Unlike other states, Florida law permits an individual to completely disinherit anyone, family members included. There are, however, two major exceptions: the surviving spouse and certain surviving children.

Absent a valid pre or post-marriage agreement to the contrary, a surviving spouse is entitled to a host of rights to the decedent’s estate including: homestead rights, the right to an elective share of the decedent’s estate, a family allowance payment, and a right to certain creditor-exempt property. With the exception of the elective share, a decedent’s children may also be eligible to claim these portions of the deceased’s estate.

Homestead Rights

The Florida Constitution strictly limits an individual’s ability to devise (to transfer through a last will and testament) his or her homestead property to someone other than a surviving spouse or minor child. A surviving spouse is entitled to no less than a ‘life estate’ in the property (meaning the spouse is able to use and enjoy the property while alive. Once he or she passes away, it is transferred to another party, know as the remainder beneficiary.). ‘Life estate’ arrangements can create difficulties, however. That’s because remainder beneficiaries have a legally recognized interest in the property. For example, they have a say in how the property is maintained, managed, and whether it can be sold. As such, many surviving spouses found themselves forced to keep the homestead property, be responsible for the majority of the expenses, but could not opt to sell the property without the approval of the remainder beneficiaries.

In response to this problem, Florida amended its homestead protections in 2010, allowing a surviving spouse to elect to accept a 1/2 share of the property as a ‘tenant in common’ with the deceased’s lineal descendants. As a ‘tenet in common’, each owner shares financial responsibility for the property equally and either party can bring about a sale of the property, with each party taking their respective share of the proceeds. While surviving spouses have six months from the date of the decedent’s death to file for ‘tenant in common’ status, this deadline can be easily missed as there is no notification requirement for this election.

Elective Share

Surviving spouses are entitled to a 30% elective share of the decedent’s estate regardless of the provisions in the decedent’s will. In determining the amount of the elective share, courts take into account both the decedent’s probate estate and a wide array of non-probate assets, such as payable-on-death (POD) accounts, revocable living trusts, and jointly owned real estate. While the decedent’s debts reduce the available elective share, administration fees associated with the estate do not.

The filing deadline for the elective share is the earlier of (1) six months from the service of a Notice of Administration on the surviving spouse or, if the surviving spouse was not properly noticed, (2) two years from the date of the decedent’s death.

Family Allowance

In order to provide a measure of financial support while the probate process is being completed, the surviving spouse and/or minor children can claim a family allowance of up to $18,000. Importantly, Florida’s family allowance payment takes precedence over creditor claims. So, if a decedent had assets totaling $30,000 and debts of $22,000, because the family share takes precedence, the family would receive $18,000 while creditors would only be entitled to claim the remaining $12,000. Eligible family members may request the family allowance any time during the administration of the decedent’s estate and the funds may be paid in a lump sum or in installments.

Exempt Property

The Florida Probate Code also permits a surviving spouse (or, in the absence of a surviving spouse, the decedent’s children) to claim certain property from the decedent’s estate free from claims of creditors. These include two automobiles, prepaid tuition programs, household furnishings up to $20,000, and certain state teacher’s death benefit. That said, Florida law does permit the decedent’s will to devise these items to someone other than a spouse or child.

A petition for exempt property must be filed by the later of (1) four months after being served with a Notice of Administration or (2) forty days after the close of any court proceedings related to “the construction, admission to probate, or validity of the will or involving any other matter affecting any part of the estate.”

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Surviving spouses and children (see above) aren’t the only ones with legitimate claims to a decedent’s estate: creditors and the Internal Revenue Service (IRS) may also be involved. Here is what you can expect:

Creditors

Creditors are entitled to collect a debt from a decedent’s estate for a limited period of time and any valid debts must be settled before distributions to beneficiaries can be made.

In order to close out creditor claims, the personal representative (or executor) of the estate must comply with certain legal requirements. First, he or she must publish a notice in a local newspaper, informing creditors that they have a limited time to file a claim against a decedent’s assets. Next, for routine debts the personal representative can file a Proof of Claim with the court, outlining which debts that the personal representative has paid or intends to pay. For remaining creditors, the personal representative must send notice to any creditor that is “known or reasonably ascertainable.” Creditors who have been served with notice have thirty days from receipt to file a claim. Creditors who do not respond within that timeframe forfeit the right to collect the debt. Failure to properly notify a “known or reasonably ascertainable” creditor will extend the period they have to make a claim to two years. Keep in mind that notifying a creditor isn’t an admission that the debt is valid, it’s simply informing them that they have a limited time to make a claim on the decedent’s estate. The personal representative is also tasked with disputing any creditor claims that appear invalid.

IRS

A decedent’s estate must also make final arrangements with the Internal Revenue Service (IRS). First, the personal representative must file two documents: a final 1040 form, reporting any income accrued during the decedent’s last tax year, and Form 1041, which discloses the estate’s taxable income. Other documents will be filed as applicable, including Form 706 (Federal Estate Tax Return) and Form 709 (Federal Gift Tax Return). The estate’s personal representative is also tasked with settling any back taxes the decedent may have owed, and filling any past returns which the decedent neglected to file. Any outstanding tax obligations will be paid out of the decedent’s probate assets.

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There may come a time when a loved one can no longer competently manage their affairs or properly care for themselves. To ensure that an incapacitated individual, or ward, receives the advice and assistance they require, Florida courts are empowered to appoint a guardian to act on a ward’s behalf. This legal process is known as guardianship.

How does the guardianship process work?

Anyone who has concerns over another’s wellbeing can petition a court to initiate guardianship proceedings. Once received, the court will appoint a three-member panel of experts to examine the individual. This review will typically include a physical examination, a mental health assessment, and an assessment of the individual’s ability to complete tasks necessary for daily living. Each panel member will then submit a report for the court’s review, outlining their findings and recommendations. If the majority finds that the individual is not incapacitated in any manner, the guardianship petition is dismissed. If, on the other hand, the panel determines that the individual is incapacitated to some degree, the court will conduct a hearing to determine extent of the deficit and, if necessary, appoint a guardian.

Every individual alleged to be incapacitated is entitled to the assistance of an attorney during this process. This can be a court appointed lawyer or one chosen by the allegedly incapacitated individual.

Is guardianship all or nothing?

Because guardianship is a serious infringement of a ward’s personal liberty, it is generally viewed as a last resort. In fact, courts are required to impose the least restrictive measures necessary to protect the ward’s interests. For instance, if an individual is capable of caring for themselves but is unable to competently manage their finances, then a limited guardianship would be appropriate. For individuals who are fully incapacitated, a court may impose a plenary, or complete, guardianship.

Planning for incapacitation and avoiding guardianship

For incapacitated individuals, an honest, dedicated guardian can be a life-saver. That said, the system does not always work as intended: several Florida newspapers have done excellent work exposing some of the serious failures of our state’s guardianship system. In response to these stories, the Florida legislature enacted what is believed to be the first of several rounds of reform of the guardianship system.

The lesson to be learned is that the best way to protect yourself and your family is to plan ahead. This can include setting up a living trust, clearly articulating your wishes regarding healthcare through advanced directives, and naming a pre-need guardian.

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If you’d like to discuss guardianship in more detail, and learn what it could mean for you or a loved one, 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.