When it comes to trust and estate planning in Florida, there are some basic areas of planning that can help avoid unnecessary confusion and expense for loved ones. Some of these concerns can be addressed in 3 easy Florida estate planning steps that you can take with little to no expense.
These simple steps can address a few major issues that commonly show up and avoid needless problems for your Florida estate plan. These 3 steps should NOT be considered a substitute for professional estate planning advice from an experienced Florida estate planning attorney. Every case requires expert advice because there are alternatives that may be highly favorable to these simple strategies depending upon your unique situation and estate specifics. Nonetheless, as a first step, the following moves are often helpful.
3 Easy Steps to Improve Your Florida Estate Plan Now
1. Check Your Beneficiary Designations On Insurance and Qualified Financial Accounts.
Insurance products have beneficiary designations and by default, many people do not complete the designation form and/or the form designates “the estate” by default. Qualified Financial Accounts such as 401k, 403b and IRA accounts also have beneficiary designations and this same problem arises. What often happens is that the “estate” becomes the designated beneficiary by default and this will require that the entire account go to the probate court rather than being immediately distributed to beneficiaries. A simple change in beneficiary designation avoids this cumbersome and expensive process.
2. Utilize Transfer Upon Death (TOD) or Pay Upon Death (POD) options for Bank Accounts and other Non-Qualified Financial Accounts.
Non-qualified accounts are accounts without unique tax treatment such as bank accounts (checking and savings), CDs, Mutual Funds and Stock Trading Accounts (not in IRAs). These accounts will be required to go to probate upon the death of the account holder unless they are joint (something that may not be wise depending upon circumstances) or the account includes a “Pay On Death” or “Transfer On Death” provision. A POD or TOD will designate a beneficiary upon the death of the account holder and most banks will provide this upon request.
3. Check Your Real Estate Titles and Other Vehicle Titles.
Real estate assets in Florida often only include 1 persons name on the title and this will often require a probate of the asset in order to transfer it to beneficiaries (heirs) upon the death of the real estate title-holder. Even husbands and wives may face retitling challenges if only 1 person’s name is on the title. In many cases, simply adding a spouse to title or another beneficiary will simply things dramatically. It is strongly recommended that this option be reviewed with a licensed estate-planning attorney due to the availability of numerous options for superior planning and asset protection such as the use of Florida LLCs and the Florida asset protection risks inherent in joint titling of assets with non-spouses. Vehicle title issues may or may not require probate (often depending upon the vehicle) yet it can still greatly simplify matters to think about the different titling options prior to the disability, incapacity or death.
As mentioned above, these 3 approaches can be as a good start to becoming intentional about your Florida estate planning process. I also makes sense to take the next step and obtain professional estate planning legal advice to identify whether more effective options such as living trust planning will benefit you. In most cases, revocable living trust planning in Florida is a superior approach using joint names or POD/TOD techniques because of the unexpected life events that can happen to mess up the latter approach and the asset protection risks that are associate with the former approach.
I encourage you to act immediately on applying these 3 steps. I also strongly recommend that you to obtain the professional legal advice that you deserve. To put your professionally designed Florida estate plan into action get started with your estate planning questionnaire here, give us a call or e-mail today.
Steve Gibbs, Esq.
This is an updated version of an original post dated May 1, 2015.