FREQUENTLY ASKED QUESTIONS
Estate planning documents that are properly signed in accordance with your former state of residence remain valid. Although when you move to Florida, it’s always wise to update your plan to Florida law. Each state’s laws are different, so that in and of itself warrants a review. If you own a Florida homestead, or if your estate plan hasn’t been reviewed in several years, then those are also two reasons to sit down with us to go over your plan.
Usually the answer is, “Yes, become a Florida resident.” Florida does not have a personal state income tax, an estate tax, gift tax, or inheritance tax. For those who have investment and retirement income, this could mean significant annual tax savings. You also save on property taxes through the Florida homestead exemptions and the annual assessment increases to your primary residence are capped under the “Save Our Homes” property Tax Cap.
Florida has very strict descent and devise rules governing to whom you may bequeath the homestead. If you are married, for example, and fail to bequeath the homestead outright to your spouse, you may have an “invalid devise.” This frequently occurs when the home is owned in a trust that creates credit shelter/marital trust provisions. This is a common problem that left unaddressed could become a costly headache for you and your loved ones.
Nobody enjoys thinking about what needs to happen if they become disabled or die. Many who have previously planned their estates find it confusing and don’t like the feeling of being told what to do. That’s not what happens when you work with us. The Family Estate & Legacy Program® 7-step process begins with your goals and concerns, resulting in a plan that will give you and your loved ones’ comfort and clarity. Our Florida Bar Board Certified specialists will help you design an estate planning strategy that feels right for you and your family, whether ultimately, it’s a simple will or something more substantial.
Your trust is ineffective if it isn’t properly funded. We see this all the time during our initial client meetings. When we update your estate plan, we won’t hand you an instruction sheet and expect you to fully and properly fund your trusts. We do it for you by working with your financial firms to ensure that your accounts fit “hand in glove” with your estate plan. You are involved in every step of that process, but we do all the heavy lifting.
We realize how emotional this time can be. It’s even that much more aggravating when lawyers ask you to sign legal documents, CPAs ask for information to complete the tax returns, and financial advisors want to reposition the investment portfolio. These are the people that you least want to deal with. But there are time deadlines, and what these professionals are asking you to do will likely have a real economic effect on you and the other beneficiaries. That’s where The Estate Settlement Program® comes in. As your legal team we do the heavy lifting while you remain in control as the personal representative (executor) or as the trustee of the trust.
Assuming that your loved one’s assets were titled in his trust, you will avoid probate. But if you are the trustee, you shouldn’t distribute the assets before taking care of all of your legal responsibilities, such as clearing creditors, paying taxes and ensuring that the distributions are correct given your loved one’s most recent document and amendments. We will lead you through The Estate Settlement Program®, which is our trademarked 7 module process designed to meet all of your legal responsibilities.
There may be a little or there may be plenty, depending on each individual file. Once you assume the role of trustee, you have personal liability to fulfill all requirements imposed on you by the law. This includes making sure all of the assets are accounted for, tax cost basis is adjusted, properties sold or distributed, correct IRA RMDs established and a host of other issues. If, for example, you make full distribution to the beneficiaries closing out the administration before completing these tasks, and a legal obligation or unforeseen taxes arises, you are personally responsible to pay for that obligation out of your own pocket, even if the beneficiaries won’t refund you their proportionate share of the inheritance to pay for the obligation. The Estate Settlement Program® walks you through this process to minimize the chance that these problems arise.
As trustee and/or personal representative, you have legal responsibilities to fulfill before making distributions to the beneficiaries. We inform all the beneficiaries of the expected distribution timelines. Communication setting expectations is vitally important, and coming from your legal team it often bears more weight than coming from the family member chosen to act in a fiduciary role. This is where the 7 module Estate Settlement Program® serves to let everyone know what steps need to be completed before the estate or trust is distributed.
The estate or trust will pay the legal fees and costs associated with the administration. The fees and costs are tax deductible to the estate.