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Non-Traditional Estate Planning in Florida

The definition of “family” has expanded to become more inclusive over the past 25 years to include many variations in lifestyle. For those who live a non-traditional lifestyle, the importance of non-traditional estate planning in Florida may be even greater than for traditional families.

A non-traditional family may involve a couple living in an unmarried relationship. A blended family with children from previous relationships may also require non-traditional estate planning in Florida, such as planning for unmarried partners.

The unique circumstances that arise with any non-traditional planning require special attention to detail and nothing can be taken for granted.  As a result, Florida estate planning for these circumstances has evolved to offer special solutions and planning options.

Non-Traditional Estate Planning Worksheet

The THREE MOST COMMON SCENARIOS for non-traditional estate planning in Florida involve:

  1. blended (re-married) families joined due to divorce or death
  2. divorced people in second (or third) marriage desiring to protect wealth
  3. unmarried cohabitants (includes same sex couples)

1.  Florida Estate Planning Challenges for Blended Families

Getting a divorce creates a need for non-traditional estate planning in Florida. When divorced partners come together to create a new family unit, a number of unique estate planning issues arise. One of the big concerns is always to provide for one’s own children from the previous marriage while also taking care of the new spouse.

Blended families require special attention and strategically using a Florida revocable living trust may be invaluable.  Using a Florida revocable living trust is usually the best way to limit the ability of the new spouse to undo the estate plan while also preserving a portion of the estate for the children of the prior marriage.

Other blended family estate planning matters include adoption of a child (or adult for various reasons) or providing for stepchildren. Often, spouses in a second marriage maintain separate financial accounts and are less integrated than partners in first marriages.  All of these concerns set the stage for issues that may only be addressed with a solid Florida estate plan that is up to date AND addresses these kinds of unique concerns.

One of the most confusing and critical issue that faces blended families in Florida is are the rights and obligations related to Estate Planning and Florida Homestead Protection.  The issues related to Florida Homestead could easily fill a separate article, so to summarize, a spouse and minor children have homestead rights regardless of what the estate plan says.  Thus, homestead real property should be jointly owned by couples (married or unmarried) in many cases to avoid issues upon the death of a spouse. This is especially the case in blended families where there is higher likelihood of kids from a prior marriage disputing the new spouse’s right to assets.  Homestead also creates issues when conveying Florida homestead property to trusts to avoid probate.

2.  Florida Estate Planning Challenges for Divorced People

Many divorced people, especially females – at the risk of sounding politically incorrect, come from relationships where they left the bulk of the financial responsibility to the former spouse. With blended families, estate planning for each spouse may be quite different for the reasons discussed above.  The most significant concern with divorced couples engaging in new planning is the potential for conflicts of interest due to children from prior marriages.  It is therefore important for the estate planner to consider the needs of each spouse individually. The independent needs of each spouse are important when considering who the appointees of each spouse will be.

Various roles estate planning roles should be considered such as a Florida durable power of attorney, Florida advance healthcare directive, and a  Florida guardianship declaration. Remember, in second (or third) marriages, the appointees for each spouse may be different for each spouse for obvious reasons. This isn’t always the case with traditional families.

In traditional families, particularly where couples were married younger, the majority of the spouses relationships have been formed together and thus the spouses are more likely to appoint the same people for various fiduciary roles.  

There is a also greater likelihood for conflicts of interest in blended families. Both families may need to be represented by separate estate planning attorneys if too many conflicts arise.

3.   Florida Estate Planning For Unmarried Couples

The art of estate planning is to use the strategies available under the law in the most effective manner to achieve your personal goals.  Just as no two people are the same, no two estates are the same.  And no two estate plans should be exactly alike, either.  Cookie-cutter templates might sometimes help with the basics, but, in the end, as I’ve cautioned about do-it-yourself (DIY) estate plans in Florida, your estate plan should be fitted to your unique situation and objectives.

Individuals in non-traditional living arrangements need to pay special attention to their estate plans.  Many laws and legal concepts have been around for centuries, and default assumptions are often geared toward traditional nuclear families.  But, as we all know, not everyone is married with 2.5 children and a spotted dog behind a white-picket fence (not that there’s anything wrong with that!).

Today, it’s not uncommon for two adults to live together in a long-term committed relationship without ever officially getting married.  However, absent an individualized estate plan, a lifelong unmarried romantic partner has no inheritance rights in most cases.  This can sometimes lead to results that not only seem unfair, but also make little sense in the situation.

Asset Ownership Issues for Florida Unmarried Couples

Under Florida law, surviving spouses have robust inheritance rights in a decedent spouse’s estate.  However, those rights are not afforded to unmarried partners, who, in the absence of an estate plan, generally do not have any inheritance rights.  So, when unmarried co-owners own property together in Florida, they need to take special care to ensure that lawful title to assets is properly documented and that both estates are appropriately planned to achieve the couple’s desired outcomes.

When no Florida last will or comparable estate-planning instrument is present, assets pass according to Florida’s intestate succession laws.  Basically, surviving spouses and children have the strongest claims, followed by parents, siblings, and other close relatives.  This system provides a certain level of predictability in conventional settings, but it can cause problems for people in long-term romantic relationships but who are not legally married.

Absent careful planning, a surviving long-term partner often discovers that he or she does not have any legally recognized rights in property that has been effectively shared but is not officially co-owned.  Even when assets are legally co-owned, you need to make sure the form of joint ownership eventually leaves title where you want it to be.

Let’s say, for example, an unmarried couple have lived together in “their” house for twenty years, but only one name is actually on the deed.  If the property’s legal owner dies—and she doesn’t have an estate plan providing otherwise—the home will be inherited by her closest living relatives, and not by the long-term life mate who has been sharing the home and helping to pay the mortgage for the past two decades.

On the other hand, let’s say both their names are on the deed as joint tenants in Florida.  Upon the first death, the survivor inherits the property—so far, so good, right?  However, when the survivor passes on (absent an effective estate plan), his or her closest living relatives inherit 100% title to the property.  But the earlier-deceased partner’s family doesn’t have any claim to the property.  That can be a problem if the couple wanted both of their families to benefit from their estates.

In some jurisdictions, “common law marriage” provides a work-around for some long-term couples who never officially tied the knot.  Common law marriage is the concept that, if a couple live together long enough, they are effectively a married unit, with most rights (including inheritance rights) that entails.  The State of Florida does not recognize common law marriage.  So, in Florida, a couple is not “married” unless they have gone through the state-sanctioned process.

Titling Joint Assets for Unmarried Co-Owners in Florida

Estate planning for unmarried co-owners begins by identifying your goals and appropriately titling jointly owned assets in Florida.  In some cases, this means re-titling property technically owned by one person into the names of both.  Joint ownership ensures that, when one owner dies, the other retains at least some interest in the asset.

Florida recognizes three categories of joint ownership:  tenancy in common, joint tenancy, and tenancy by the entireties.  However, tenancy by the entireties is only available to legally married couples.  The defining feature of joint tenancy is the “right of survivorship,” which means, when one owner dies, the other takes over complete legal ownership of the asset.  The asset doesn’t need to go through probate because title automatically vests in the surviving owner immediately upon death.

By contrast, when assets are co-owned as tenants in common, each owner holds a percentage interest in the property.  When a co-owner dies, his or her heirs inherit the decedent owner’s ownership interest.  With this in mind, the form of ownership you choose depends in large part on whether you want your significant other / co-owner to inherit your interest and where you want the property to go after both partners have passed away.

Once you’ve decided on a form of ownership for a particular asset, you need to formally title the asset.  For real estate, this usually means recording a new deed recognizing the co-owners as joint tenants (if you want the right of survivorship).  For personal property with an official title (like a vehicle), you ask the titling agency (such as the DMV) to issue a new title in both names.  Likewise, with a bank account, you’ll need to ask the financial institution to include both names on the account.

For property with no title, you can create a signed and notarized “assignment of ownership” (or similarly titled document), identifying personal property the two of you intend to own jointly.

A joint tenancy or co-tenancy won’t provide the same level of protection against creditors as a tenancy by the entireties, but it will ensure that both life partners have a legally recognizable ownership interest in the shared property.  In the case of a joint tenancy, it will also ensure that, after one party’s death, joint assets still belong to the other.  Importantly, though, Florida law assumes co-owned property is held as tenancy in common unless joint tenancy is expressly elected.

Individually Owned Assets in Florida Estate Planning

Whether married or unmarried, couples don’t always want to own all of their property jointly.  With individually owned property, you first decide whether you want your significant other to inherit your interest.  If so, you’ll need to use one or more estate-planning strategies to make that happen.  Otherwise, the assets will end up with your legal heirs under Florida’s intestate succession rules.  And that will not include your unmarried significant other.

Assets that aren’t jointly owned (or that are owned in a co-tenancy) can be addressed through a will or trust.  For instance, if you want to keep only your name on the title to a vehicle but you want your long-term love interest to inherit the vehicle after your death, you might create a will (or codicil to an existing will) that includes a bequest of the vehicle.  A few states recognize TOD (“transfer on death”) designations on vehicle titles, but Florida does not.

You can use a living trust similarly to a will so that, when you or your partner pass away, assets held by the trust are distributed to the survivor and/or to any other beneficiaries named in the declaration of trust.  Trusts have the advantage of providing more flexibility and durability than wills and can also avoid probate and help save on estate taxes.

As an example, say you want your long-term partner, after your death, to be able to continue living in a home you alone own.  But, after you are both gone, you want your siblings to ultimately inherit the property.  In that scenario, you might create a testamentary trust to hold the real estate for your partner’s benefit until his or her death, at which point the trustee would be instructed to distribute title from the trust to your siblings.

Individually owned financial accounts can usually be designated as “POD” (payable on death), allowing the account to automatically transfer to the designee upon the account-holder’s death.  If you place a POD designation in Florida on your bank account in favor of your significant other, you retain exclusive control over the account for life, and, if your significant other is still living when you die, the account will automatically transfer to him or her outside probate.  Most IRAs and other investment accounts allow account-holders to name a beneficiary, which more or less works out to a POD designation.

Florida Advance Directives for Unmarried Couples

Another estate-planning issue that unmarried couples need to carefully consider involves end-of-life decisions in Florida.  Florida law recognizes anatomical donations, living wills (which identify the medical treatment you do or don’t want if you become incapacitated); and healthcare surrogate designations (which authorize another person to make healthcare decisions on your behalf).

Absent a valid advance directive, a court appoints a guardian to make healthcare decisions in the event of incapacity.  Court-appointed guardians are usually close relatives, and courts will favor blood relations when choosing guardians.  For unmarried couples in long-term relationships, this can result in an appointed guardian other than the person the patient would have chosen.  By executing a designation of healthcare surrogate (also called “medical POA”) in advance, you can make sure that, if you ever need a healthcare guardian, it is the person who you trust most.

Like a designation of healthcare surrogate, a durable power-of-attorney (“durable POA” or sometimes just “POA”) empowers another person to make important decisions on the declarant’s behalf.  However, a durable POA provides more general authority and can include financial and legal decisions in addition to medical decisions.  Similar to a medical POA, a durable POA helps ensure that a guardian appointed to make financial decisions on your behalf is someone you choose yourself.

Effective estate planning always requires knowledge of the relevant areas of law, and, for people in non-traditional living arrangements, the need is particularly acute.  Importantly, though, the law isn’t static.  As cultural changes take shape, legislatures revise statutes and judges revisit common law principles to reflect current society (though the law does tend to lag behind the culture).  An experienced Florida estate-planning attorney stays abreast of the latest legal developments to meet the estate-planning needs of clients in all living situations.

3.  Estate Planning Changes For Same Sex Couples

Since 2015, same-sex marriages have been entitled to the same legal protections and benefits as any other marriages.  In Florida, those benefits include, among other things, property and income tax advantages, strong protections against creditors, and the right to own property as tenants by the entireties.  But, of course, same-sex couples who are unmarried run into the same estate-planning dilemmas as other unmarried couples discussed above.

Non-traditional Estate Planning in Florida

So, the greatest change for same sex couples is that the federal estate tax benefits available to traditional spouses are now available to non-traditional couples.  As I’ve discussed in previous articles about Florida inheritance taxes and Federal estate tax portability, the marital deduction allows each spouse to pass approximately $11.49 million in assets to beneficiaries. The transfer limit between spouses is unlimited as of this writing. At the state level, things could are a bit more complicated as the states individually adjust to the new federal marriage requirements for estate taxes.

The same challenges that arise for blended families mentioned above also hold true for same sex couples. Also, the same concerns that apply to conflicts of interest apply to estate planning attorneys and other professionals when assisting same sex couples with non-traditional estate planning.

As always, these are unique circumstances which require an in depth analysis of the specific situation.  Complex estate planning, and in particular non-traditional estate planning in Florida, should always be conducted by an experienced Florida estate planning attorney.

Steve Gibbs, Esq.

This is an updated version of original article published on July 22, 2015. 

3 comments… add one
  • Donna M. November 12, 2018, 10:32 am

    Hello Mr. Gibbs, I have been following you for months now. I love your education on Trusts. I have a trust, myself here in Kansas. I have been thinking of hiring your firm for months now. Well……… I need your professionalism for a civil suit my mother lawyer file against her beneficiaries. Being 93 years old, My brother, Bruce who is her POA, is manipulating and emotionally abusing (brain washing) my mother who has been diagnose in the early stages of dementia. Bruce inform me of this and I discuss it with the person who diagnose my mother. I know this abusive treatment has cause my mother to make incompetent decisions towards her money and trust. Therefore, I can give you more detail information about our case. Please get a hold of me through this email or by phone 785 650 3856. Thank you!! Donna Jo

    • gibbslawfl November 14, 2018, 5:34 pm

      Hi Donna, thank you for your interest in our practice and the blog. I’m sorry to hear about your difficult situation and for my delay in responding as this is the first chance I’ve had to review comments. I’ll have Gene reach out to set up a time to talk if that works for you.

      Best,

      Steve Gibbs, Esq.

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