1. What is a will, and why do I need one?
A Will is nothing more than a letter to the probate Judge, telling the court who you want to be in control of your estate (your Personal Representative) and how you want your estate to be distributed. A person is intestate when they have no Will. The intestate statute may call for distribution of your estate which is in contradiction to your wishes.
2. Does a will avoid probate?
No. A Will requires probate because a Will is like a letter to the probate Judge. If you write a Will there is a good chance that your estate will have to be probated.
3. Why do I want to avoid probate?
Probate prices in Florida are considered high. Average shrinkage of an estate in Florida caused by probate expense is between 3%-10% of the value of all the assets going through probate. Florida statutes provide that the attorney may be paid 3%of the first million dollars of assets in the probate estate. Thereafter, there is a decreasing percentage payment. This percentage fee is in addition to an hourly rate for any “extraordinary” expenses such as assisting the Personal Representative in a real estate closing. The Personal Representative is also entitled to a fee which is usually equal to the attorney’s percentage fee under the statute. For this reason, as well as the time involved in the average estate, most people wish to avoid probate, or at least minimize their exposure to the probate process.
4. What is probate?
Probate is the process of changing title of your assets after your death from your ownership to your beneficiaries or heirs. During this process, all of the assets that you owned during your lifetime in your individual name and outside of any trust or beneficiary designated asset will be retitled and distributed to your beneficiaries or heirs, after payment of your creditors.
5. What is a living trust, and why do I need one?
A living trust is a document which creates an entity that will survive your death. The primary purpose of a living trust is to avoid probate. A secondary purpose and the driving force behind the desire to have a living trust is the avoidance of estate tax. A third purpose in creating a living trust is to consolidate your assets and prepare for administration of your assets during your lifetime but in a time where you are not able to care for yourself. A living trust can avoid probate after your death and in many cases guardianship during your lifetime. The decision of whether or not to declare a living trust should be made with the advice of an attorney.
6. Does a trust avoid probate?
In most cases, yes; however, even though many people establish a living trust, some do not follow through with funding the living trust. For this reason, beneficiaries of a living trust end up having to probate assets which were never transferred to the decedent’s trust. In addition, most people choose not transfer their homestead into their living trust and after their death the homestead must also be transferred through a probate.
7. What is a Durable Power of Attorney, and why do I need one?
A Durable Power of Attorney is a document in which you give someone else the right to be you. This person, depending upon the scope of powers you confer upon them, may do any number of things as if they were you including closing bank accounts, taking out loans, selling real estate and the like. A Durable Power of Attorney can be invaluable in protecting your assets and maintaining your lifestyle in a time of incapacity not only in your old age but at any time during your life.
8. What is a Designation of Healthcare Surrogate, and why do I need one?
A Designation of Healthcare Surrogate is a document created by Florida statute. In this document you name a surrogate to act for you in your health care decisions when you are unable to do so for yourself. To be clear, no one needs a Designation of Healthcare Surrogate unless they have a clear desire regarding their care in the instance of a serious injury or illness.
9. What is a Living Will, and why do I need one?
A Living Will is a document in which you state your desires for life support and other treatments such as the withholding of food and water. I recommend that my clients execute a Living Will in addition to a Designation of Healthcare Surrogate so that if the Designation of Healthcare Surrogate is ever deemed an invalid document in a court of law or though a statutory repeal, your desires for your healthcare will be known. To be clear, no one needs a Living Will unless they have a clear desire regarding their care in the instance of a serious injury or illness.
10. What other documents are there that I might need to complete my estate plan?
There are several other documents which could make up your complete estate plan in addition to a Will or Trust, Durable Power of Attorney and Designation of Healthcare Surrogate. Many times my clients wish to execute a Designation of Preneed Guardian. This document is like a letter to the probate Judge stating who you wish to act as your guardian in your incapacity. You can designate separate persons to act as guardian of your person (the person in charge of making decisions for you such as where you would live and who your doctor will be) and your property (the person in charge of your assets). Another document which my clients find useful is an Appointment of Agent to Dispose of Bodily Remains. Basically this document allows you to name someone to be in charge of your funeral and disposition of your remains. Both of these documents are used most often in second marriages or in family situations where there is strife between the parents and children or among the children.
Julie
Copyright All Rights Reserved Julie Ann Sombathy 2012
