What You Need To Know About Estate Planning

I. Intestate Succession
Occurs when a person (decedent) dies without a will or without a valid will. His or her property will be distributed pursuant to state law.

II. Wills

A. Florida
Florida requires that the will be signed at its logical end.

B. Self-Proving
Attached as the last page of the will, the Testator or the Testatrix again sign the will, witnesses again sign and the document is notarized. The will is presumptively valid; Personal Representative will not have to look for witnesses.

C. Disinheritance

1. Spouse - May be disinherited, but spouse can elect to take 30% of the estate (unless spouse waived that right by a valid ante or post nuptial agreement). Common law or religious marriages are not recognized in the State of Florida.
2. Children - If born before the execution of the will may be disinherited completely. Children born after may elect to share in the estate. Legally adopted children share just like natural born children in the estate of adoptive parents.

D. Personal Representative (Executor)

1. Administers the estate, disposes of property, sees that the Testator's wishes are carried out. The Personal Representative may be anyone who is competent, over 18, and a resident of the State of Florida. If a non-resident is Personal representative that person may be a:

   a. spouse
   b. blood relative
   c. spouse of a blood relative

2. Trust companies whether or not located within the State of Florida may be a Personal Representative.

III. Domicile
Domicile is the Intent of the person to make a particular place his permanent residence. Purpose of establishing domicile is to help prevent more than one state from imposing income, estate and/or gift taxes on an individual.

IV. Taxation

A. Florida:
Florida has no personal income tax, no inheritance tax and as of 2006, no intangible tax on stocks, bonds, etc.

B. Composition of Estate
ALL Property that you own on the date of death is included in your estate. Exceptions to taxation are:

1. The Unified Credit
In 2010 there is no unified credit,and no estate tax. However, the step up in basis for assets is limited. 4.3 million dollars for a spouse or 3 million dollars to a spouse and 1.3 million for everyone else. The Unified Credit may come back dependent on Congressional leglislation in 2010. If not, estates over 1 million dollars will be taxed at 45% in 2011. 

2. Marital Deduction(still true for 2010)
The Marital Deduction is UNLIMITED, meaning a spouse can leave the entire estate to the surviving spouse tax free, however there can be severe tax consequences on the death of the second spouse, who will not have the benefit of this unlimited deduction.

C. Gifts
Effective January 1, 2010, a person may make a gift of a present interest of up to $13,000.00 per person or 26,000.00 for a joint gift, without having to pay a gift tax. This amount will be indexed for inflation on an annual basis.

D. Revocable Living Trusts
The Revocable Living Trust is an excellent tool to use in order to avoid probate. It is superior to holding property jointly, as will be discussed below. The Revocable Living Trust avoids probate because once you transfer proerty to the Trust, the Trust owns the Property and a Probate is avoided. Upon your death, the property passes to your heirs, free and clear of probate and the expenses and delays attributable to probate.

On the other hand, jointly held propery also avoids probate, but jointly held property is subject to the co-tenant's creditors. Therefore, if you hold property in joint name with your heirs, you could be subject to your heirs' creditors taking the property which you consider to be your own during your lifetime. In addition, after the death of a joint tenant, a Probate will be needed to pass the property when the survivor dies. This is avoided by use of a revocable trust.  

For married individuals, jointly held property will ruin your estate planning by over funding the marital deduction which will be included in the surviving spouse's estate. Therefor, I do not suggest jointly held property in order to avoid probate.

Should you wish to discuss your personal legal matters with Mr. Eisenberg, you can E-mail him at: