Article X, Section 4 of the Constitution of Florida provides protection against the claims of creditors for a person's homestead, i.e. their principal residence. In essence, if a homeowner owes money to a creditor, that creditor cannot attach or force sale of the residence in order to receive payment. The same concept applies if the owner dies owning a homestead. In other words, if a homeowner owes a creditor (such as a credit card, medical bills, etc.), when the person dies, the creditor usually cannot collect against the homestead. The homestead is exempt form the claims of creditors.
In today's era of on-line forms, office supply stores, and software, it is becoming increasingly more common for people to try to prepare their own estate planning documents. Whether it is a simple Durable Power of Attorney, a Living Will, a Last Will and Testament, or a Trust, there are plenty of ways that people can try to create their own estate documents. In our practice, we often see this result in an outright DISASTER!
Clients sometimes ask this question--often because they are confused about the relationship between their Will and their life insurance policy. After all, doesn't the Will designate a person's beneficiaries? This blog will clarify the relationship between the Will and life insurance.
When a person dies and a formal probate estate must be opened in Florida, the probate court will appoint a person to be in charge of the estate administration. In Florida, this person is known as a "Personal Representative." In other states, it is known as an "Executor" or "Administrator." In Florida, no one is authorized to act as Personal Representative until a probate court issues an Order appointing the Personal Representative. Simply being designated in the Will is not enough--an Order appointing the Personal Representative is required.
Not uncommonly, we have clients come into the office after a loved one has died and ask for some assistance. Their request is often simple...for example: "How do I access Mom's bank account now that she's gone? Her Will says I'm supposed to get it. Can I take the Will to the bank and get it transferred over to my name?" Unfortunately, it's not that simple.
If parents with minor children die, a Guardian will be appointed to raise and care for the children. Parents have the right to designate who will be appointed Guardian--so long as the parents do so before they die. If they do not, then a court will make the decision.
Florida, like many states, has a convenient statutory provision when it comes to dealing with tangible personal property (items such as jewelry, furniture, keepsakes, etc.) through estate planning.
There's an old expression: "All dressed up but nowhere to go!" This phrase has been interpreted to mean being completely prepared for an event that fails to materialize. This is sometimes true with persons who do a Revocable or Living Trust but fail to fund it. They are prepared to avoid probate but this objective--avoiding probate--fails to materialize because assets are not in the Trust at that time of death.
Your father has passed away and after the funeral, you try to locate his Last Will and Testament. You find a photocopy but not the original. You do a quick search on Google and find that in Florida, you need to establish the original Will in order to file a testate probate. Should you panic? In many instances, the answer is "no." In Florida, we have a process where you can "prove up" a lost or destroyed Will.
A traditional IRA is what is considered a "qualified" account. In essence, this means that the account gets special tax treatment---in particular, allowing you to defer taxation until a later date. With these types of accounts, you do not have to withdraw the money all at once. Many advisors refer to this as allowing you to "stretch" the distributions over time. Ultimately, this allows you to reduce income taxes which you must pay.