Estate Planning (Wills, Trusts, Power of Attorney, Healthcare Surrogate)
The following information is provided in an effort to familiarize you with general definitions and descriptions of various estate planning documents which are commonly used in Florida. This is provided for general information purposes only. An attorney should be consulted prior to any estate planning documents being drafted or executed.
Intestate Succession: If an individual has no will at the time of their death, they are said to have died ‘intestate’ and his or her property will be distributed in accordance with the provisions of Florida Statutes. This can be a lengthy and expensive process, especially if relatives are hard to locate.
Will: A Will also known as a Last Will and Testament is a document that takes effect after an individual’s death to facilitate the passing of property from the person who has died to their beneficiaries.
Self-Estate Planning: Self-estate planning is the process by which beneficiaries’ names are added to an individual’s assets in order to avoid probate.
Problems With Self-Estate Planning: Problems with self-estate planning must be examined on a case by case analysis, but usually include many of the following:
- LOSS OF CONTROL OF ASSETS
- POTENTIAL ATTACHMENT BY OTHER PARTY’S CREDITORS
- GIFT TAX PROBLEMS
- POTENTIAL LOSS OF HOMESTEAD EXEMPTION
- CANNOT CONTROL TIMING AND AMOUNT OF DISTRIBUTIONS TO BENEFICIARIES
Living Trusts: (Also known as Loving Trusts, Inter Vivos Trusts, Dacey Trusts, A Trusts) The benefits of living trusts are:
- AVOID THE TIME, MONEY AND EMOTIONAL DRAIN OF PROBATE because, provided the trust is properly funded, there is no probate or ancillary probate.
- NONE OF THE PROBLEMS WHICH EXIST FOR SELF-ESTATE PLANNING EXIST IF THERE IS A TRUST.
- Higher initial attorney’s fees than a will; and
- Assets must be transferred into a trust.
Pour Over Will: These are used in conjunction with Living Trusts and have two major functions:
- Distribute tangible property (e.g. household items); and
- Provides a safety net if any assets are not put into the trust by instructing that after those assets are probated that the trust instructions are controlling.
General Durable Power of Attorney: Allows another individual to sign a person’s name even if they are incapacitated (however, this document is effective from the date it is signed regardless of whether an individual is incapacitated). In some situations a power of attorney may eliminate the need for a guardianship. Should be redone if it was signed before October 1995 as the laws changed that year concerning Power of Attorneys.
Healthcare Surrogate: Florida Statutes enable another individual to make healthcare decisions for a person if one treating physician and one non-treating physician determine that the individual is unable to make medical decisions for themselves.
Living Will: A document which comes into effect if an individual is terminally ill and allows an individual to refuse extraordinary medical treatment.