If you're trying to navigate estate planning in Florida, you probably have some questions about how the process works. In this article, we'll cover the most common questions about how to plan for the future.
1. What is Estate Planning and Why Should Floridians Do It?
Estate planning is the process of organizing and managing your assets, including real estate, financial accounts, personal property, and more, to ensure they are distributed according to your wishes upon your death. An "estate" consists of everything you own, from personal property like cars and furniture to real estate such as your home. Since every person has an estate, everyone should have a plan to protect and distribute those assets.
Why is estate planning helpful in Florida? First of all, proper planning means that your loved ones will spend less time in probate court when you pass away. Your personal representative will manage your estate by paying creditors and fulfilling your wishes. Secondly, it means that you will have control over who inherits your property rather than letting the state of Florida dictate terms.
2. What Legal Documents Should Be in a Florida Estate Plan?
An estate plan might include a Healthcare Proxy, which allows you to designate someone to make medical decisions on your behalf if you become incapacitated.
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Last Will and Testament: Estate planning should always include a Will. This document outlines how your assets should be distributed after your death and who should be responsible for carrying out your wishes. Florida refers to this person as a personal representative, but their role is the same as an executor. It can also specify guardianship for minor children.
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Revocable Living Trust: A Living Trust allows your assets to be transferred to your beneficiaries without going through probate. Having a Trust allows you to keep your estate plans private. Trusts are typically more expensive to maintain and are generally recommended only for people with significant assets.
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Durable Power of Attorney: This document designates someone to manage your financial affairs if you cannot do so yourself.
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Healthcare Power of Attorney (Also known as Healthcare Proxy): This document appoints someone to make medical decisions on your behalf if you're unable to communicate your wishes.
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Living Will: A Living Will specifies your preferences for end-of-life medical care, such as whether you want life support in certain situations.
3. Is a Will the Only Florida Estate Planning Document I Need?
While a Will is a fundamental estate planning document, it may not be sufficient on its own in Florida. Most people decide to make a Living Will. A Florida Living Will is a statement outlining which medical care a person wants to accept or reject if the person is unable to make his or her own decisions. A Will and a Living Will complement each other. The Living Will covers you while you're still alive, while a Will is effective when you pass away.
4. Should I Worry About Estate Taxes in Florida?
Florida does not have a state estate tax, also known as an inheritance tax. However, federal estate taxes can still apply to large estates. The federal estate tax generally only applies if your assets are valued at $12.92 million in 2023.
5. How Does Florida's Homestead Exemption Protect My Estate?
Protecting your estate from creditors and lawsuits is a valid concern, and estate planning can play a crucial role in safeguarding your assets. In Florida, there is a significant homestead exemption, which protects your primary residence from certain creditors. This means a creditor can't force the sale of your homestead to satisfy a judgment. The homestead law also prevents a bankruptcy trustee from liquidating a homestead to satisfy a creditor.
6. When Should I Update My Florida Estate Plan?
It's generally a good idea to review your estate plan every few years or when significant life events occur, such as marriage, divorce, the birth of children or grandchildren, the acquisition of new assets, or the death of a beneficiary or executor. Additionally, it's important to keep your estate planning documents up-to-date with changes in state and federal laws, as these can impact your plan's effectiveness. An estate planning attorney can help you stay current and make necessary updates.
7. What Happens If I Don't Have an Estate Plan in Florida?
When you die intestate, which means without a Will, your estate will go through probate, and the state will determine who gets your property. This is a difficult situation for your friends and family, particularly when the probate process drags on for many months.
If you become incapacitated due to injury or illness and you don't have a Living Will or Healthcare Proxy, then you won't have control over what kind of care you receive. It also puts a lot of pressure on your loved ones, who will have to navigate your medical situation without your input. Advanced Directives put you in control of your end-of-life care.
8. What is a "Summary Probate" in Florida?
Summary probate, also called summary administration, is a simplified probate process that applies to small estates and in situations where the decedent has been deceased for more than two years. A person whose estate is valued at less than $75,000 qualifies for a summary administration in Florida.
9. Can I Make a Florida Will Online?
Yes, you can make a Florida Will online, without the help of a lawyer, as long as you follow Florida law. Here are the requirements for making an online Will in Florida:
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The Will has to be in writing. Oral Wills aren't valid in Florida. Although the state recognizes handwritten Wills, courts frequently invalidate them if they don't comply with all legal prerequisites.
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The Will must be made by someone who is "competent" under state law. That means the person must be at least 18 years old and of sound mind.
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The Will must be signed by the person who is drafting it, known as the "testator."
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The Will must be signed in the presence of at least two witnesses. Florida does not bar beneficiaries of the Will from being witnesses, but it's better to have disinterested witnesses.
