It’s a topic many find uncomfortable to talk about, but it’s common fodder for poets, songwriters, novelists and artists: death. We all have to face it one day, and if we’re lucky we have loved ones to be there for us when the time comes. One of the best things we can do to help our loved ones is to have a plan in place and make sure that plan avoids these estate planning mistakes.
The most common mistake is to have no estate plan in place at all; no will, no durable power of attorney, no health care surrogate or no living will. Without those documents to guide your family they may not know your wishes or be able to help you if you become disabled.
No will means that when you die Florida law dictates who inherits your estate. Having beneficiaries on assets like bank accounts will keep them out of probate, but otherwise your assets will pass to the people determined by Florida law. That would be a surviving spouse first, then your children, then your parents, then your siblings, then nieces and nephews, then cousins, and so on. If that’s not what you want, you need a will to state who your heirs are.
No durable power of attorney or health care surrogate means there’s no one named to make financial, legal, or health care decisions for you if you can’t. That may force your family to seek a guardianship over you which can be expensive and time-consuming.
No living will means your family will have to decide about end-of-life care and whether your body is kept alive for a prolonged time using machines. If you do not want artificial means prolonging the death process you need a living will saying so.
The next most common mistake is to have an improperly executed will. Florida law requires a written, signed will with two witnesses who also sign in your presence. Having a will with insufficient witnesses is just as bad as having no will at all. Further, to make the probate easier all three signatures should be notarized in a self-proving affidavit.
Another common mistake is creating a revocable trust and then not funding it. The main purpose of a revocable trust is to minimize the need for probate. The trust cannot do that if assets that are otherwise subject to probate are not transferred to it while you’re alive or if other provisions are not made to transfer them automatically upon death.
Florida’s rules for how homestead is treated at death are fairly unique, and not properly following them can be a disastrous mistake. First, Florida restricts who can inherit a homestead if the deceased owner was married at the time of death. In that case, only the spouse can inherit the homestead. Any attempt to leave it to someone else is an invalid gift. If the deceased has no surviving children, or only children with the surviving spouse, the spouse gets the homestead outright. If there are children from another relationship, then the surviving spouse gets to choose a life estate or a one-half interest in the homestead, and the children get what’s left over. That’s why it’s important to have a second spouse waive any homestead right if the goal is to leave it to the children from the first marriage.
Second, Florida law provides very strong creditor protections for a homestead that passes to family. Essentially, no creditor can touch it except for the mortgage-holder, a worker who puts a construction lien on it, or the IRS. Other than that, the homestead passes to your family regardless of how much you owed when you died. The mistake that occasionally occurs is that the will contains a direction to sell the homestead and distribute the funds among the family. That direction to sell cancels that creditor protection, and all the probate creditors that crawl out of the woodwork after you die can go after it.
Estate planning is essential for helping our loved ones know what we want to happen when we pass and for giving them the legal authority to help us when we need it. Mistakes can happen, but most can be avoided with qualified professional help. See your estate planning attorney to make sure your plan is what you want and need. After all, the worst planning mistake is not to plan.
