For those who pass away without having executed a valid will (also known as dying intestate), their estates will be divided and distributed by a probate court in accordance with Florida law.

Below we’ll address some of the most common scenarios and explain how the estate will be divided.

What happens if you were married at the time of your death and:

• You have no descendants (children, grandchildren, etc): Spouse gets 100%.
• You have descendants all of whom are also descendants of your spouse (also known as descendants in common): Spouse gets 100%. (Prior to 2011, in this scenario the surviving spouse would be entitled to the first $60,000 of the estate with the remaining balance split evenly between the spouse and the children. Please be aware that this is no longer the case as many online resources have not been updated to reflect this change.)
• You have descendants from a previous relationship: Spouse gets 50% and your descendants get the other 50%.
• You have descendants in common with your spouse but your spouse has children from a previous relationship: Spouse gets 50% and your common descendants get the other 50%.

What happens if you were unmarried at the time of your death and:

• You have surviving descendants (children, grandchildren, etc.): Descendants inherit 100%
• You have no descendants: The court will search for an eligible heir. The court will first look for parents, grandparents, and siblings before moving on to aunts and uncles, nieces and nephews, and cousins.
• You have no descendants and have no eligible heirs: If the court cannot find an eligible heir, the entirety of your estate will escheat, or become property of the State of Florida.

How are the shares of children and other heirs determined?

Florida has adopted a per stirpes distribution system where each eligible heir will receive an equal share of your estate. If, however, one of your potential heirs has already passed away (aka ‘pre-deceased’ in legal terms), then his or her descendants will split that share equally. Here’s an example:

Luke has 2 children, Mark and Jennifer, and 2 grandchildren, Charles and Danielle. Jennifer is the mother of both Charles and Danielle. Luke passes away unmarried never having drafted a will. Per Florida law, upon Luke’s death Mark is entitled to 50% of Luke’s estate. Jennifer is entitled to the other 50% but, sadly, she passed away 3 years prior. Under a per stripes distribution, Jennifer’s share is passed down equally to her descendants, Charles and Danielle. Ultimately, Mark receives 50% of Luke’s estate while Charles and Danielle each receive 25%.

Other Considerations

Adopted Children: Children you have legally adopted will inherit as if they one of your biological children. Children that you foster or have not formally adopted, however, are not automatically eligible to inherit.

Children you have put up for adoption: If a child you have put up for adoption has been formally adopted by a non-family member, they are not entitled to inherit from your estate. However, if that child has been adopted by certain close relatives, they remain eligible.

Unborn children: If a child was conceived by you, but has yet to be born prior to your death, they are recognized as descendants and are eligible for a full share.

Non-U.S. nationals and undocumented heirs: An eligible heir is entitled to his or her share of your estate regardless of nationality or immigration status.

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If you’d like to discuss drafting or updating your will, we invite you to set up a free initial consultation.

While trusts are often associated with the super-wealthy, the fact is they can be excellent estate and financial planning tools for anyone looking to provide for family, friends, charities, even their favorite pet.

What Are Trusts?
A trust is a legal entity that can own and manage assets for the benefit of a certain person or group of persons, known as the trust’s beneficiaries. Created by a grantor, trusts can do a number of things including owning assets, making investments, and distributing payments to beneficiaries. Of course, trusts can’t do these things by themselves; they are done on the trust’s behalf by its trustee, or manager, who is legally bound to oversee the trust according to the rules set out by the grantor.

Trusts come in a number of forms, each designed to accomplish different objectives. Every trust also has unique tax, asset protection, and estate planning consequences. Here are a few of the many options worth discussing with your attorney:

Revocable Living Trust:
A revocable living trust can be an effective way to manage your assets during your lifetime and dictate how those assets will be distributed once you pass away. Here’s how they work:

1. Working with an attorney, you create the trust and choose a trustee. You can serve as the trustee or designate someone else to do so.
2. Next, you fund the trust by transferring ownership of your assets to the trust. This can include a host of things such as real estate, precious metals, patents, and stocks.
3. Then, as the trustee, you are free to manage the trust’s assets however you choose. They can be sold, leased, mortgaged, or given away. If you opt to name a trustee other than yourself, the terms of the trust can be designed to permit you to withdraw assets from the trust at any time.
4. Since the trust is revokable, its terms and conditions can be altered at any point and can be completely disbanded if you change your mind.
5. When you become unable to manage the trust’s assets (whether through incapacitation or death), the successor trustee that you’ve chosen will assume control of the trust and distribute its assets in accordance with your wishes.

Living trusts can provide a number of benefits that a simple will cannot. For example, if avoiding probate is a priority, any assets held by your trust are considered non-probate assets and will not require court administration. Also, unlike probated wills which are public record, the details of your living trust (assets held, distributions, etc.) will remain private upon your death. Finally, having a living trust may help you avoid guardianship (link) in the event you are incapacitated.

Special Needs Trust:
Special needs trusts are designed to help disabled and special needs individuals remain eligible for asset-tested government benefits (most commonly Social Security SSI and Medicaid) while still receiving supplemental income to purchase goods and services not covered by public assistance programs.

Generally speaking, there are two types of special needs trusts: third-party and self-settled. Third-party special needs trusts are funded completely by people other than the special needs individual, who is named as the trust’s beneficiary. Self-settled trusts, on the other hand, are ones funded by the special needs individual’s assets, typically received through inheritance or personal injury settlement. When carefully managed, both third-party and self-settled trusts provide for special needs individuals without having the purchases and disbursements deemed ‘income’ by federal benefit programs.

To learn more about how you can protect disabled or special needs family members, see the tab below in the FAQ.

Qualified Income Trusts:
Qualified Income Trusts (QITs) are irrevocable trusts designed to assist individuals who would like to take advantage of Medicaid’s long-term care benefits (such as in-home and nursing home care) but have monthly income that exceed the program’s financial eligibility caps ($2199.00/month as of early 2016).

Each month, any income you receive over and above the $2199.00 threshold will be deposited into the trust. Upon your death, the proceeds of the trust will be used to satisfy any patient responsibility for your care. If any assets remain, Florida Medicaid is entitled to reimbursement for payments made on your behalf.

While qualified income trusts can be a great help to the elderly or disabled, they do have strict rules regarding payments and the types of accounts the trust assets must be deposited in. A trustee’s failure to abide by these regulations can result in a temporary loss of much needed benefits. Given what is at stake, consulting an estate planning attorney is recommended.

Life Insurance Trusts:
Life insurance trusts are irrevocable trusts funded by the proceeds of your life insurance policy. These are particularly useful tools for high-net worth individuals seeking to reduce federal estate lax liability. That’s because, since the trustee purchases the policy and the trust is named the beneficiary, the policy payout is not considered part of your estate. This can result in a significant tax savings. And, since you decide how the trust will be administered, life insurance trusts can give you added piece of mind that your loved ones will be provided for.

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Please bear in mind that trusts are complex legal documents that must comply with an array of rules and regulations to operate effectively. If you’d like to discuss whether a trust is right for you and your family, we invite you to set up a free initial consultation.

Individuals with special needs family members face a unique challenge: not only must they determine how best to support their loved ones today but, more importantly, well into the future. Here are just two of the many tools that can be used to craft a comprehensive estate plan that will ensure your special needs child, sibling, or spouse will be well provided for.

Special Needs Trusts:

Special needs trusts are designed to help disabled and special needs individuals remain eligible for asset-tested government benefits, most commonly Social Security Income (SSI) and Medicaid, while still receiving supplemental income to purchase goods and services not covered by public assistance programs.

Generally speaking, there are two types of special needs trusts: third-party and self-settled. Third-party special needs trusts are funded completely by people other than the special needs individual, who is named as the trust’s beneficiary. Self-settled trusts, on the other hand, are funded by the special needs individual’s assets, typically received through inheritance or personal injury settlement. When carefully managed, both third-party and self-settled trusts provide for special needs individuals without having the purchases and disbursements deemed ‘income’ by federal benefit programs.

ABLE Accounts

ABLE accounts (named after the federal Achieving a Better Life Experience Act) provide a tax-free investment and savings option designed to encourage special needs individuals and their loved ones to set aside funds for their care and wellbeing. They can be used effectively as an alternative to, or in conjunction with, a special needs trust.

What makes ABLE accounts particularly beneficial is that any money contributed to these accounts is not subject to income or gift tax restrictions and is generally disregarded when determining initial or continuing eligibility for Medicaid and SSI. Funds can be withdrawn from the account at anytime and used to pay Qualified Disability Expenses such as housing, travel, education, and assistive technology.

ABLE accounts, however are not without drawbacks: they have restrictive eligibility requirements and, once the special needs individual passes away, Medicaid can recoup payments made on his or her behalf from the account’s remaining balance.

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To discuss whether these estate planning options are right for your family, we invite you to set up a free initial consultation.

Healthcare advanced directives are documents that specifically outline your wishes regarding medical treatment in the event you are unable to make or communicate your desires. Needless to say, advanced directives are an important component of a truly comprehensive estate plan. Here’s an overview of the advanced directives recognized in the state of Florida.

Living Wills:

Florida law recognizes and respects an individual’s right to make decisions regarding their own healthcare, including whether to refuse life-prolonging treatment when suffering from a late-stage or terminal condition, or are in a persistent vegetative state. A living will is the document that clearly expresses your wishes regarding this select set of circumstances. Living wills enable you to retain your bodily autonomy even when you cannot express your wishes and ease loved ones in a difficult time, removing the burden of having to make such critical decisions.

To ensure your decisions regarding end-of-life care are respected, it’s best to file a copy of your living will with your physician, provide copies to trusted family members, and to your attorney. You may also want to keep a card in your wallet or handbag that states you have a living will and where it can found. For extra protection, you may consider hiring a document transmission service that will email or fax your living will 24-hours a day to the healthcare facility of your choosing.

Healthcare Surrogate Designation:

A ‘designation of healthcare surrogate’ is a legal document that enables an individual (or principal) to authorize another person to make healthcare decisions on the principal’s behalf. If a principal chooses, he or she can also include specific treatment instructions that the surrogate must abide by.

Traditionally, healthcare surrogates were unable to act on a principal’s behalf prior to a finding of incapacity. This requirement created difficulties, particularly in situations where healthcare decisions needed to be made quickly or where the principal’s capacity fluctuated. In response, Florida law was recently changed to permit a healthcare surrogacy to be effective immediately. As a result, a principal has the option to draft the surrogate designation document in either manner. Whichever type is selected, so long as the principal is competent, his or her medical decisions are controlling over the suggestions of the surrogate. In these cases, a surrogate can provide valuable support, help a principal understand and appreciate the complexities of medical treatments, and assess alternatives. Surrogacy designations can be revoked or altered at any time.

Healthcare Power Of Attorney (POA):

POAs are documents that permit a principal to choose another individual (or agent) to act on their behalf in a given situation. These can range from authorizing an agent to do a specific act (such as sell property on the principal’s behalf) to assigning responsibility for all of your affairs to the agent. Generally speaking, once a power of attorney is executed, the agent was immediately empowered to act for the principal.

In the healthcare context, POAs were a popular option because they were able to drafted in such a way that they would not take effect until the principal was incapacitated (known as ‘springing’ POAs). However, ‘springing’ POAs drafted after 2011 are no longer effective. As a result, the healthcare surrogate designation is sufficient for many Florida residents.

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To find out more about healthcare advanced directives, and to discuss which ones are right for your needs, we invite you to set up a free initial consultation.