No, but maybe yes. So I guess I could say “it depends.” If you die without a Last Will, then Florida law ‘has a Will for you!’ The Florida statutes contain a list of who gets what depending on if you’re married or not, have children with your spouse or children from another relationship or have no children, etc.
What does this really mean? If you are married to the same person (that is, not ever married to someone else) and that person dies, as the surviving spouse you are entitled to everything. If the two of you have children together, then you’re still entitled to everything. If your spouse dies and is survived by you and your spouse’s children, who are not also your children, then your share drops to one-half. If the two of you have children together, but your deceased spouse also had children from a prior relationship, then your share is one-half.
This sounds nice, except for the 50% reduction part, but still most times it’s what you might choose anyway. If you are OK with this plan, then do you really need a Will? No.Where the answer is less clear is if you are in a committed relationship; or have a minor child for whom a guardian may need to be appointed; or if you have one or more adult children from a prior relationship; or if you have no children (or descendants) or spouse. Each of these scenarios would put your estate into the hands of someone you might not have chosen and it’s certain that in each case, too, the cost of carrying out the plan set out in the Florida Statutes would be higher than if your directions were stated in your Will. If your situation looks more like these examples, then the answer to the questions “Do I Really Need a Will?” is “Yes!”
An unexpected medical emergency can happen to anyone at any anytime. Whether due to an illness or as a result of an unexpected circumstance, situations occur every day which render persons of all ages incapacitated and unable to make decisions for their own health care. Advance Directives is a group of documents that allow you to give someone the legal authority to make medical decisions for you, access your medical records, and carry out your instructions with regard to the types of medical treatment acceptable to you in an end of life care situation.
The documents that makeup these Directives consist of a:
1) “Designation of Health Care Surrogate” ( see Florida Statutes for a suggested form ), the document which allow the person you designated to make medical decisions for you and can include HIPPAA release language unless a free-standing HIPPAA release document is also being executed (HIPPAA stands for Health Insurance Portability and Protection Act which is a federal law that protects the privacy of a person’s medical records);
2) A “Living Will” ( see Florida Statutes for a suggested form ), the document that includes types of medical treatment you would or would not want in the event of you terminal illness, end-stage condition or being in a persistent vegetative state condition. Since tragedy does not discriminate and there is rarely advance warning about when a person will become incapacitated, obtaining these Directives as soon as possible is critical since without them, then you have no control over who will be the person tasked with making life and death decision on your behalf during a time of incapacity or near death. This could potentially mean that someone you don’t trust, or even a guardian appointed by the Court, could be appointed to make decisions on your behalf.
In addition, anyone who is the parent or guardian of a minor child, should execute a separate Designation of Health Care Surrogate for a Minor (see Florida Statutes for a suggested form) in order to authorize another adult to make medical decisions on behalf of your child in the event you (and anyone else with legal authority over your minor child) should become unable to make such decisions. Keep in mind that once your child becomes a legal adult, your adult child should also execute his or her own Medical Powers of Attorney in order to grant you or whoever they wish, the authority to make medical decisions on their behalf in the event of any incapacity.
Although you will always be your child’s parent, once a child becomes legally emancipated or attains the age of majority, you no longer have the same legal rights to make medical decisions simply by virtue of the fact that you are the parent. Therefore, whether an adult child goes off to college, takes off for a gap year, or continues to reside at home, adult children also need Advance Medical Directives in order for another person, including a parent, to make health care decisions on their behalf in the event of incapacity.
When people move to Florida they often ask whether the estate planning documents they signed in another state are valid in Florida. And generally, this is true. Where many run into trouble is presenting an out of state document to a local doctor’s office or trying to use a power of attorney document from out of state to complete the sale of real estate. Since the Last Will doesn’t become valid until after death, testing it ahead of time isn’t possible.
In a Last Will, there may be provisions that are in conflict with Florida law or would be governed in its home state by laws that Florida doesn’t have, such as community property. Some other examples are:
- Florida does not allow Holographic (i.e., handwritten but without proper witnessing) or noncupative Wills (oral Wills).
- Florida law requires that a Personal Representative designated in a Will must be either a person related as stated in FS 733.304 ( generally, related by blood) or a Florida resident.
- If a Last Will does not include a self-proving Affidavit after the Testator/Testatrix’s signature, Florida law requires that the witnesses be located and give an Oath as to their presence at the time of signing of the Will and other execution formalities – this become much more involved with an out of state Will and requires an opinion letter from an attorney licensed to practice in the other state as to the Will’s validity.
- If more than $15,000 (or an asset worth at least that) is devised to a minor, Florida law requires that a guardianship be established with Court supervision, even if this is not the case in the state where the Will was created. Florida guardianship is expensive to open and administer.
- Florida law does not allow a spouse to devise his/her homestead in a Will or Trust to anyone other than his/her spouse - Florida has very strict (and unusual) laws about how one’s homestead can be devised when there is a spouse or a minor child.
Therefore, certain provisions or devises may affect the validity of your prior Will in Florida. For this reasons, even if your Will is valid in the state in which it was executed, consulting with an experienced estate planning attorney is very important when you move to Florida to determine the best course of action.
Reviewing your Will periodically is always in your best interest, since life happens and circumstances often change. The persons you named as beneficiaries or as (executor) Personal Representative may have died or become incapacitated or you may have simply changed your mind about these designations.
Since you want to ensure that your current instructions are reflected in your estate planning documents, you should plan to meet with an experienced estate planning attorney to ensure the validity of the provisions of your out of state Will in Florida and that your prior instructions are in line with your current wishes.
Estate plans of owners of rental real estate should include establishing an Limited Liability Company (“LLC”), inasmuch as Florida multi-member LLCs offer asset preservation that is superior to an “S” or “C” Corporation (named for those sub-chapters of the Chapter 1 of the Internal Revenue Code). This is because when a judgment is obtained against an LLC, the judgment creditor, according to Florida law, gets only some specific rights of ownership, not 100% of them.
Even if you are already involved in a lawsuit regarding your rental property, the fact that the rental property is involved does not, in and of itself, preclude transferring it into an LLC. However, if a court determines that your transfer of the rental property into the LLC was done with the intent to defraud a potential creditor, the court may deem it a “fraudulent transfer” and unwind the transfer. Therefore, if you own rental property, you should give serious consideration to transferring it into an LLC before a threat arises.
Rental property owned in another state can be conveyed (with a new deed) by an attorney licensed in the state where the rental property is located, to a Florida LLC, provided the laws of that other state do not prohibit such a transfer. However, certain states require that documentation remain on file in the state where the real property is located, such as registering the Florida LLC as a foreign LLC, filing an annual report, and paying any required fees.
For the “Do-it-Yourselfer:” if any of your rental properties are mortgaged, you will need written approval from the lender, authorizing the deed transfer to the Florida LLC, prior to the proposed transfer. If you are unable to obtain lender authorization for your transfer, you might consider taking the equity out of another property, using those proceeds to pay off the mortgaged property and then transfer the unencumbered property into the LLC.
Although “single-member” LLCs are valid in Florida, they do not offer the same protection as a multiple-member LLC. Even if one member holds the overwhelming majority interest (i.e., 98%), and the other holds a minority interest (i.e., 2%), this is sufficient to create a multi-member LLC.
As part of your estate planning, your revocable living trust would hold your ownership units in your LLC and upon your death, your trust would provide instructions for how to distribute those units. The LLC may also have a Member Operating Agreement to control the units on death, divorce or disability so it’s important that your testamentary document (Will or Trust) and the Operating Agreement are consistent.
If you are unmarried, please repeat after me. . . “I will have a Prenup
before I get married.” Repeat again. This is the only way to protect your
assets, including your LLC, from a future ex-spouse.
Many attorneys base their fees on an hourly rate for this type of work. While the attorney fees to establish an LLC can vary, some of the current approximate costs are as follows: 1) $125.00 – initial filing fee for Articles of Organization and naming a registered agent for service of process; 2) $90.00 - LLC Corporate Book, when kept up to date, satisfies the requirement of keeping corporate formalities when operating a legitimate business in Florida); 3) $138.75 – annual filing fee for the Annual Report with the State of Florida. Some of the services an attorney might provide are: obtaining a tax ID number (EIN), guiding you in opening a business checking account; drafting an Operating Agreement, Organizational Meeting Minutes and Annual Meeting Minutes.
Owners of rental property in Florida should be concerned about someone on the property being injured or worse. A Limited Liability Company (LLC) for each rental property is a solid tool for protecting property owned outside of a particular LLC.
A Prenuptial Agreement (Prenup) is a contract between two persons who intend to marry one another and is used to keep some (or all) of assets separate after marriage, in the event of divorce and death. It’s a very important document in Florida since it’s a way to preserve assets for the benefit of persons other than a spouse - such as adult children from a prior marriage or relationship. Without a Prenup, each spouse’s assets upon death and/or divorce, will be distributed according to Florida law, which oftentimes is not at all what they might choose. With a Prenup, the couple are each able to decide how to distribute the assets between themselves as well as to other beneficiaries, upon death and/or in the event of a divorce.
On marriage each spouse assumes legal rights and responsibilities, many of which they may have no knowledge. Among those is a right found in the Florida Constitution, which protects each spouse’s homestead from forced sale by a creditor. This is so that a person won’t be without shelter. Florida has one of the strictest protections available. This means, if you own your home as the “sole owner” on the deed, and then marry, your new spouse acquires a right in that home, unless you both enter into a Prenuptial Agreement that changes that right. Also, without a Prenuptial Agreement, your new spouse’s signature is required in any transfer of that property even if your spouse is not in any way an owner.
In addition to rights in a deceased spouse’s homestead, a new spouse also acquires the right to elect to receive 30% of the deceased spouse’s “Elective Estate,” which includes both probate and non-probate assets. Practically, this means that even if you have a Last Will or a Revocable Trust in which you left your entire estate to your children, your spouse could elect to take 30% first. If your Last Will is dated before the marriage, your spouse may receive up an even larger percentage of your estate.
The surviving spouse has the right to claim the greater of the two, as between the Elective Share or "Pretermitted" Spouse Share. On the other hand, if you made a Will and/or Trust after you married, but still failed to provide for your surviving spouse when devising your assets including your homestead (even if purchased by you before marriage to your surviving spouse), then your surviving spouse will have acquired homestead rights for life and may also elect 30% of your elective estate.
In addition, a surviving spouse also has the right to claim some property and also a family allowance. The property right entitles the surviving spouse to furniture, furnishings and appliances from the residence of up to $10,000, any automobiles held in the name of the deceased spouse being used by immediate family, and the deceased spouse’s interest in certain contracts. The family allowance right gives the surviving spouse a claim for up to $18,000). Lastly, a surviving spouse is also given preference in appointment as personal representative of an intestate estate even when this might not have been the deceased spouse’s choice.
A properly drafted Prenuptial Agreement that includes a Waiver of Homestead Rights and Elective Share Rights, together with a properly drafted Estate Plan are vehicles that will protect your estate for the beneficiaries of your choice after your death, enabling your assets to be distributed in accordance with your wishes.