WHAT IS A WILL?

A will is a written direction controlling the disposition of property at death. The laws of each state set the formal requirements for a legal will. In Florida;

1. You, the maker of the will (called the testator), must be at least 18 years old.

2. You must be of sound mind at the time you sign your will.

3. Your will must be written.

4. Your will must be witnessed in the special manner provided by law for wills.

5. It is necessary to follow exactly the formalities required for the execution of a will.

6. To be effective, your will must be proved in and allowed by the probate court.

No will becomes final until the death of the testator, and it may be changed or added to by the testator by drawing a new will or by a “codicil,” which is simply an addition or amendment executed with the same formalities of a will. A will’s terms cannot be changed by writing something in or crossing something out after the will is executed. In fact, writing on the will after its execution may invalidate part of the will or all of it.

WHAT CAN BE ACCOMPLISHED BY A WILL?

1. You decide who gets your property instead of the law making the choice for you.

2. You may name the personal representative (executor) of your will as you choose, provided the one named can qualify under Florida law. A personal representative is one who manages an estate, and may be either an individual or a bank or trust company, subject to certain limitations.

3. A trust may be created in a will whereby the estate or a portion of the estate will be kept intact with income distributed or accumulated for the benefit of members of the family or others. Minors can be cared for without the expense of proceedings for guardianship of property.

4. Real estate and other assets may be sold without court proceedings, if your will adequately authorizes it.

5. You may make gifts, effective at or after your death, to charity.

6. You decide who bears any tax burden, rather than the law making that decision.

7. A guardian may be named for minor children.

WHAT HAPPENS WHEN THERE IS NO WILL?

If you die without a will (this is called dying “intestate”), your property will be distributed to your heirs according to a formula fixed by law. Your property does not go to the State of Florida unless there are absolutely no heirs at law, which is very unlikely. In other words, if you fail to make a will, the inheritance statute determines who gets your property. The inheritance statute contains a rigid formula and makes no exception for those in unusual need.

When there is no will, the court appoints a personal representative, known or unknown to you, to manage your estate. The cost of probating may be greater than if you had planned your estate with a will, and the administration of your estate may be subject to greater court supervision.

MAY A PERSON DISPOSE OF HIS OR HER PROPERTY IN ANY WAY HE OR SHE WISHES BY A WILL?

While any sort of property may be transferred by will, there are some particular interests in property which cannot be willed because the right of the owner terminates automatically upon his or her death, or others have been granted rights in the property by Florida law. Some examples of these types of property rights or interests are:

• Except in certain very specific circumstances a homestead (that is, the residence and adjoining lands owned by a person who is survived by a spouse or minor child up to one-half acre within limits of an incorporated city or town or up to 160 acres outside those limits);

• A life estate : property owned only for the life of the owner;

• Any property owned jointly with another person or persons with right of survivorship (a tenancy by the entireties, which is limited to joint ownership between a husband and wife, would be one of these).

A person may not disinherit his or her spouse without a properly executed marital agreement. The law gives a surviving spouse a choice to take either his or her share under the will or a portion of the decedent’s property determined under Florida’s “elective share” statute. This statute uses a formula to compute the size of the surviving spouse’s elective share, which includes amounts stemming from the decedent’s jointly held and trust property, life insurance, and other non-probate assets. Because this formula is very complicated, it is usually necessary to refer this matter to an attorney with extensive experience in this area of law. Also, if your will was made before the marriage and the will does not either provide for the spouse or show your intention not to provide for him or her, then your spouse would receive the same share of your estate as if you had died without a will (at least one-half of your estate) unless provision for the spouse was made or waived in a marital agreement.

MUST A PERSON LEAVE A CHILD AT LEAST ONE DOLLAR?

No. This is not necessary and can actually cause considerable added expense to the estate. It is better simply to state in the will that no provision is being made for that child.

HOW LONG IS A WILL GOOD?

It is “good” until it is changed or revoked in the manner required by law. Your will may be changed as often as you desire while you are sane and not under undue influence, duress, or fraud, provided it is changed in the required manner. Changes in circumstances after the execution of the will, such as tax law amendments, deaths, marriage, divorce, birth of children, or even a substantial change in the nature or amount of your estate, may raise questions as to the adequacy of your will. All changes require a careful analysis and reconsideration of all the provisions of your will and may make it advisable to change the will to conform to the new situation.

DOES A WILL INCREASE PROBATE EXPENSES?

No. If there is property to be administered or taxes to be paid or both, the existence of a will does not increase probate expenses. A will frequently reduces expenses. If there is real or personal property to be transferred at your death, the probate court will have jurisdiction to ensure that it is transferred properly, either according to your will, or, if there is no will, in accordance with the inheritance statute. Thus, even if you have no will, your heirs must go to court to administer your estate, obtain an order determining your legal heirs, or obtain a determination that administration is unnecessary. These procedures are often more expensive than administering your will, since a properly drawn will names the beneficiaries and delineates procedures to simplify the administration process.

ARE ESTATES BY ENTIRETIES OR JOINT TENANCY WITH RIGHT OF SURVIVORSHIP SUBSTITUTES FOR A WILL?

Joint tenancies with rights of survivorship can be established when two or more persons title bank accounts and other assets in their multiple names with the intent to have ownership pass directly to the surviving named owners when one dies. A “tenancy by the entireties” is much the same but involves only married persons. These forms of joint ownership can avoid probate of the account or other asset when an owner dies. While this can be very efficient in some cases, use of joint ownership can be fraught with problems at death and cause more problems than it solves.

Among other unforeseen problems, indiscriminate use of joint ownership can cause an increase in estate taxes over the joint lives of married persons, force double probates in the event of simultaneous deaths, create unfairness as to who pays for funeral expenses and claims against the decedent, raise undesired exposure during life to the debts of co-owners, and cause a shortage of funds for payment of estate taxes which can cause litigation with the taxing authorities.

IS A LIFE INSURANCE PROGRAM A SUBSTITUTE FOR A WILL?

No. Life insurance is only one kind of property that a person may own and a will is necessary to dispose of other assets that a person owns at death. If a life insurance policy is payable to an individual, the will of the insured has no effect on the proceeds. If the policy is payable to the estate of the insured, the disposition of the proceeds may be directed by the will. Life insurance can be useful in providing cash at death for payment of taxes and expenses, but like most strategies for insurance, the careful person will consult a lawyer, a life insurance counselor, and a financial advisor. Mistakes in ownership and beneficiary designations in these policies can cause great increases in estate taxes owed.

IS A TRUST A SUBSTITUTE FOR A WILL?

No, in most situations. A trust may be used in addition to a will. This is because a trust can handle only the property that has been put into it. Any property of a person that is not placed in the trust either during life or at death in most instances escapes the control of the trust. It is the will that controls all property in a decedent’s name at the time of death if the will is drafted properly. Trusts can be helpful to speed administration and save taxes if they are drafted properly and funded during life with the property intended to be transferred by the trust. Often, however, improperly drafted or incorrectly funded or administered trusts can add to the cost of settling estates, not lower it. Furthermore, it is the probate of the will that can clear creditors’ claims, which is not possible with just a trust administration.

DO YOU HAVE TO GO TO COURT TO PROBATE A WILL?

No, personal court appearances are usually not needed to probate a will. However, documents must be filed with the court to procure a probate order and administer estates. In most counties, neither the estate attorney nor the interested persons ever appear in the courtroom.

CAN A WILL REDUCE TAXES?

A well-drawn will can reduce estate and income taxes that may arise when someone dies. Estate taxes are often by far the largest cash expense an estate can have. There is also the possibility that Congress may increase the impact of the estate tax in the future. In addition, proper planning must be made for income tax advantages. Proper planning with a will is indispensable in taking these benefits in the tax codes.

WHO SHOULD PREPARE A WILL?

No sensible person would employ “just anyone” to fill teeth, take out an appendix, or deliver a baby. The person who wants these services performed skillfully with the minimum risk to health, life, property, or the accurate execution of his or her wishes, will engage the services of a trained person. Except in dire emergency, these important tasks should not be performed by anyone except the professional.

The drafting of a will involves making decisions that require professional judgment which can be obtained only by years of training, experience, and study. Only the practicing lawyer can avoid the innumerable pitfalls and advise the course best suited for each individual situation. In addition, an experienced attorney will be able to coordinate the use of other skilled professionals, such as an investment advisor, actuary, insurance specialist, and tax accountant to complete a proper estate plan.

Moreover, there is no such thing as a “simple will.” Even smaller estates can have complexities only foreseeable by the experienced attorney.

SOME SUGGESTIONS CONCERNING WILLS

1. Marriage does not cancel a will in Florida, but a spouse acquired after the execution of a will may receive the same portion of your estate that he or she would have received had you died without a will (at least one-half).

2. If you have moved to Florida from another state, it is wise to have your will reviewed by a Florida lawyer in order to be sure that it is properly executed according to the laws of Florida, that the witnesses are readily available to prove your will in Florida, and that your personal representative is qualified to serve in Florida.

3. Before your will is effective to dispose of your property, it must be proved in the probate court. If the will is self-proving and otherwise valid, it may be admitted to probate without further proof. If the will is not self-proving, it generally must be proved by the oath of one of the witnesses. The oath must be given before a circuit judge, clerk of court, or a commissioner specially appointed by the court for that purpose. (Under certain circumstances, the court may permit the will to be proved by other means permitted by law.) A will can be made self-proving either at the time of its execution or later, which saves the time and expense of locating a witness and obtaining his or her oath after your death. For your will to be made self-proving, you must acknowledge the will before an officer authorized to administer oaths; the witnesses must make affidavits before the officer; and the officer must evidence the acknowledgment and affidavits by a certificate attached to or following the will. An appropriate form of certificate is prescribed by Florida law. The self-proving procedure is in addition to the normal execution and witnessing of the will, not in place of it.

4. No matter how perfect a will may be prepared for you, unless it is properly executed in strict compliance with the laws of Florida, the will may be entirely void. Be sure that you execute your will in the presence of your attorney, who knows exactly how and in what order the will should be signed.

5. Every person owning property who wishes to exercise control in the disposition of that property when he or she dies, should have a will regardless of the value of the property. Of course, the larger the estate the greater the tax consequences.

6. The following additional documents should be considered for signing when you make your will:

• Living Will: Florida Statutes now provide for a written declaration by an individual specifying directions as to use of life-prolonging procedures.

• Durable Power of Attorney: This document can assist in handling the property of a person who has become incapacitated without having to open a guardianship proceeding in court. This is especially valuable for paying the bills and protecting the assets of an incapacitated person.

• Health Care Surrogate: Florida law now allows individuals to designate a person to make health care decisions for them when the individual may not be able to do so. Included in this important appointment is the power to decide when to withdraw medical procedures.

• Pre-Need Guardian Designation: Florida law allows you to designate a person who could be appointed guardian over you should you become incapacitated and/or over your children should you become incapacitated or upon your death. If you fail to designate a guardian, the Court will do so for you if and when it becomes necessary.

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If yes, then the estate is eligible for Summary Administration in the Florida probate system, even if the value of the homestead is more than $75,000.

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“Quick” Question

“What is the creditor period and why do we need to publish a Notice to Creditors?”

“Quick” Answer

Under Florida law, the petitioner or personal representative of an estate must publish Notice to Creditors in the appropriate newspaper, to give creditors a chance to make valid claims against the estate for debt that the decedent incurred during his or her lifetime. This creditor period last for 90 days from the date that the Notice is first published.

“In Florida, under F.S. 735.2063 (Notice to Creditors), a Notice to Creditors may be published when an Order (of Summary Administration) has been entered. Once published, claims by creditors who are not known or are not reasonably ascertainable are forever barred unless those claims are filed within 90 days of publication.

Furthermore, F.S. 735.206 (Summary administration distribution) reads that after 2 years from the death of the decedent, neither the decedent’s estate nor those to whom it may be assigned shall be liable for any claim against the decedent, unless proceedings have been taken for the enforcement of the claim.

Laymen’s translation: If it has been less than 2 years since the decedent died, you must publish a Notice to Creditors (in the legal notices section of the newspaper of the appropriate county).

If you publish Notice on Day 1, then you’ve got to hold your breath until day 91 and hope that no creditors file a claim against the estate. Once you’re past this 90 day creditor period, claims are barred.

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Interestingly enough, I’m not interested in taking on more work than I need to, just so that my client can fight and posture, while standing meekly behind me. We are all about efficiency and I don’t doddle around with clients who want me to drag out a matter just to prove a point.

I was talking to fellow probate attorney down in Miami who said that a $50k estate he was handling, was whittled down to $10k after attorneys fees in costs, simply because of a few feuding siblings. He, the attorney, said he was sick to his stomach when he went to cash the final checks from his client, because he was sure that his client was going to kick up some more dust and quarrel about the fees.

Uncontested probate, much like uncontested divorce in Florida is more affordable and considerably less time consuming than duking it out.

Let’s all make nice people. The money is not worth the headache, not for the clients OR the attorneys. (just my 2 cents)

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Enjoy!

“Quick” Question

“Mom died without a Will, but she really wanted me to have the house. My rotten siblings never took care of her and of course now, they want a piece. What can I do?”

“Quick” Answer

Not much you can do! This is precisely the reason why everyone should have a Last Will and Testament! Florida intestacy statutes are going to grant that house to all of you in equal shares, giving you a tenancy in common interest with your siblings.

Get it probated, and then work out a deal with your siblings as to what to do with it. You could buy them out or have them buy you out. Fight about it and I guarantee it will cost you.

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When David and Katie Swanson saw a “For Sale” sign outside the Fort Worth duplex they expected to inherit, they knew they had a problem. They called the phone number on the sign and talked to a man who said he was the new owner.How could that be? The Galvez Avenue property was part of the estate of the late Ben Collier, a World War I veteran who died at age 105 in 2001. His last will and testament awarded the property to David Swanson, his nephew-in-law.

The new owner said he purchased the property from the executor of Collier’s estate. He had fixed it up and was looking to sell for a profit.

When the Swansons later learned the rest of the story, their surprise turned to anger.

Jerry Weinstein, lawyer for the executor of Collier’s estate, had arranged for the duplex to be sold to pay back taxes on the estate. The buyer was an investor who was also one of Weinstein’s clients.

The Swansons’ lawyer, W. Bernard Whitney, researched the matter and came to believe that Weinstein had a conflict of interest in the sale.

“My allegation is that he sold it to a friend at less than a fair sale,” Whitney told me. He filed a lawsuit on behalf of the Swansons in Tarrant County Probate Court alleging that Weinstein defrauded them of their property.

The case is an example of the complexities often found in probate court, when wills and property to be distributed to beneficiaries sometimes fall into dispute. It takes vigilance to protect your rights.

Weinstein told me he had done nothing wrong: “In this case, I ask myself over and over again if I have a conflict of interest,” he said. The answer, he said, is always no.

Troubled past

Ben Collier, who was one of the oldest living World War I veterans, liked to ride in the Fort Worth Veterans Day parade.

Collier was also known as the oldest person ever sent to the Tarrant County Jail. He was 103 years old when he shot his grandson several times after the younger man complained of conditions in a house that he lived in and that Collier owned. The grandson survived. Collier was never charged because the shooting was considered self-defense. After his release, he went to live with David Swanson.

Weinstein, who now works out of his one-man Weinstein Law Firm and Will Center in west Fort Worth, also has a tumultuous history. The lawyer was disbarred for five years in the late 1990s after pleading guilty to arson in federal court and being sentenced to five years’ probation.

Here’s what happened. He had told police that when he went to his family’s landmark store, Weinstein’s South Side Hardware on Magnolia Avenue, in the middle of the night, checking on a robbery report, he was attacked by two men who stabbed him and set fire to the store.

Later, police learned that Weinstein had staged the attack and burned his family’s business.

Today, Weinstein explains that he suffers from bipolar disorder. He had taken Halcion, a drug now known to cause violent reactions, and had also undergone electric shock therapy.

“I’m not proud of what happened, but it was just a matter of being ill,” he told me.

‘On the edge’

After Weinstein completed probation and returned to his law practice, he prepared Collier’s will.

Then, after Collier died, Weinstein was hired by the executor for Collier’s estate, Dorothy Mitchell.

Weinstein told me that Mitchell believed that the duplex had to be sold to pay Collier’s back taxes. So he recommended three possible buyers. One was Wayne Steed, a Fort Worth land investor for whom Weinstein said he had served as attorney.

Weinstein told me he disclosed the attorney-client relationship to Mitchell, following rules that lawyers disclose potential conflicts.

Steed paid $22,000 for the duplex, which lawyer Whitney told me was never appraised before the sale.

Weinstein explained: “I didn’t have anything to do with negotiations with the price. That was between him [Steed] and Miss Mitchell.”

“The point I want to make,” Weinstein continued, “is I didn’t make any decisions for Dorothy. She told me what to do.”

Mitchell testified in a deposition for the lawsuit that she knew nothing about legal matters and depended on Weinstein for advice and direction. She declined to be interviewed, but she testified that it was Weinstein who came up with the price for the sale.

After Steed bought the duplex and spent nearly $30,000 to fix it up, Weinstein handled its resale for him, according to land records and testimony. Steed sold it for $76,000.

Bob Gammage, a former Texas State Supreme Court justice and ethics expert, told me that in evaluating whether there was a potential conflict of interest, he might ask whether the estate lawyer and the executor tried to get “the best possible deal” for the estate. “I think you’re on the edge” of the appearance of a conflict, Gammage said.

Weinstein “may have done the best he could do under the circumstances and fulfilled his duties to the Collier estate and to the executor,” Gammage said, but that may depend on whether Mitchell was thoroughly informed and whether Weinstein shopped for the best deal.

The lawsuit was eventually settled in mediation. Weinstein and Steed agreed to pay David Swanson $10,000 each.

“I did not admit doing anything wrong,” Weinstein told me.

Swanson told me, “I took a beating. I didn’t get what the property was worth, but I’m tired of fighting.”

News researcher Marcia Melton contributed to this report.

Link to source: http://www.star-telegram.com/202/v-print/story/100624.html

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Attorney Long H. Duong, principal contributor to the WeProbateFlorida.com blog – a blog about Florida probate and estate administration, will begin a new feature addressing a series of classic questions he fields about probate in Florida.

The category title “Quick” Q&A is a bit of a mock on the common client or prospective client question: “Can I ask you a ‘quick’ question (about Florida probate)?”

“There is no such thing as a quick question if it’s coming from a prospective client. That’s why I don’t charge for initial consultations on Florida probate cases. I typically tell them I need the entire picture to understand the issues.”

Mr. Duong was not mocking his past clients, rather, helping them to understand that they weren’t “on the clock” and that they should present the issue in a clear (and concise) manner so he could answer properly.

“As you might imagine, I get the same questions over and over, and I’m happy to answer them, but now we publishing this Q&A on our website, where many of the current and future questions, can be addressed.”

The “Quick” Q&A will feature old questions and new ones that are emailed to Mr. Duong or the blog administrator and should prove to be a popular resource for prospective clients who need Florida probate assistance.

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3. Florida Probate Guide for Florida Personal Representatives – Coming Soon!

We are working on a simple and concise probate guide for personal representatives of Florida probate estates. It will appear both here on our blog and on our parent site, WeProbateFlorida.com.

Add our feed (RSS) or Bookmark (Ctrl+D) this page to check for the update!

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Seems the fight may have been more about bickering beneficiaries.

Read the rest of the story here. (May 8, 2007, Associated Press – as seen freep.com, Detroit Free Press)

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Some individuals try to save money by not hiring an attorney when they should. Three of the ways they try to save attorneys fees, that elder law attorneys often see, are by trying to avoid probate, by self-help estate planning, and by doing their own Medicaid planning. I will discuss these three mistakes this week and next week. It amazes me at how many people simply do not own the real estate that they think they inherited from their parents. Recently a prospective client, Karen, was shocked to find out that the real estate that she believed she inherited from her mother, Sarah, is still owned by her deceased parent.

It amazes me at how many people simply do not own the real estate that they think they inherited from their parents. Recently a prospective client, Karen, was shocked to find out that the real estate that she believed she inherited from her mother, Sarah, is still owned by her deceased parent.

Karen showed me paperwork from Alabama, where her parents lived and died. A Cape Coral lot was originally purchased 20 years ago in the name of her parents. Her father died 15 years ago and her mother passed away 8 years ago. When her father died, Karen told me her mother had no problem obtaining sole title to the lot.

Soon after her husband died, Sarah phoned the tax collector’s office in Lee County and was told to send an original death certificate to be recorded at the Clerk of Court’s Recording Division. For the next 7 years, the real estate tax bills were sent to her mother who dutifully paid them. It worked because the deed which was titled in her parents’ names passed ownership to the surviving spouse automatically because of the tenants by the entirety, or husband and wife, character of the deed.

When her mother died in Alabama eight years ago, Karen called several attorneys in Florida who all told her she should hire an attorney to file for probate. Attempting to save attorney’s fees, she recorded the death certificate in Lee County and provided a new address to the tax collector to send the future tax bills.

Even though she had three other siblings, the four children agreed she could have the Cape Coral lot because she was the only child living in Lee County. The other three children divided various personal property among themselves in order to balance the value of the lot, which was only worth a few thousand dollars at that time.

Last year, when vacant lots in Lee County were selling for far more than ever anticipated 6 to 12 years ago, Karen received a generous offer to purchase the lot. Needing the money from a fast closing, she signed the sales and purchase agreement with the buyer’s real estate agent. It was contingent on closing in 30 days. The buyer then placed a rather large deposit with a local builder to start a new home on the lot. A few days before the anticipated closing, the title company told Karen she did not own the lot.

She soon received a letter from the buyer’s attorney notifying her that it was illegal for her to attempt to sell something she did not own and that she would be sued by the buyer for damages, including the buyer’s loss of the large deposit with the builder. The real estate agent’s attorney also sent her a letter demanding she pay the real estate commission or be sued.

How could she not own the lot when the Lee County government sent her the real estate tax bills every year? Well, it is not the Lee County government’s fault that she tried to save attorney’s fees by “doing it herself.”

The tax collector added her name to the tax bill so someone would pay the real estate taxes. And she did pay the taxes for years. The tax collector will not return your tax payments simply because you do not own the property.

What the public should know is that whenever real estate is owned only in the name of a person who is now deceased, title will not pass until a Florida probate judge says it does. That is one reason we deed the property to a trust, to avoid probate.

Sarah’s children would have to file a petition for probate administration, signed by a Florida attorney, which, since Sarah left no Last Will, would have to be joined in by all her children. That is where the problem became more complicated because one of Sarah’s sons was missing and another was deceased. The deceased son’s daughter did not agree that the lot should go to Karen. She said maybe 8 years ago when it was not worth as much, but now that it is worth over a hundred thousand dollars, the sales proceeds should be divided among Sarah’s children and the grandchildren of the deceased son and perhaps the missing son’s children. A probate judge would probably agree.

When there is a fight among the beneficiaries, one attorney is not permitted, by the ethical restrictions of the Florida Bar, to represent conflicting beneficiaries. Hence, we can expect several attorneys getting paid from the lot sale, after a Florida judge finally decides who really inherited the lot eight years ago. It makes no difference that Karen dutifully paid the real estate taxes from the bills sent her by the tax collector.

Whenever a Realtor, a mortgage broker, or a title company sees a tax bill being sent to a person in care of another person, often out of state, they should inquire about whether the original owner is still alive and also, if alive, whether the owner is competent to sign a deed. We have been reading stories about thieves who sign a fraudulent deed when they discover such a tax bill by searching on line.

If you believe you have inherited a piece of real estate from someone, but their name still appears on the tax bill, you need to make a diligent inquiry about what happened when the original owner died. If you think you inherited property, but do not have any legal paperwork to prove it, you need to consult a Florida attorney.

Once a client showed me a letter from an out-of-state attorney suggesting that the out of state personal representative sign a Quit-Claim deed to the Florida beneficiary. This deed was recorded and the tax bills sent to the “new owner” who is still not the legal owner. The out-of-state attorney who handled the probate in the northern state should have known better. He or she should have known that the deed would have no effect on change of ownership. An out-of-state probate judge cannot change ownership to Florida real estate. Only a Florida probate judge can do that.

Saving attorney’s fees by avoiding probate and just paying the taxes can backfire first, because legal fees have gone up in the last several years, as have most professional services, and second, because intervening events can further complicate the situation that additional fees may be reasonable. Trying to save attorney’s fees by avoiding probate may increase the legal fees that will be necessary to obtain marketable legal title.

Two other areas where we see persons trying to save legal fees are self-help Medicaid planning and self-help estate planning, both of which will be discussed next week.

— William Edy is a certified financial planner and tax attorney and a certified elder law attorney in Lee County. He may be contacted on line for article ideas and questions. This article should not be a substitute for advice from your own attorney.

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