Why New Florida Residents Should Update Their Estate Plan

Welcome to Florida!  (Don't Forget to Update Your Estate Plan).

Many Floridians move to Florida after developing strong bonds with professionals in another state.  Like many other states, Florida has unique laws intended to protect Florida residents who make wills, trusts, and other estate plans.  One unique aspect of Florida law is that the parts of a trust that remain in effect after the death of the person who created the trust are treated like a will.  To ensure that a will reflects the true intent of the person making a will, section 732.502, Florida Statutes, requires that the will be signed in the presence of two witnesses. Section 736.0403, Florida Statutes, applies the same rule applies to the "testamentary" aspects of a trust executed by a Florida resident.

In Kelly v. Lindenau, 223 So. 3d 1074 (Fla. Dist. Ct. App. 2017), a Florida resident returned to Indiana and asked  his Illinois attorney, on two occasions, to prepare amendments to his trust.  Florida law recognized the validity of the trust signed while he was a Florida resident. However, the amendments were signed after he became a Florida resident.  Although the amendments would have been valid under Illinois law, Florida law requires two witnesses to a trust or a trust amendment signed by a Florida resident.  As a result, the appeals court found that the amendments were not valid.

This is one example of the importance of working with an attorney in your state of residence. Our firm policy is to advise clients to seek the advice of a licensed attorney in the state where a former client becomes a resident.  Unfortunately, we have seen situations where a Florida resident failed to update their planning documents after becoming a Florida resident, resulting in avoidable costs and delays for the individual's family when the documents need to be used.

Are your planning documents invalid when you move to another state?

This a topic that comes up a lot in Florida.   Many clients come to me because someone told them that their will, trust, power of attorney and health care directives are no longer valid after changing their state of residence. In my opinion, that's not necessarily true, but it is always worth seeing an attorney licensed in the state where you have moved to review and discuss the differences in state laws that could impact your plan. It is always good to review your planning documents, so why not use a change of residence as a good excuse to do so? Here's a link to a short video from The American College of Trust and Estate Council.   #planning #newfloridaresident

https://www.youtube.com/watch?v=BvacC12OUIU&feature=youtu.be

RPPTL Section Meetings in Miami



I am in Miami for meetings of the Real Property, Probate and Trust Law Section of The Florida Bar. Today I attended committee meetings for the Asset Protection Committee, the Probate and Trust Litigation Committee, the Probate Law and Procedure Committee, and the Guardianship and Advance Directives Committee.  Attorneys from across the state gather to discuss developments in the law and ways to best serve our clients.  The exchange of ideas, knowledge and experiences is amazing.  I always return home thinking about how fortunate I am to be part of such a great group of dedicated professionals.

Everyone should have a revocable trust, or should they?

When is a Revocable Trust the Best Option?

ESTATE PLAN TO DO LIST þ   Last Will and Testament þ   Update beneficiary forms þ   Durable Power of Attorney þ   Health Care Surrogate Designation þ   Living Will ?    Revocable Trust

After more than 29 years of listening to client's concerns, and then guiding them through the estate planning process, I've learned that no two clients are the same. A trust is a good option for some clients, but not for others.  Preparing a revocable trust and charging a high fee can be lucrative work for estate planners. With the increased use of technology, some individuals, or family members concerned about a loved one,  believe that do-it-yourself options save the expense of hiring a licensed, experienced attorney.  

Our firm believes in putting the client first.  Often, a client who believes they need a trust can benefit from other simpler, less expensive options. The linked article on our firm site explains some of the myths about revocable trusts.  In some cases, they can be the best option, but in other cases, probate is actually easier and less expensive.  Many factors should be considered.  In some circumstances, revocable trusts actually cause more problems than the solve. 

https://barneswalker.com/considerations-for-using-a-trust/  

Divorce, Taxes and Trusts - The Perfect Storm

ACTEC Fellow Justin T. Miller dives into a tough combination of legal issues that many practitioners would not even consider.  The transcript and the podcast can be accessed through the link below: 

https://actecfoundation.org/podcasts/tax-cut-jobs-act-divorce/

Are you Prepared?

It may be November, but Hurricane Season is not over.  It ends November 30^th.  While the odds of a hurricane are lower this time of year, it’s always a good idea to be prepared.  Don’t wait until June 1^st to think about things that you need in the event of a hurricane:

• Review and update all of your estate planning documents, such as wills, powers of attorney, health care directives, and trusts. Keep them in a secure place, and be ready to take them with you if you had to evacuate on short notice.

• Keep your insurance coverage up to date.  Talk to your insurance advisor about cover for wind, flood, fire, and liability coverage.

• Think about your family’s needs if a disaster prevented you from working or resulted in long-term medical care.  Health insurance, long-term care coverage and life insurance can mean the difference between struggling to get by and having the resources to meet life’s unexpected changes.

New Guidance on the Impact of the 2017 Tax Act on Excess Deductions on Form 1041

After the 2017 Tax Act, there was confusion about the availability of "excess deductions" on Form 1041.  In the past, trustees and personal representatives could pass unused deductions on the final return (Form 1041) for the trust estate to the trust and estate beneficiaries.  This would be useful when the expenses (fiduciary, legal and accounting fees) exceeded the income for the tax year. The beneficiaries, if they itemized deductions on their personal returns could use their share of the excess deductions on their personal returns.  That seems fair, right?  In the linked commentator, respected national expert, Ron Aucutt, commented on the latest from the IRS.  It looks like recent guidance from the IRS has solved the problem. This still requires careful coordination by the trustee or personal representative of an estate, the attorney, and the accountant preparing Form 1041 for the estate and/or trust.  Here's the link to Ron's article.

Ron Aucutt - A Decade of Disrupted Tax Guidance

Homestead Waivers - When, Why, and How do they Work?

I serve on a committee within the RPPTL Section of the Florida Bar which deals with homestead issues.  Effective July 1, 2018, there is a new option for Florida estate planning attorneys when dealing with the complex benefits and restrictions for Florida Homestead owned by a married person. I serve on the committee with Jeff Baskies.  We teamed up to write an Article in the Florida Bar Journal to provide some insight into this new tool, including when to use it, why it is helpful, and how it is implemented.  Like so many features of a Florida estate plan, the new tool requires careful consideration before implementation.

https://www.floridabar.org/the-florida-bar-journal/homestead-planning-under-floridas-new-safe-harbor-statute/