Estate Planning





Estate planning is a term that simply means how do you want to be cared for in the final stages of your life, and who do you want to get your assets after you die.  Estate plans can be simple for the small estate, or can be very complex for the large estate.  But, regardless of the size of the estate, it is very important to have a plan, otherwise the State of Florida will make those decisions for you, and maybe differently then you would have wanted.

Estate planning can encompass a wide range of documents, each with its own specific purpose.  Living wills, declaration of health care surrogate, pre-need guardian, and a power of attorney are for final stages of life planning, while a last will and testament, and a living trust are for directing how assets are distributed after death.   Please read the links to the various estate planning tools so you can become more familiar with each type of document, and its purpose, so you may have a better idea how you can achieve the estate plan that will accomplish your goals.

Last Will and Testament

A will is simply a document that tells the Court how a person wants their belongings to be distributed after they die, and with the exception of certain limitations we can explain to you in more depth, I person can generally direct who they want to receive their assets.  If a person dies with a will, they are referred to as being “testate”.

However, if a person dies without a will, or “intestate”, their assets will be distributed according to a formula set out in the Florida Statutes.  Often times the formula set out by law is not what the person wants.  Unfortunately, over seventy per cent of Floridians over the age of sixty do not have a will. Even fewer people under age sixty have a will.  Therefore, to avoid the State deciding who gets your assets, you must have a will so the Court will know how your assets should be distributed.

Wills can be simple or complex depending on what the person is trying to accomplish.  Simple wills are relatively inexpensive and they can be done rather quickly, while complex wills take more planning and are more expensive.

Regardless of whether a person dies “testate” or “intestate”, if the person does not have a living trust a probate estate will have to be opened with the Court so the assets can be distributed.

People often wonder about the difference between a will and a living trust. They are quite different, and since each can have a profound effect on your estate planning, you should consult an attorney for more detailed information of each.

Living Trust

Although it is a good idea to have a simple will, for many people a living trust may suit their estate plan even better.  One of the major differences between a will and a living trust is that a person may be able to avoid probate. Both probate and living trusts have the purpose of transferring the assets to the persons of their choice after death.  However, probate may be more time-consuming, it may be more expensive, and it is a part of the public record and is available for inspection to anyone.

A probate estate may take anywhere from 6 to 12 months to administer while an average living trust may be administered in a month or less.  Some advantages to a trust may be the decedent’s assets are available almost immediately to pay for expenses such as funeral and burial and, house and vehicle payments.  If there is real estate, it can be immediately transferred to the heirs or sold.  However, some disadvantages may be the loss of the stepped up basis in real property, and no Court supervision if family relations are strained.

Currently, basic attorney fees for probate average about 3% of the net estate worth.  Also, the court cost and other expenses for a probate average about four hundred dollars.  Therefore, the fees and costs on a one hundred thousand dollar estate will average more then three thousand dollars.  Depending on the complexity, a living trust can cost substantially lees.

Whatever estate plan a person chooses, it is important to have a plan, otherwise the State will make those decisions for you.

Living Will    

This actually is a poor name for this document, because it confuses people with the person's "Will" (Last Will & Testament) and a Living Trust. Both of those documents have to do with transferring property at your death to others. The Living Will is actually a "dying declaration" and not a "Will" at all, and has nothing to do with "living", because you are saying that under certain circumstances, you want your life to end.

The Living Will has to do with your intent to refuse "heroic/extradonary measures", or "life prolonging procedures" including the withholding and/or withdrawal of feeding and,or hydration tubes, in the event of your "terminal illness".  This document only applies when you are "terminal", and has no effect otherwise. Your terminal condition must be certified by your doctor and also by another doctor. Once this is done, and because you have a properly executed Living Will to do so, your representatives can insist that all life support systems be removed if they are hooked up at that time, or if they are not hooked up, then for those life support systems not to be utilized at all. In essence, you are really saying that you do not want the "dying process to be prolonged".

The Living Will is not nearly as broad a scope as the coverage of the Health Care Surrogate Designation (described below), which has to do with whenever medical treatment is necessary and you unable to dictate your own medical care yourself.

Your Living Will also names the persons that you have designated as your Health Care Surrogates, and who are to serve in the order that you have selected, and are to have the legal authority to relate your medical decisions to your doctors and hospitals. (See Health Care Surrogate Designation.) If the first person is unwilling or unable to serve in that capacity, then the second one may serve.

Durable Power of Attorney      

You actually have two (2) Durable Powers of Attorney. One is your Initial Durable Power of Attorney for the first person whom you have selected, and the second is the Alternate Durable Power of Attorney for the second person, who is to serve if the first person dies, becomes incapacitated, or resigns or declines to serve in that capacity.

A Power of Attorney is "Durable" when it specifically includes language in it stating that the Power granted shall "be durable" during periods of your "incapacity". This is lacking in a "regular"(or as I call it, a "bookstore power of attorney") Power of Attorney (not durable), which becomes useless when you do become "incapacitated", because the law revokes it for you, because you have lost the capacity to revoke it yourself. Proper drafting is extremely important. For several years, Florida only allowed "family members" to hold your "Durable Family Power of Attorney", but that restriction was dropped several years ago. But remember, the Durable Power of Attorney can be revoked by the Court, and is automatically revoked by the Guardianship Court, upon the appointment of a Guardian. That is why I do not like  designations of health care surrogates tucked inside of vulnerable Durable Powers of Attorney. However, I do give the directions in the Durable Powers of Attorney directing the payment of medical bills committed to by the Health Care Surrogate.

In both Durable Powers of Attorney, you appoint someone (first the person designated in your Initial Durable Power of  Attorney, and secondly the other person as the alternate) who will have the right and the authority to sign documents, checks, stocks, bonds, enter safety deposit boxes, modify or make demands on insurance polices, prepare and sign income tax returns, deal with Social Security, and take other legal and financial actions on your behalf.

Please note that as the person serving in the capacity as your Durable Power of Attorney can do these things or take these actions even before you are incapacitated. Therefore,only appoint someone you trust to serve as your Durable Power of Attorney. This is another reason that Florida required a "family member" to serve in capacity, as well as having required notifications to be sent to certain relatives. However, both of those requirements have been dropped. You may have someone else hold the document giving them the authority to act until such time as the need arises. Also, remember that if you are the subject of a guardianship proceeding, during that proceeding, the Durable Powers of Attorney are "suspended" ("goes on hold") and will be revoked altogether by the Court if the Guardianship is imposed on you. Until the Court actually decides whether or not you must have a guardian, the person holding the Durable Power of Attorney can only act with Court permission. This is another reason to consider having a Living Trust.

Once the Court decides you must have a guardian, then the person selected as your "guardian over your property" would serve in lieu if the Durable Power if Attorney appointee This is why you have also named the same people in the same order to serve as the "guardians over your property". (See Pre Need Guardianship Designation).

Another common misconception with regards to Durable Powers of Attorney is that the "Attorney-in-Fact" who has been granted the power can take care of matters for you after you die. The fact is that the right to act for you under your Durable Power of Attorney dies with you. Nor is the grantee automatically chosen as your Personal Representative under your last Will & Testament. You have to appoint those persons to serve on your behalf in your Will or Living Trust.