Wills and Trusts

Florida Last Will and Testament

Effective estate planning through the use of wills, and trusts prevents the time and expense of probating an estate. In probate administration, the court is involved in the passing of assets to the decedent’s beneficiaries. As a result, the probate process is public, time consuming, and can cause delay in distribution of assets at death. At such a difficult time in your life when grieving the loss of a loved one, the transfer of assets can be done privately and timely. We encourage our clients to establish an estate plan that avoids the additional costs and stress of probate administration.

A will is a legal document that outlines how you want to distribute your assets after your death. However, having a will does not necessarily mean you don’t have to probate an estate. A will and probate are two totally separate concepts. If you own property/assets in your own name without “designated beneficiaries”, the asset must go through probate regardless of a will. The probate process moves the assets out of the decedent’s name and distributes them to the heirs. These assets are called “probate assets” and they will be distributed in probate in accordance to the will.

In Florida, if you die intestate, or without a will, the Florida Probate Code will dictate who inherits your assets pursuant to its rules of intestate succession. The assets will be distributed in probate in accordance with Florida’s intestate statutes. It takes into account the degree of “closeness” a relative is to you by law to determine their share of your estate. Under these rules, a long time partner that is not your spouse would have no standing to inherit. Nor would your feelings about a relative be taken into consideration.

The Versatility Of A Trust

A trust is a fiduciary relationship where a third party, or trustee, holds assets on behalf of the beneficiary. There are different types of trusts that can be used to accomplish your goals. For example:

Revocable Living Trusts: Also known as an inter vivos trust, a revocable trust is the most common type of trust used in Florida. It is when the grantor (or person that settles the trust) retains their interest in the assets placed in the trust while they are living. This allows them to revoke or amend the trust at will. Only upon the death of the grantor are the assets in the trust dispersed to the beneficiaries. Revocable living trusts are a capable tool to utilize in the avoidance of probate.

Irrevocable Living Trusts: An irrevocable living trust transfers ownership of the assets to the trust. Once the trust goes into effect, it is not able to be revoked, nor are its terms able to be changed. This type of trust is useful in avoiding probate and keeping assets out of a taxable estate for the purposes of federal estate taxes.

Life Insurance Trusts (ILIT): An ILIT is an Irrevocable Life Insurance Trust that is commonly drafted as Crummey trusts. The trust can purchase the policy from its inception. Subsequently, when the insured dies, the proceeds flow directly into the ILIT and are not includable as an asset in the estate. This type of trust is ideal for taxable estates as the insurance proceeds can be used to pay federal estate taxes, as well as allocated to generation skipping transfer (GST) taxes.

Intentional Defective Grantor Trusts (IDGT): An IDGIT is a very important tool for estate planning as it allows for the freezing of the value of assets transferred into the trust. This is commonly known as “estate tax freeze” in which the asset can appreciate outside of the estate without being subject to federal estate taxes.

Contact TEPS LAW, LLC today to speak with a knowledgeable and experienced Florida estate planning and taxation lawyer. You can contact us online or by calling 954-710-9400 to schedule a consultation. We now offer additional options for your convenience. Virtual and telephonic consultations are now available by appointment.