Estate planning in Florida

Florida Estate Planning

What Is Estate Planning?

Estate planning in Florida involves preparing tasks that manage an individual’s asset base in the event of their incapacitation or death.

This includes the creation of wills, trusts, powers of attorney, and healthcare directives.

It’s designed to ensure that personal wishes are honored, potential legal difficulties are minimized, and tax liabilities are reduced.

Estate Planning Checklist

  1. Last Will and Testament:
    • Purpose: Specifies how your assets should be distributed after your death. It names an executor who will manage the distribution process.
    • Legal Requirements: Must be written, signed by the testator (you), and witnessed by at least two individuals who must also sign the document.
  2. Trusts:
    • Revocable Living Trusts: Allow you to maintain control over your assets during your lifetime, with the assets transferring to your designated beneficiaries upon your death without the need for probate.
    • Irrevocable Trusts: Provide significant asset protection benefits but involve giving up control over the assets placed in the trust.
  3. Durable Power of Attorney:
    • Function: Enables a designated person to manage your financial affairs if you become incapacitated. This power includes managing financial transactions, property, and other legal decisions.
  4. Health Care Directives:
    • Living Will: Documents your wishes regarding medical treatment if you become unable to communicate your decisions due to illness or incapacity.
    • Health Care Surrogate Designation: Appoints someone to make medical decisions on your behalf if you are unable to do so.
  5. Designation of Pre-Need Guardian:
    • Purpose: Allows you to choose a guardian in advance who will take care of your personal and property affairs if you become incapacitated.

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How Much Does Estate Planning Cost in Florida?

An estate planning package in Florida costs between $1,000 and $4,000.

What Affects the Cost

An estate planning package costs less if the package does not include a living trust. Packages with 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.

Florida estate planning documents

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.

Estate Planning for Single Parents

Estate planning for single parents is an essential process, yet it can often seem overwhelming. At its core, it involves creating a strategy to ensure that your assets are handled and distributed according to your wishes after your death, and more importantly, it’s about ensuring your children are cared for and financially secure.

For single parents, writing a will is a critical step. This document not only outlines how your assets should be distributed but also, perhaps more importantly, allows you to appoint a guardian for your minor children. Without a will, these decisions fall to the state, which might not align with your personal wishes.

Another aspect of estate planning is the establishment of trusts. Trusts are valuable tools that can be used to manage how your children will receive their inheritance. This is especially useful if your children are minors or have specific needs that require long-term planning and support.

Life insurance is another key component. It offers a financial safety net for your children, covering living costs, educational expenses, and other needs in your absence. The choice of a beneficiary for these funds is crucial and should be someone who will manage the finances in the best interest of your children.

Beyond assets and finances, estate planning for single parents also involves making decisions about your own health and well-being. Establishing a power of attorney can ensure that someone you trust will manage your finances if you’re incapacitated. Additionally, healthcare directives allow you to outline your medical wishes if you cannot communicate them yourself.

It’s also important to consider the details of your accounts and policies. Beneficiary designations, such as those on retirement accounts and insurance policies, must be regularly reviewed and updated to reflect your current wishes, as they often precede instructions in a will.

While not legally binding, a letter of intent can guide the chosen guardian, conveying your parenting philosophies, values, and hopes for your children’s upbringing. This can be a personal and heartfelt addition to your legal documents.

Estate planning is not a one-time task, especially for single parents. It should be revisited regularly, particularly after major life events like the birth of additional children, financial status changes, or relationships.

Estate Planning for Married Couples

Estate planning for married couples involves creating a strategy to manage and distribute assets, ensuring both partners’ wishes are respected and providing for any dependents. While the specifics can vary based on individual circumstances, some common elements include:

  1. Joint Wills or Separate Wills: Couples can opt for joint wills, which cover both partners, or separate wills. Separate wills offer more customization but require more coordination.
  2. Trusts: Trusts can be used for asset protection, tax benefits, and specifying how assets are distributed. They can be particularly useful for blended families or when there are specific wishes regarding asset distribution.
  3. Life Insurance Policies: Life insurance can financially support the surviving spouse or children. Beneficiary designations should be regularly reviewed and updated.
  4. Power of Attorney: This allows one spouse to make financial decisions if the other is incapacitated, ensuring seamless management of financial matters.
  5. Healthcare Directives: These documents specify each spouse’s wishes regarding medical treatment and end-of-life care, which is crucial when one cannot make decisions for themselves.
  6. Beneficiary Designations on Retirement Accounts: It’s important to ensure that beneficiary designations on retirement accounts and other financial instruments align with the overall estate plan.
  7. Titling of Property: How property is titled (jointly or separately) can affect its distribution. Couples should consider the implications of titles on real estate and other significant assets.

In addition to these components, estate planning for married couples often involves considerations of tax implications, especially when transferring wealth and property. Regular reviews and updates are important, particularly after major life events such as the birth of a child, a significant change in financial status, or the death of a family member. Consulting with an estate planning attorney can provide tailored advice and ensure the plan aligns with the couple’s goals and legal requirements.

Estate Planning for Blended Families

Estate planning for blended families, which typically involve spouses with children from previous relationships, can be complex due to each family member’s unique dynamics and needs. The goal is to balance providing for the current spouse, ensuring that children from previous relationships are treated fairly, and minimizing potential conflicts after one’s passing.

Using a will is critical in such situations, but it often needs to be more nuanced than in traditional estate planning. Spouses in blended families frequently need to navigate how to distribute assets between their current partner and their children from previous relationships. This often involves specific bequests and clearly defined shares of the estate to avoid ambiguity and potential disputes.

Trusts play a vital role in estate planning for blended families. They can provide a way to manage and distribute assets according to specific guidelines set by the estate planner. For example, a trust can be established to provide for the surviving spouse during their lifetime, with the remaining assets then distributed to the children from previous relationships upon the spouse’s death. This setup helps maintain fairness and honor the needs of both the spouse and the children.

Another consideration is the selection of an executor or trustee who can impartially execute the estate plan. Choosing someone outside the family is often advisable to reduce potential conflicts of interest and ensure fair estate administration.

Life insurance policies can also be a strategic tool in estate planning for blended families. They can provide immediate financial support to the surviving spouse or children and can be structured to balance the inheritance among family members.

In addition to these tools, individuals in blended families must have open discussions about their estate plans. Clear communication can help manage expectations and reduce the likelihood of misunderstandings or disputes after their passing.

Frequently Asked Questions

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

What is probate?

Probate is the legal process of administering the property of a deceased person (decedent). The primary objectives of the probate court are (i) determining the rightful heirs to property (whether such heirs are designated in a will or by laws of intestacy); (ii) making sure the financial obligations of the decedent are paid; and (iii) transferring legal title of the property to the heirs. Probate proceedings are administered through the probate courts which are a division of circuit courts in each of Florida’s counties.

What is a personal representative?

In Florida estate planning, the person who represents the decedent in probate and other legal proceedings is called a “personal representative.” A formal probate begins with the appointment of a personal representative.  Most wills nominate a qualified person to serve as the personal representative.

What is the estate tax?

The estate tax is imposed on the transfer of wealth at death. The calculation of the estate tax is based on the value of a decedent’s “gross estate.” The gross estate is the value of all property in which the decedent had an interest at the time of death (plus certain other statutorily mandated items).

Gideon Alper

About the Author

I’m an attorney who specializes in asset protection planning. I graduated with honors from Emory University Law School and have been practicing law for almost 15 years.

I have helped thousands of clients protect their assets from creditors. Before private practice, I represented the federal government while working for the IRS Office of Chief Counsel.