Florida Estate Planning

 

Losing a loved one is difficult, and this can be made even more stressful if that loved one left behind assets to distribute to rightful heirs or debts to resolve. At the Atcachunas Law Firm, we handle cases throughout Central Florida with compassion. If you find yourself facing the task of administering the estate of another, don’t go it alone. We can take care of the probate process so that you and your family can focus on the important matters that arise following the death of a spouse, parent or other loved one.

Probate

What is Probate?

In Florida, probate is the legal system through which certain assets of a deceased person are used to pay off the deceased’s debts, and the remaining assets passed on to the heirs of the deceased person.

A Florida probate can include:

  • Proving to the Florida probate court that the deceased person’s will is valid.
  • Identifying and preparing an inventory of the deceased person’s property.
  • Determining the value of the deceased person’s property.
  • Paying all debts and any taxes due.
  • Distributing the remaining property as the will or the law directs.
  • Attorney and court fees which are typically paid from estate assets.
Executors/Personal Representatives are under no obligation to use for probate, the same law firm that wrote the will. Nearly all probate procedures in Florida involve paperwork drafted and filed by probate lawyers. Unlike some other states, Florida law generally does not allow “do-it-yourself” probate except in some cases involving very small bank accounts, refund checks, or similar assets.

Formal vs. Summary Administration

 

Formal Administration

Chapter 733 of the Florida Statutes governs probate administration.

In general, “formal administration” is required when the decedent has been dead for two years or less and when the value of the probate estate exceeds $75,000. Remember that the value of the probate estate is not the same as the value of the gross estate. A decedent’s gross estate consists of everything in which the decedent had an ownership interest, regardless of the form of property and regardless of where it is located.

The probate estate consists of those assets that were owned by the decedent and the decedent alone. For example, a sole-named bank account, a retirement account with no named beneficiary, a house in the decedent’s name with another person as tenants in common. Jointly-owned property does not pass through probate and neither does property with a named beneficiary. Assets held in a revocable or living trust do not pass through probate. So, a person could have a $5,000,000 gross estate and have no probate estate, a small probate estate or a probate estate of the same size as the gross estate. It simply depends on how the decedent’s assets were owned at the time of his/her death.

The formal probate process involves the application by a qualified fiduciary to be appointed personal representative/executor. That person may have to post a bond or the court may require a restricted depository in lieu of a bond. A restricted depository is a bank account from which no withdrawals can be made without court order. Both the bond and the restricted depository are intended to protect beneficiaries from maladministration, whether intentional or accidental. The duties and powers of the personal representative are set forth in great detail in the statutes, as are formulas for compensation for the personal representative and his/her attorney. Creditors must be notified and given an opportunity to present their claims to the personal representative. Once the assets have been marshaled and the creditors have been satisfied, then the personal representative must account to the beneficiaries for the period of administration and distribute the assets to them. Upon successful completion of administration, the personal representative is discharged from any further duties and liabilities.

The formal probate process can take anywhere from 4 months to many years, depending on the nature and complexity of the case and whether litigation is involved.

Summary Administration

Chapter 735 of the Florida Statutes governs two abbreviated forms of probate: summary administration and disposition of personal property without administration.

According to Fla. Stat. §735.201, summary administration may be had in the administration of either a resident or non-resident decedent’s estate, when it appears:

  1. in a testate estate (one where the decedent had a will), the will does not direct administration;
  2. the value of the entire probate estate in Florida, less the value of exempt property, does not exceed $75,000 OR the decedent has been dead for more than 2 years.

The reason for the 2-year rule is that there is a statute that limits claims against an estate to two years. Fla. Stat. §733.710 states that: “notwithstanding any other provision of the code, 2 years after the death of a person, neither the decedent’s estate, the personal representative, if any, nor the beneficiary shall be liable for any claim or cause of action against the decedent, whether or not letters of administration have been issued, except as provided in this section.” (The exceptions are for creditors who timely filed claims under Fla. Stat. §733.705 and purchase money security interests, e.g. mortgage). This “limitation on claims against estates” statute is called a statute of repose. It provides a date upon which (2 years after date of death) the creditor’s action no longer exists, whether it has accrued by that date or not, so it entirely cuts off a creditor’s right of action. It is a stricter deadline than a statute of limitations because it may not be tolled by fraud, discovery of claim, etc.

The other abbreviated form of probate administration is called “disposition of personal property without administration.” This type of probate is technically not administration at all. It involves the filing of one pleading (this may be done by information affidavit of letter) on which the court will issue an order. It is available only if the decedent had only exempt personal property (for example, a personal use automobile) and non-exempt property that does not exceed in value the sum of preferred funeral expenses ($6,000 max) and reasonable and necessary medical and hospital expenses of the last 60 days of illness.

Florida Power of Attorney

Florida recognizes several types of documents as Powers of Attorney. A “Power of Attorney” is a written, legally-binding document where one person, cedes or delegates the right to another person, the “attorney-in-fact,” to act on his or her behalf. How much power is granted by the principal and how many acts the attorney-in-fact can undertake on behalf of the principal depends upon the type of Power of Attorney involved.

Types of Powers of Attorney

Durable Power of Attorney

When a Power of Attorney provides that the power given to the attorney in fact should survive the incapacity of the principal, a “Durable Power of Attorney” is created. Most Florida Powers of Attorney are durable.

Under Florida law, a Durable Power of Attorney remains legally valid regardless of the capacity or incapacity of the principal (the one signing over power to another, the “attorney-in-fact”). To avoid misuse of power by the attorney-in-fact, the Florida legislature has enacted specific limitations on what the attorney-in-fact can do when there is an incapacitated principal and placed certain requirements before a Power of Attorney will be recognized as durable (Florida Statute §709.08):

  1. The durable power of attorney must be in writing;
  2. must be executed with the same formalities required for the conveyance of real property by Florida law; and
  3. must contain the words: ” This durable power of attorney is not affected by subsequent incapacity of the principal except as provided in s. 709.08, Florida Statutes ” or similar words that show the principal’s intent that the authority conferred is exercisable notwithstanding the principal’s subsequent incapacity.

Additionally, if the durable power of attorney is conditioned upon the principal’s lack of capacity to manage property, then the durable power of attorney is exercisable only upon the delivery of certain statutorily specified affidavits to the third party (Florida Statute §709.08).

General Power of Attorney

A General Power of Attorney usually includes a list of the actions the attorney-in-fact is authorized to perform on behalf of the principal, and absent this restriction leaves the attorney-in- fact to his/her own discretion to perform any legal act on behalf of the principal that pertains to this designated list of allowed activities.

Limited Power of Attorney

A Limited Power of Attorney defines a specific task or action that the attorney-in-fact is authorized to conduct on behalf of the principal. For example, a limited power of attorney may authorize the attorney-in-fact to sell the principal’s boat and absent that limitation, the attorney-in-fact is given all power (incur expenses in the principal’s name, make promises on the principal’s behalf, etc.) to accomplish this task.

All Powers of Attorney cease to be valid immediately upon the death of the principal.

Florida Living Will – Not just for the elderly

If you become terminally ill, are in a persistent vegetative state, or suffer from an end-stage condition and cannot make medical decisions about your health care or cannot communicate your wishes, what kind of medical treatment would you want? A Florida Living Will ensures that your wishes will be carried out regarding end-of-life treatment.

Florida law recognizes your right to refuse medical treatment you do not want or to request treatment you do want in the event you lose the ability to make decisions yourself. A Living Will is a legal document that clearly states your end-of-life choices. It explains how you feel about the care intended to sustain your life, and whether you want to be kept alive by extraordinary life-saving measures or life-prolonging procedures.

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9.4Christopher John Atcachunas
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