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.
However, if you die
with multiple state residence, each state (such as Florida
and New York) may impose a tax, but you will receive only
one state credit.
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
The Unified Credit is equivalent to a deduction on estate
taxes up to $2,000,000.00 at the current time. This amount
will increase, for further details see the tax
changes link.
2.
Marital
Deduction
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, 2006, a person
may make a gift of a present interest of up to $12,000.00
per person or 24,000.00 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, because 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 property.
This could happen whether your heirs
end up being in an automobile accident and being sued, having
a business setback and going into a bankruptcy or being
in the middle of a divorce proceeding.
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.
The Revocable Living Trust avoids probate
and does not have the same problems as is associated with
jointly held property. The property is owned by the Trust.
However, upon your death, the property automatically goes
to your heirs, free and clear of probate and the expenses
and delays attributable to probate.
Should you wish to discuss
your personal legal matters with Mr. Eisenberg, you can E-mail him at: