[LINKS TO SECTIONS BELOW]
What is a will and why do I need one?
If I have an out of state will, is that sufficient?
How do I know when it is time to update my will?
Where should I store my will?
What is probate?
What is a Personal Representative and why do I need to name one in my will?
Do I need to probate my newly deceased spouse’s will if our assets are held jointly?
If my estate is probated, can the whole world have access to my affairs?
What other documents should I draft in addition to a will?
What is a Revocable Living Trust and should I create one?
A will is the simplest way to ensure that your funds, property and personal things will be distributed after your death the way you want them to. Even if you have very few assets, you will benefit from having a will. About half of all Americans die without a will (known in legal terminology as dying intestate). Without a will to indicate your wishes, the court steps in and distributes your property according to state law. A will ensures that your assets will be given to family members or other beneficiaries you designate.
Having a will is doubly important if you have young children. One section of the will allows you to designate a guardian for them in the event of your death. Without a will, the court will appoint a guardian for your children, who may not be the person you desire.
Many Florida residents have out-of-state wills, drawn up while they were still living among the hills of North Carolina or the hubbub of New York. If the will was valid according to your old state’s laws at the time you made it, it is still legal in Florida. However, if you are a Florida resident, you may benefit greatly by having a new will drawn up in Florida, because it will likely be more easily admitted to probate.
It is important to know that each state has its own requirements for what makes a will a legally binding document. For example, Florida doesn’t recognize handwritten wills that haven’t been witnessed (known as “holographic wills”), or oral wills not put into writing, even if other states okay them. There’s also the matter of Florida estate law. In this state, for example, your surviving spouse is entitled to 30 percent of your net probate estate, regardless of what you say in your will. The spouse may also have a “Homestead” interest in property you share here, even if you want your house to go to someone else. In fact, all real property owned in Florida will be subject to this state’s laws, even if you’re a snowbird maintaining a residence in the state where your will was drawn up. Other peculiarities also exist, which is why a Florida will could make things much easier for your heirs.
If you would like to have me review your current out-of-state will, I am happy to do so without charge. If it turns out to be in accordance with Florida state laws and procedures, you can continue to rely on it. If not, however, your heirs would rather you discover that now.
It is a good idea to re-read your will every few years to be sure it reflects up-to-date realities (you may not want to leave your heirloom to a niece you are no longer speaking to, nor have someone be named your child’s guardian if they have taken seriously ill since you drafted your will). It is especially important to reexamine your will if:
You have gotten married since it was last drafted;
You have made bequests to people who have fallen out of your favor or are no longer living (I recently updated the will of a man who had left everything to his first wife, who was long deceased), or you have not included people who are now dear to you;
You would like to change the person named as the personal representative of the estate. (Note: Florida law does not allow a nonresident of the state to serve in this position, unless it is an immediate family member or certain other relatives);
You have acquired pricey or sentimental items that are not accounted for in your will. Do note, though, that Florida law allows you to attach a separate personal property memorandum to your will, detailing who will get which specific items. This list can be changed whenever you want.
Perhaps I should answer this question with where not to store it: in a bank’s safety deposit box. Although it may seem logical to put this with your other important papers, it is often difficult for your heirs to gain access to the box once you die, since the box is sealed then and must be opened in the presence of a bank employee.
One good option is to leave your original will with the attorney who drafted it, making copies for your personal representative and other important relatives and letting them know who has the original. For my clients who prefer that I store their original will, I keep it in a fireproof will vault in my office, or in the vault in my bank.
As an alternative, you could store the will in a fireproof box or vault in your own home.
Wherever you store it, be sure to let your personal representative and other close relatives know where you have put it!
Probate is when the court oversees your assets and liabilities after your death. During probate, the court makes sure that your will is valid and acceptable; that all debts, bills, creditor’s claims, and taxes are paid from your estate’s assets; and that your remaining assets are distributed to your beneficiaries according to your will (or, if no will exists, by Florida law).
Probate usually does take longer than most beneficiaries would like. But in order to ensure that everyone with a right to a claim is included in the process, the court requires several steps. If the size and complexity of your estate are minimal, however, the entire process of probate can take as little as a few months. Larger estates that are subject to IRS estate taxes or those involving litigation on the part of creditors or heirs generally take longer, often one or more years.
To speed the process along for simple and small estates, the courts allow a shortened form of probate, known as “summary administration,” which requires much less paperwork and time.
A personal representative (PR) is a friend or relative, or an attorney or bank, who is put in charge of the estate until all matters regarding the probate are resolved. (In other states, this person is sometimes called an executor or administrator.) The job of the PR includes identifying all assets, searching for creditors and paying valid claims, filing required estate tax returns if the estate is large enough (the figure escalates over time, according to Congressional laws), coordinating with the probate court and attorneys, and overseeing the distribution of assets–all done under the guidance and assistance of a qualified attorney.
Serving as a PR is an important role, and such a person should be selected with care as to who is most willing and best able to serve in this position. By Florida law, your personal representative must be over 18 years of age, and be a blood relative, your spouse, the parent or child of your spouse, or a Florida resident.
Generally, no. If you co-own all property via such legal structures as “tenancy by the entirety” or by “joint tenancy with right of survivorship” the property immediately passed to you upon your spouse’s death. Proof of death is usually all that is needed to pass such jointly owned title for cars, stocks, and other personal property to the surviving spouse.
But if even one asset was held solely in the deceased person’s name, or any property is owned in the form of a “tenancy in common,” that estate will be required to go through probate. If the assets are limited, the shorter, simpler form of probate is generally all that is required.
Sometimes clients tell me they want to avoid probate because they don’t want others to have access to what they believe is their personal business. It is true that a probate file does become part of the public record in court. For most people without extraordinary assets or sordid life secrets, however, this fear may be based more on emotion than actual fact. Reporters may have waited in line for a peek at Jackie Kennedy’s filed will, but they likely won’t bother looking up yours.
What’s more, while your will does become part of the court’s public probate file, the inventory your personal representative files with the probate court, which itemizes your specific assets, remains private and confidential. Someone who goes through the trouble of looking up your file may see that you left all of your assets to your only son, but they will not know specifically what those assets include.
Several other documents are as crucial to your estate planning as your will. They include a Living Will and a Healthcare Surrogate.
A Living Will tells your doctor what kind of care you would like to have if you become unable to make medical decisions (such as if you are in a coma). This document describes the kind of treatment you would want or not want depending on how sick you are. It comes into effect when you are terminally ill. For example, the Living Will would describe what kind of care you want if you have an illness that you are unlikely to recover from, or if you are permanently unconscious. This can help you try to avoid what some believe to be an undignified life by allowing you to decline medical treatment, food, and water if these things are “artificially” keeping you alive. If Terri Schiavo had had a Living Will, years of court battles among her family could have been avoided.
While a Living Will specifically describes the kind of care you want or don’t want, it does not select someone to make those decisions for you. That is the role of a Designation of Healthcare Surrogate. Here, rather than choose what specific care you want, you choose the person you authorize to make crucial healthcare choices for you. It becomes active any time you are unconscious or unable to make medical decisions. (A Living Will and Designation of Healthcare Surrogate do not conflict, and everyone should draft one of each.)
There is a big movement in Florida to sign people up for Revocable Living Trusts. These documents can be helpful in certain situations, but have downsides too.
If a Living Trust is created for you, you convey all of your property, stocks and possessions to a trustee (while you are living, the trustee is typically you) for your benefit during your lifetime. Because it is revocable, you retain the ability to cancel the trust at any time and get your property back. Trusts are fashioned in such a way that when you die, the successor trustees can step into your shoes and can pass the assets of your estate to the beneficiaries itemized in the trust without needing probate proceedings.
Once you create a Living Trust, you must transfer all your assets from your name to the trust’s name, a sometimes complicated process. However, for some, the benefits of not going through probate outweigh this inconvenience.
There are myths about living trusts that many people come to my office having heard. Here are the facts:
A Living Trust will not eliminate the income or estate tax. Income earned by the trust during your lifetime is attributed to you by the IRS, so you pay taxes as if the trust didn’t exist. When you die, trust property is considered part of your estate. If it reaches the threshold for estate taxes, your trust will be taxed accordingly.
If you have a Revocable Living Trust, you still may need to go through probate. Any asset owned by you individually that was not included in the trust still must go through the courts before it reaches your heirs.
Still, a Living Trust may be right for you. Feel free to give me a call to discuss your specific circumstances.