Frequently Asked Questions
Question: Why do I need a will?
Answer: Primarily to make the probate process easier and less expensive. Without a will, distribution of a person’s assets at death would be controlled by a statutory formula that may not be the same as the decedent’s wishes and the probate process may also result in higher administration fees.
A properly prepared and executed will allows a person to control who receives certain assets at death, to name a trusted person as personal representative (i.e., executor), and to reduce probate fees and expenses. Added provisions to the will may avoid bond requirements and allow the sale of real property of the estate without court permission.
Question: If I have a will, does that avoid probate?
Answer: No. A will must be admitted to probate by order of court. It is not self-executing.
Question: Can a “durable power of attorney” authorizing my agent to act for me avoid probate at my death?
Answer: No. A durable power of attorney terminates when the principal dies.
Question: Is a “revocable living trust” preferable to a will?
Answer: It depends. A revocable living trust is designed as an asset management tool during life and as a probate avoidance device at death. It is appropriate in situations such as a person: (1) who has significant non-retirement investment assets; (2) who is elderly and worries about managing his or her assets and paying bills in the event of incapacity and being forced into an expensive guardianship proceeding; (3) who owns real property out of state; or (4) who is concerned about privacy of asset distribution at death or unnecessary court interference.
Under Florida law, a revocable living trust has limitations, including the following: (1) it does not avoid claims of a person’s creditors during life or after death; (2) it does not avoid fees for the trustee and the trustee’s attorney for trust administration after the death of the settlor, although the fees are usually less than those incurred in probate administration; (3) if no probate is filed after the death of the settlor, there is a two year statute of limitations for claims of most creditors which can put the trustee at risk if full distribution is made prior to expiration of the 2-year claims period; and (4) certain assets usually should not be held in the trust, including homestead real property, tangible personal property, retirement assets, and certain assets payable to named beneficiaries at death (e.g., life insurance).
Even if a person establishes a revocable living trust, a “pour-over” will is recommended to distribute certain non-trust assets (e.g., tangible personal property) and to allow the trust to receive certain other assets that pass through probate.
Question: What type of planning is recommended if a person does not want a beneficiary to receive outright distribution of assets because the beneficiary:
Answer: A contingent "testamentary trust" can be included in the will (or a “subtrust” created in a revocable trust) to hold certain assets for a stated period of time (e.g., until a young beneficiary reaches a certain age) or for the life of the beneficiary (for a spendthrift beneficiary or for the surviving spouse). These trusts can name alternate beneficiaries (e.g., children) after the death of the life beneficiary or after termination of the trust. A “special needs trust” can be created for a disabled beneficiary.
Question: What does “estate planning” cost?
Answer: The cost will depend on the complexity of the plan selected. Usually after the initial 30-minute office conference when accompanied by the completed Estate Planning Confidential Questionnaire provided at this website, estate planning recommendations and estimated fees and any expenses can be provided.
Question: What does “probate” cost?
Answer: Probate costs are generally regulated by Florida Statutes which state that attorney’s fees for “formal administration” are “presumed reasonable” at 3% of the first $1 million of the value of non-exempt assets, excluding the value of the homestead and certain personal property. The rate is reduced for the value of estate assets above $1 million. In small estates, the lawyer may require a minimum fee greater than 3%.
Additional fees may be charged for certain “extraordinary services” provided by the lawyer such as handling disputes and litigation with creditors or beneficiaries. The personal representative and those responsible for the fee may agree with the lawyer to a different fee arrangement. Costs and expenses involved, such as clerk’s filing fees, publication fees for the notice to creditors, and certified mail are additional to the fee.
For smaller estates where the non-exempt asset value does not exceed $75,000 or if the decedent has been dead for more than 2 years, there is an abbreviated form of probate called “summary administration” that does not involve the appointment of a personal representative and attorney’s fees are usually less.
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Copyright 2015. Terrence T. Dariotis. All rights reserved.