Approach these discussions with care and a shared commitment to respecting each other’s wishes. A well-prepared estate plan not only helps avoid the complications of probate but also offers peace of mind for the entire family.

Ready to begin the conversation about estate planning with your family? Contact Carol Lawson PA  today at (727) 410-2705  to schedule a consultation and receive expert guidance on creating a comprehensive and respectful estate plan.

Why You Should Not Add Someone To Your Deed

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Adding a name to a deed is a significant legal action that transfers ownership or a portion of property ownership to another individual. Often, individuals opt to bypass legal counsel and handle the deed themselves. It may seem straightforward—pick up a form from an office supply store, fill it out, and record it. What could possibly go wrong? Quite a bit, actually.

One unintended consequence is when  new spouses, relatives, non-relatives, such as boyfriends, girlfriends, or friends, are added to the deed, and the relationship sours, removing that individual from the deed becomes challenging. After all, you gifted a part of your real property to this person for free.  This leaves you with  few options: convince the unwanted party to voluntarily deed back their share (a daunting task if the relationship is contentious and they may want  you to pay them half of the equity) or engage in costly and lengthy litigation, often resulting in a partition action where attorneys’ fees take precedence and the property is sold and they receive half of the sales proceeds.

Additionally, adding someone to a deed can lead to losing Florida homestead exemption under certain circumstances (such as if the are already on a homestead for example), resulting in the loss of significant tax benefits. Incorrectly worded deeds may also result in property transferring to the wrong individual, derailing estate planning goals. Also, failure to execute the deed correctly according to Florida law renders it invalid and causes title chain problems.

Furthermore, adding a name to the deed complicates property sales or refinancing, as all parties must agree and sign documents. Individuals receiving government benefits like Medicaid and Social Security may jeopardize their eligibility by being added to a deed. Moreover, adding a name to a mortgaged property may trigger the due-on-sale clause, leading the bank to demand immediate repayment of the loan and potentially initiate foreclosure proceedings. If the other person doesn’t live in the property and they file bankruptcy the trustee could also force you  to buy out their interest or force sale of the property.

Consulting an experienced attorney before making changes to a deed is advisable to avoid costly legal entanglements.

Why You Should Want To Avoid Probate

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Probate is a legal process overseen by the court where all assets are gathered, debts are settled, and the remaining estate is distributed to heirs and beneficiaries. While probate serves its purpose, it comes with certain drawbacks that can be avoided with proper estate planning.

One significant disadvantage of probate is its cost. In Florida, attorneys statutory fee is 3% of the estate’s value, more if there is complex litigation.  For instance, in a $600,000 estate, attorney fees would amount to $18,000, reducing the inheritance for intended beneficiaries under the will or heirs at law in an intestate estate.

Additionally, probate proceedings can be time-consuming, taking 12 months to 24 months to complete, and even longer if complexities or litigation arise. During this period, assets are typically frozen, causing delays in distribution. In contrast, avoiding probate allows for quicker and smoother asset distribution.

Moreover, since probate proceedings are public record, privacy is compromised, and creditors become aware of estate details. Those prioritizing privacy may find avoiding probate essential.

Contrary to a common misconception, having a will doesn’t exempt an estate from probate. A will alone cannot bypass probate. A will must be probated and filed with the Court.

However, there are strategies to avoid probate in Florida:

Establishing a trust, such as a revocable trust, tailored to individual circumstances and goals.
Designating beneficiaries contractually, as seen in life insurance policies or retirement accounts- POD or TOD account designations.
Transferring assets through deeds, like an enhanced life estate deed (commonly known as a ladybird deed), which allows lifetime ownership with a remainder interest for named beneficiaries.
Holding property jointly with rights of survivorship, where ownership automatically transfers to the surviving owner upon the other owner’s death.
With the guidance of an experienced attorney, estate planning can be structured to ensure assets pass smoothly and swiftly to beneficiaries, bypassing the probate process altogether.  Call our office to schedule a consultation.

 

 

Probate Deadlines In Florida

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Losing a loved one is undoubtedly a challenging time, and in Florida, navigating probate laws adds another layer of complexity to the grieving process. It’s crucial to initiate the estate administration process promptly, adhering to specific deadlines outlined in Florida probate laws. Engaging an estate administration attorney from the outset ensures compliance with these critical deadlines.

What’s the Timeline for Probate in Florida?

Probate becomes necessary when a person in Florida passes away leaving assets solely in their name. This process, overseen by the court, manages asset distribution in accordance with the deceased’s Will or Florida intestate law if no Will exists. Typically, estate administration in Florida spans from three months to two years or more, contingent on various factors:

Whether the family opts for summary administration or formal administration

The resolution of creditor claims against the estate

Potential challenges to the Will from heirs

While formal administration typically concludes within 18 months to 2 years, all claims against the estate must be filed within two years of the person’s death.

Key Florida Probate Deadlines:

Deadline Triggering Event Required Action

10 days Learning of death File the original Will and commence probate proceedings

20 days or 3 months Service of Notice of Administration (before or after Letters of Administration) Challenge the Will, Personal Representative, or probate court’s jurisdiction

30 days Service of Notice to Creditors File creditor claims against the estate on or before the later of the two listed deadlines

3 months Publication of Notice to Creditors

3 months Publication of Notice to Creditors File formal proof of death

4 months Service of Notice of Administration Petition for exempt property by the later of the two listed deadlines

40 days Completion of proceeding impacting validity, construction, or admission to probate of will.

6 months Date of death Elect to take Surviving Spouse’s homestead election

 

6 months Service of Notice of Administration Elect to take Surviving Spouse’s elective share by the earlier of the two listed deadlines

2 years Date of death

2 years Date of death Statute of repose on all claims against the estate

Probate Timeline for Estate Administration in Florida:

The probate process involves several steps undertaken by the family, personal representative (executor), and the court. Although the specifics may vary, here’s a general overview:

Initiate Probate by Submitting the Original Will: Within 10 days of learning of the death, the original Will must be deposited with the Florida Probate Court to initiate probate.

Appointment of Personal Representative: Generally, within 1 to 4 weeks, the probate court issues Letters of Administration to the designated personal representative.

Send Notice of Administration: Notify beneficiaries and potential heirs within 20 days or 3 months of the commencement of estate administration.

Serve and Publish Notice to Creditors: Promptly notify the deceased’s creditors, publish a notice for two consecutive weeks, and address creditor claims.

Provide Proof of Death: File formal proof of death within 3 months after publication of notice to creditors.

Inventory the Estate Assets: Conduct an inventory of estate assets and their values, filing them with the court and sharing with beneficiaries.

Respond to Creditor Claims: Address creditor claims within 30 days of notification and respond accordingly.

Address Surviving Spouse’s Election Rights: Surviving spouses must exercise their rights within 6 months of probate initiation.

Distribute Assets: Once all claims are settled, distribute assets per the Will terms, documenting beneficiaries’ acknowledgments.

Close the Estate: Upon asset distribution completion, file a petition to close the estate and conclude the probate process.

Seeking Assistance with Estate Administration Deadlines:

Navigating formal estate administration can be intricate. Partnering with an experienced estate administration attorney ensures compliance with deadlines and responsibilities. At Carol Lawson P.A., our probate team assists personal representatives throughout the process, ensuring your loved one’s wishes are honored promptly. Contact us at 727-410-2705 to receive timely assistance.