Florida Estate Planning

Estate planning allows a person to direct what happens to their property upon their death. In Florida, estate planning includes a (1) last will and testament, (2) power of attorney, (3) health care advanced directive, (4) living will, and (5) a declaration of pre-need guardian. Sometimes estate planning also involves living trust and estate tax planning. All of the estate planning documents must be signed pursuant to Florida law.

A basic Florida estate plan includes the following documents:

• Will. Directs the disposition of your property after your death and appoints your personal representative.
• Power of attorney. Grants someone the legal authority to act in your place.
• Health care directive. Allows someone to make medical decisions for you if you are incapacitated.
• Living will. States your desire to end life-sustaining treatment.
• Declaration of pre-need guardian. Designates who should be your legal guardian if a Court determines that you need one.

How Much Does Estate Planning Cost?

In Florida, the cost of a typical estate planning package is between $1,000 and $4,000. An estate planning package costs less if the package does not include a living trust. Packages with a trust and estate tax planning will be more expensive.

Some people may use do-it-yourself online services for basic estate planning needs, like creating a simple will. These services can cost anywhere from $50 to $250.

For basic estate planning needs that include drafting a will, establishing a power of attorney, and creating a living will or healthcare directive, the cost can range from $300 to $1,500 when working with an attorney.

For more complex estates, such as those that involve setting up trusts, the cost can range from $1,000 to $10,000 or even more. This range accounts for the wide variety of complexity involved in estate planning for larger estates, such as those with many assets or those with complex tax situations.

Property Subject to Estate Tax

A decedent’s property may be subject to federal estate tax. The decedent’s taxable property interests comprise what is referred to as the “gross estate.” The gross estate can be loosely defined as the value of all property in which the decedent had an interest at the time of death (plus certain other statutorily mandated items).

 Gross estate assets are usually valued at fair market value on the date of death. Some of the rules regarding the inclusion of property in a decedent’s gross estate are as follows:

Property Owned Outright. All property that a decedent owned individually and outright is part of the decedent’s gross estate.

Jointly-Held Property. Many people die owning property jointly rights of survivorship. The most common joint ownership is property owned jointly by husband and wife. For tax purposes, one-half of the value of such joint property is included in the gross estate of the first joint tenant to die, and the other one-half is excluded from the gross estate. Suppose joint property is held with the right of survivorship between persons who are not husband and wife (such as parent-child or brother-sister). In that case, the entire value of any joint property will be included in the estate of the first joint tenant to die unless the estate can affirmatively prove that the surviving joint tenant supplied some, or all, of the money used to purchase the joint property.

Life Insurance: The proceeds of any life insurance on the decedent’s life are included in the gross estate if (a) the policy proceeds are payable directly or indirectly to the decedent’s estate; or (b) the decedent held any incident of ownership in the policy, such as the right to change the beneficiary, surrender or cancel the policy, or borrow against the property.

Deductions from Gross Estate

The federal estate tax law permits several deductions from the taxable value of a decedent’s gross estate. The most significant estate tax deduction is the unlimited marital deduction which provides an estate tax deduction for property left to a surviving spouse. There are two basic prerequisites of the unlimited marital deduction:

An Interest Must Pass to the Surviving Spouse. A marital bequest must be to a legally recognized spouse. A bequest to a divorced or deceased spouse will not warrant a marital deduction. The surviving spouse must also be a citizen of the United States.

The Interest Must be a Deductible Property Interest. A decedent’s property interest is deductible only to the extent such interest is included in determining the value of the gross estate. If a property interest is not included in the gross estate, its passing to a surviving spouse does not qualify for a deduction.

Frequently Asked Questions

Below are answers to frequently asked questions about estate planning in Florida.