A trust is a legal document that a grantor (also known as a trustmaker or settlor) creates. The grantor creates the trust for the benefit and use of a beneficiary. A trustee is a third party who is tasked with maintaining the trust assets and ensuring that they are handled properly.
“Trust administration” concerns the trustee’s job—namely, distributing and maintaining the trust. In this article, we’ll go through the basics of trust administration.
What is Trust Administration?
Trust administration is the last main stage of the trust. It goes into effect when the grantor is incapacitated, dies, or otherwise indicates that he or she wants the trust to be administrated. Trust administration is a process, and it is the trustee’s job to faithfully carry out the wishes of the grantor.
What Does a Trustee Do?
Once the grantor dies, the trustee becomes responsible for a myriad of tasks. These tasks include (but are certainly not limited to) providing copies of the trust and notice of the commencement of administration to all beneficiaries/heirs. State statute or the trust document will specify the format to which the copies and notice must adhere.
The trustee must notify the state of the grantor’s death, request a taxpayer ID from the IRS, file an estate tax return, and handle the process of distributing trust assets and/or proceeds to the proper beneficiaries. The process of trust administration is usually faster, more efficient, and less publicized than court-supervised probate.
However, many trustees are unfamiliar with these procedures. This is why it is important for a trustee to work with a lawyer, CPA, and/or financial advisor to ensure everything is done correctly. This collaboration is yet another important task for the trustee.
Advantages of a Trust
Trusts have many advantages; chief among them is avoiding probate court. According to CNN Business, the basic trust plan will cost between $1,600 to $3,000 (though this is just an estimate—costs can vary). In many states, the typical probate cost will be 5%-10% (again, estimated) of the total value of the estate.
In addition to being faster and more private, trusts are usually more cost-efficient than the probate court process. Depending on the type of trust, trusts can protect your property and assets from lawsuits and creditors.
Trusts can reduce gift and estate taxes. During trust creation, you can name your trust administrator and put conditions on your posthumous asset distribution. This level of personalization is a major benefit of trusts.
Disadvantages of a Trust
As with any legal document, trusts and trust administration have their disadvantages, including the loss of control over assets if you make the trust irrevocable (which means that the trust cannot be changed once the document is finalized).
If you make the trust revocable (which means that the trust can be changed, even after finalization), that revocability may have tax-related consequences. It might also have negative effects on stamp and estate duty and asset protection.
Lastly, bad trustees are out there. You might appoint someone that you think is trustworthy, only to find out that that was a miscalculation. Luckily, courts offer remedies to protect you in the event of trustee misconduct.
It is relatively rare, but it does happen. When a trustee commits misconduct, this is called a “breach of fiduciary duty.” In Florida, there are four main examples of a breach of fiduciary duty: self-dealing, excessive compensation, poor investment choices, and stealing assets.
The first is self-dealing. For example, a trustee who is selling property or using assets for personal gain is self-dealing by using trust assets to benefit his own wallet.
Secondly, a breach might involve excessive compensation. This occurs when the trustee is paying himself too much. Though trustees are legally permitted to accept payment for their efforts, said payment must be reasonable.
Third, a breach occurs if a trustee is making inappropriate or poor investment choices. These choices might be the result of impaired judgment, self-dealing, or both. For example, a trustee investing trust assets into his own underperforming, badly-managed business has engaged in both self-dealing and in improper investment.
Fourth, is just plain old theft. A trustee breaches his fiduciary duty (and may be susceptible to criminal penalties) for stealing assets from the trust. Pilfering assets usually requires intentionality.
The main defense to a breach of fiduciary duty is showing that the trustee was acting within the bounds of the trust document. This process—the allegations and the defense against them—will be handled in a court of law.
Remedies for Breach of Fiduciary Duty
The main defense to a breach of fiduciary duty is showing that the trustee was acting within the bounds of the trust document. This process—the allegations and the defense against them—will be handled in a court of law. The court will hear both sides and determine what relief, if any, is required by law.
There are legal and equitable remedies available to grantors if a trustee breaches his fiduciary duty. These remedies include appointment of a new trustee, damages, a constructive trust, injunctive relief, and even criminal penalties.
When deciding whether to set up a trust, you should consider all the advantages and disadvantages. Even in the event of misconduct, a court can still offer relief. Talk to an attorney about the best decision for you and your property, and learn more from our website.
Halloween is the season of pumpkins, ghosts, goblins, and more. You might like your Halloween frights tame and filled with corn mazes and G-rated movies, or you might be a hard-core horror movie and haunted house fan. Either way, there’s no denying that Halloween is one of the best holidays around.
However, it isn’t the scariest thing in the world. Halloween comes once a year, but the frights and scariness that come with not having an estate plan is year-round. Listed below are the basic things to know about estate plans, wills, and (eek!) probate court.
Requirements of a Last Will and Testament
The last will and testament is a legally-enforceable document that you create. It outlines your wishes for what you want to happen to your assets (property, personal possessions, money, etc.) after you die. In Florida, there are several requirements for a last will and testament. And, within some of those requirements, there are exceptions.
First, the testator (person who is making the will) must be eighteen or older and of “sound mind.” Sound mind isn’t overly complicated. It just means that you need “testamentary capacity.” You need to mentally understand the extent and nature of the property your will dispose of posthumously, and you need to understand your relation to those who will claim a benefit from your will. Essentially, you must know you’re writing a will, and you need to be cognizant of the property in your will and the people to whom you’re transferring the property.
Second, the will must be in the correct form of writing, i.e. non-holographic. It cannot be “holographic” (AKA “olographic”). A holographic will is a will that has been completely handwritten and signed by the writer/testator. It is an alternative to a lawyer-written will. Some states might allow holographic wills, but Florida does not.
Third, the testator must sign the will. If the testator is unable to sign it (quadriplegic paralysis is a common example of why a testator might be unable to sign his will), the testator may direct another person to sign it on his behalf. That person must sign the will at the direction of the testator and in the presence of the testator.
Fourth, the will must be signed at the bottom. The signature doesn’t have to be formal—it can even be a symbol or letter; so long as the testator uses that symbol as his signature, it is acceptable.
Fifth, two competent witnesses must be present at the signing. The witnesses must sign the will in the presence of the testator and one other person.
What is Probate Court?
Probate court is the court where last wills and testaments go to be authenticated (validated as real) and then executed. It is also where people who die intestate go. If someone dies intestate, that means that they die without a will.
In the case of intestacy, the probate court itself will divvy up the deceased’s property. Creditors will be the first recipients, followed by anyone else with a legal claim. Probate court is time-consuming, expensive, and, in the case of intestacy, it doesn’t always reflect what the deceased would have wanted.
How to Avoid Probate Court
Even if you don’t die intestate, you will likely have to go through probate court unless your estate is extremely small. A trust is another way to transfer assets without going through probate court. A trust goes into effect when you’re alive, not when you’re dead. You transfer legal title to an asset to a trustee, who holds it until you want the beneficiary to receive it. A trust can be created in a last will and testament.
The bottom line (and the most takeaway from this article) is that you must have a plan for your asset distribution after you die. Going to probate court for will authentication is far different than going there for intestacy. You don’t need to wait until your old or sick to make an estate plan. In fact, the best time to do it is when you are in good health and clear-headed.
Though not having an estate plan might not have the same fright-factor as Michael Myers chasing people with a knife, it’s still scary. Make sure you talk to an attorney to find out how you can protect yourself and your family from the real-life horror movie that is dying intestate. Learn more about probate.
Well, there’s no getting around it. Election day is fast approaching, and, in less than one month, we’ll all be making one of the most important choices of the year. No matter who you’re voting for, it’s important to get out there and make sure that your voice is heard. Many states have early and mail-in voting, and, of course, you can vote in person, too.
Elections aren’t the only events in life that require tough choices. Some of the most difficult phases of and events in our lives require serious decisions. The key is to make sure you always have a plan, no matter what. In this article, we’ll talk about three major life events and the legal documents they involve.
Death is inevitable, and though you might not live on, your assets will. You have a few options when it comes to asset (money, property, possessions, etc.) distribution. Two of the main ones are last will and testaments and trusts.
A last will and testament is the estate planning tool with which most of the population is familiar. This document lays out how you want your assets distributed after you die. A will must be authenticated in probate court before the wishes enshrined in it can be executed.
For a will to be authentic in Florida, there are a few requirements. First, the testator (person writing the will) must be at least eighteen years old. Second, he or she must be of sound mind. Third, he or she must sign the will. Fourth, there must be two competent witnesses, and fifth, the will cannot be “holographic” (handwritten). There are certain exceptions/tweaks to the third and fourth requirements, but those five are the basic must-haves.
A trust, by contrast, goes into effect immediately, not just when you die. A trust is a three-party relationship. You (the grantor) sign title to your asset(s) over to a third party (the trustee). Then, upon your direction—or when you die—the trustee turns over the asset(s) to the person you intended as the recipient all along. This recipient is called the beneficiary.
Divorce can shake up your estate plan. Revisit your estate plan after the divorce is finalized. There are certain documents, such as healthcare proxy, power of attorney, and any trust beneficiaries, that require updating if you are divorcing your spouse. Even if the divorce is amicable, you will need to make changes.
You might still want to leave your spouse something, which is your right, divorced or not. Check your prenuptial and/or postnuptial agreements, as well as your state’s laws, to see what can and cannot be altered in your estate plan.
There are some documents you might not be able to change during the divorce. In some states, you cannot change beneficiary designations for life insurance, 401(k) plans, pensions, and similar accounts until after the divorce has been finalized.
The bottom line is this: divorce means you have a lot to do to ensure that your estate plan reflects your wishes accurately.
While divorce requires you to update and correct, sickness (and old age) require even more proactive action. It’s best to complete certain documents, like a living will, power of attorney, and guardianship papers before something happens.
A living will, in contrast to a last will and testament, goes into effect while you are still living. This legal document contains directions for your medical care. If you are too sick or incapacitated to tell doctors and nurses what you want, the medical staff can refer to this document for assistance. Examples of items included in a living will are preferences for pain management, DNR (Do Not Resuscitate), and organ donation. The living will tends to reflect the patient’s values and spiritual or religious views.
A power of attorney is a trusted individual that you appoint to manage your financial and/or medical affairs if you’re unable to do so yourself. This person is usually a spouse, family member, or trusted friend.
Guardianship papers are important for those with minor children. These documents designate who will take custody of your dependents in the event of your death or incapacitation.
Though life is always going to be fraught with surprises, some good and some bad, having a solid plan will alleviate stress and allow you to face difficulties head-on. Talk to an estate planning attorney today about how to safeguard yourself and your loved ones, and learn more about asset protection.
And don’t forget to vote!
We’ve all had someone tell us at some point, “Don’t take it personally.” Well, if there’s one thing you should take very personally, it’s personal asset protection. People are familiar with estate planning’s protection of assets after they die, but they might not be familiar with what estate planning can do for them while they are alive.
Especially in these uncertain times, it’s important to know about personal asset protection and do all you can to maximize your legal options and safeguards. Here is a brief overview of what we mean when we say, “personal asset protection.”
The Basic Definition
Let’s start with the basic definition of personal asset protection, including what does and does not qualify. Asset protection involves strategies and legal tools to guard your wealth from creditors, lawsuits, and similar agents looking to cash in. Asset protection is used by businesses and individuals to limit what their creditors can and can’t take to satisfy a debt. You don’t have to be a millionaire to engage in asset protection—it’s something that is just as suitable for the working class as it is for the 1%.
What Asset Protection is Not
There is no denying that asset protection has gotten somewhat of a bad reputation. Over the years, there have been highly-publicized cases of illegal offshore accounts and shady white-collar dealings. However, those cases are not examples of asset protection: they are crimes.
Asset protection operates within the bounds of the laws governing creditors and debtors. Concealment, fraudulent transfer, bankruptcy fraud, and contempt are all crimes—they are not legitimate ways to protect your assets, and you should never engage in them.
Assets to Protect
It is advised that you protect your assets before a claim/liability happens. After a claim or liability happens, it is often too late to protect your assets. Therefore, you must be prepared. Retirement accounts, homesteads, annuities, life insurance, and trusts are all assets that you may be able to protect from creditors in the event of a suit.
There are many methods of personal asset protection, but three of the most common include: asset protection trusts, family limited partnerships, and accounts-receivable financing.
An asset protection trust is subject to complex regulations and requirements. This trust is self-settled. The grantor (you) becomes the beneficiary and can access the trust account funds (your money). If structured correctly, the asset protection trust will not be reachable by creditors. It also offers certain tax savings, depending on your state.
Secondly, accounts receivable financing involves capital that is principle to a business’s “accounts receivable.” Accounts receivable refers to certain business assets, such as outstanding balances of customer invoices that are due but have not been paid yet. Accounts receivable financing is more suited for a business than an individual, though small businesses owners can certainly take advantage of this flexible funding.
Thirdly, a family limited partnership is another asset protection tool that is geared towards small businesses. An FLP lets a family pool its money together to run a company. Each member of the family purchases shares of the company, and they profit proportionately to those shares. This has been called a “powerful estate planning tool” for business owners.
Protecting Your Home
Though your home is not your only asset, it is perhaps your most valuable. The first way to protect your home from creditors is to take advantage of what is known as a “homestead” exemption. This exemption protects the value of your home from creditors. Forty-eight states have this homeowner protection, though they differ in terms of requirements and amounts. Also, twenty-one of those states require a homeowner to file paperwork to qualify for this exemption (i.e. it’s not automatic).
Implementation of an equity stripping plan, creation of a domestic asset protection trust, moving the title of your house to the low-risk spouse’s name, and buying umbrella insurance are other options to protecting your home from creditors.
If this is confusing to you, don’t be alarmed. You can contact an estate planning attorney to talk about your options. Though lawsuits seem like they won’t happen to you, they are remarkably common. America is a litigious society. There are forty million lawsuits filed every year in America. As the time-worn saying goes, it’s better to be safe than sorry.
Visit our website to learn more about asset protection.
If there’s one thing that has been true about 2020, it’s that things are changing rapidly. Whether it’s breaking news updates every day about the Coronavirus pandemic or tragic news about our favorite actors dying (#WakandaForever), this has been a tough year for us all.
So how do we cope? When it comes to constant change and a stressful environment, you can only affect what is under your control. In this article, we’ll talk about ways to cope with life changes by using the legal system to your advantage.
If you don’t recognize the term “living will,” you might recognize this document as an “advance directive.” There’s no denying that the Coronavirus pandemic is here, perhaps to stay. And there’s also no denying that it is causing people to become sick (from mild symptoms to ventilation required), sometimes fatally. The numbers increase every day.
What doesn’t change is that you need to be prepared if you fall ill. A living will is a legally-enforceable, written document that lays out your wishes in the event that you are hospitalized and unable to communicate. These wishes include medical treatments that you do or don’t want, whether you want to be kept alive under any circumstances, and organ donation and pain management preferences.
These are all highly personal and contingent on your values and lifestyle. That’s why it is important to have your requests written; that way, they will be honored.
Power of Attorney
Along the same lines of a living will is a power of attorney. A power of attorney is a trusted individual who you appoint to manage your financial and/or medical affairs in the event that you are unable to do so yourself (incapacitation, illness, cognitive decline, etc.). By appointing a trustworthy power of attorney, you know that you are in good hands. And, if the power of attorney performs poorly, there are legal safeguards in place to remove him or her from the position.
Estate planning works on both sides of the veil, so to speak. It allows you to control how your assets are distributed after you die, as well as how to protect them while you are alive. By setting up trusts (whether inter vivos or testamentary), you can ensure that your assets are safeguarded against potential lawsuits or challenges.
You can protect your assets so that your heirs get the most out of your estate after you die. In addition to those benefits, an estate planning attorney can also help you minimize tax obligations on your estate post-mortem.
Small Business Planning
Americans are very entrepreneurial, and a pandemic has not changed that cultural fact. Several businesses that were started during or immediately after economic collapse, recession, or serious global catastrophes include: General Motors, Hewlett-Packard, Burger King, Microsoft, Uber, Airbnb, and many more.
If you already have a business, then you know how precarious the times are. Having a business succession plan in the event of your death will protect what you have worked so hard for. If you’re just starting a new business, you should take protective steps as well. This includes purchasing top-notch insurance.
Taking Care of the Kids
Kids are resilient, but there is no denying that they, too, have gone through major changes in the past year. Kids are unable to go back to school, and they often see their in-person social lives shrink (if not disappear entirely). Though there is not much you can do about that, there are legal ways to take care of your kids’ future.
If your kids are under the age of eighteen and something happens to you, who will get them? Estate planning allows you to set up guardianship papers, putting your kids’ lives into the hands of trusted adults. Contact your proposed guardian before you appoint them into the position. Setting up guardianship is a “just in case” safeguard that, while unpleasant to think about, is still a must-do.
Pandemic or not, colleges will still exist in the future, and they will still likely be expensive. The IRS allows you to set up a 529 tax plan, which is a tax-advantaged program that allows you to save up for your kid’s college education. Each state is different, and every state has its own requirements, rules, and regulations for setting up such a plan. Contact an attorney to discuss your options.
Dealing with change can be scary and intimidating, particularly if you are not used to it. Fortunately, there are ways to manage the way we deal with these “winds of change.” Talk to an estate planning attorney to see how these legal safeguards can give you peace of mind.
Labor Day has been around since the late 1800s after it was deemed a federal holiday in 1894. Labor Day has pretty much always been observed the first week in September. The holiday celebrates the achievements of the American labor force, and citizens get a day off to reflect on how hard they have worked.
You’ve worked diligently to get where you are, and you need to ensure that you are protecting your assets and accomplishments. The legal system provides documents and tools to serve as asset safeguards. In this article, in honor of Labor Day, we’ll discuss the protections that estate planning offers your hard work.
Estate Planning 101
While estate planning is a way to prepare for the distribution of your assets after you die, that’s not all this legal field is about. There is another side to estate planning that is just as important: the protection and preservation of assets. This includes minimizing tax obligations on your assets so that your heirs get the most out of your estate after you’re gone.
Estate planning helps you protect your assets by providing a framework in the event that you’re incapacitated. Though estate planning is vital after death, it also is important during life.
An estate planning attorney can help you minimize your tax obligations (legally) by navigating the tricky tax code. There are loopholes and maneuvers that a savvy attorney will recognize, but it takes a lot of experience to minimize taxes to the full.
Asset protection also comes in the form of protection against lawsuits. This does not mean protection against getting sued (lawsuits are common in a litigious society like America’s), but estate planning can help take your assets out of the reach of a lawsuit. There are legal vehicles (trusts, for example) that take the assets out of your name and protect them. Once that money or property is beyond reach, there is also a chance that someone’s motivation to sue you might drop.
Let’s start with one of the most common documents associated with estate planning: a will. A will is a legally enforceable document. This document spells out how you want your assets—whether personal or financial—distributed when you die. The will sets the parameters of and parties to which the property will transferred. This is the easiest and cheapest way to start an estate plan.
However, a will is, by no means, the be-all, end-all of estate planning. Even with a valid will, you still have to go through the drudgery and expense of probate court. A trust is one way to avoid probate court.
Trusts are three-party fiduciary relationships that involve you (the donor), the person to whom you want to transfer property (the beneficiary), and a third party who holds the property/asset until you want the beneficiary to have it (known as the trustee). There are many, many different types of trusts, but two of the big ones to know are: inter vivos and testamentary.
Inter Vivos Trust
As you may have guessed (if you have a rudimentary knowledge of Latin), this trust is created while you are still living. You transfer your assets into the trust, and this protects your money while you’re alive. If you choose to make your inter vivos trust revocable, it can be changed, amended, or even cancelled. But, if protecting your assets is the #1 priority, you consider making the trust irrevocable. An estate planning attorney will help determine which is best.
Conversely, a testamentary trust is created when you die. In a trust document, you express your wishes as to how you want your property distributed upon your death. When you die, those wishes are honored. A trust is not only a great way to protect assets from legal challenges, it also can help you avoid probate court.
This brief overview has hopefully helped you realize that estate planning and asset protection offer a lot of protections to conscientious workers looking to safeguard what they have worked their whole life to have.
Visit our website and learn more about estate planning.
When it comes to the ongoing coronavirus pandemic, we never know how quickly things will change. Many states are still debating whether to send kids back to school, while others have already made the choice to reopen the schools, albeit with some precautions. Whatever the outcome, one thing is clear: you need to make sure your kids are protected for the upcoming school year and beyond.
There are several different ways in which estate planning and its related legal fields can help you plan for your child’s future and protect them from harm. This article will serve as a guide to the basic legal strategies for keeping your kids safe.
When you think of trust funds, you might assume that they are just for the ultra-wealthy. Images of Ivy League schools and mansions may come to mind. However, that is a misconception, as trust funds are for everyone.
A trust fund involves three parties: the beneficiary (your kid[s]), the donor (you), and a neutral third party, called a trustee. The donor, which is also called a grantor in some states, will create a trust fund, which holds and manages the grantor’s assets on behalf of the beneficiary. The trustee oversees the fund. The grantor sets the terms and conditions for distribution of the trust fund, as well as how the assets are to be held or invested.
Trust funds can take the form of a simple bank account, where the grantor deposits money that is owned by the trust, as opposed to an individual person. Over time, the fund will grow. You don’t just have to place cash in the trust fund—you can also put other assets like real estate or stock into the fund.
In order to set up a trust fund, you will need to meet with an attorney. You and the attorney will set up stipulations and name beneficiaries. Examples of stipulations include monthly payments to beneficiaries or restrictions on how beneficiaries can spend the money. You, as the grantor, get to decide these parameters.
Next on our list is guardianship. If something happens to you while your kids are still young, the state will need to ensure that a guardian is chosen for the children. By setting up guardianship papers now, you can be the one to make this decision (as opposed to the government).
The kids’ guardian can be a relative or close friend. The guardian should, obviously, be someone responsible, who can attend to the kids’ day-to-day needs. Above all, make sure that you consult with your proposed guardian before naming them as such.
Tax-Advantaged College Savings Plans
It goes without saying that college is very expensive. Even scholarships don’t always cover every financial expense your child will run into while in college. The IRS offers tax-advantaged college savings plans (known as 529 plans or “qualified tuition plans”) that let you put aside money for your kids’ education.
These college saving plans often have a lower tax rate, which makes them preferable when compared to other means of saving money. These 529 plans are sponsored by educational institutions, state agencies, or state governments, so they will differ based on where you live and where your kids are planning to attend college.
Review Life Insurance
If you’re a new parent who has life insurance, make sure your life insurance policy allows your kids to be the beneficiaries if you die. Even if you’re not a new parent, you should check that your life insurance policy is structured in the most advantageous way possible. (And, of course, if you don’t have life insurance, you should absolutely consider buying it).
Again, this list is by no means the be-all, end-all of keeping your kids protected. When it comes to estate planning, there are a lot of ways that you can help your family’s specific situation. Contact an estate planning attorney today and find out more about our services.
Shark Week is fast approaching, beginning on August 9th and ending on August 16th this year. Shark Week is not canceled, contrary to what some rumors are saying, and Discovery Channel apparently has some awesome new footage for us to enjoy (while safe on our couches, of course).
Shark Week has us thinking about some of the legal “sharks” we might run into. Luckily, unlike a Great White in the ocean, the law gives you ways you can protect yourself against these not-so-nice characters, as long as you act fast. Here is an overview to protections that are in place in estate planning to keep your and your loved ones’ health and finances safe.
Protection Against a Bad Power of Attorney
In some ways, the power of attorney role in estate planning is one of the most dangerous. A bad power of attorney can be considered the “Bull Shark” of misconduct—it doesn’t get the headlines the way the Great White does, but it is responsible for the most attacks.
A power of attorney is the person in charge of someone’s finances and healthcare when the person is too incapacitated to make these decisions on his or her own behalf. The POA has a lot of power. Luckily, state and federal governments have realized the need to protect citizens—especially elderly, vulnerable people—against power of attorney misconduct.
Failure to Comply
Perhaps the most common type of power of attorney misconduct is failure to comply. When a power of attorney makes a decision or acts in a way that is not in the best interest and/or is against the wishes of the donor (the person who appointed the POA), that should be brought immediately to the attention of the court.
For example, if the POA spends the donor’s money on a new car for him- or herself, this is blatant misconduct and theft. By bringing this to the attention of an attorney or elder advocate, the POA can be revoked. The abusive POA can also face criminal charges and/or a civil lawsuit.
Coercion in Creating the POA
Another type of power of attorney abuse has to do with the formation of the POA. If a person is forced or coerced into appointing someone as power of attorney against his or her will, that can be brought to the attention of the court and revoked.
There are several ways that a POA can be abusive—colloquially, a POA has even been nicknamed a “license to steal”—but, luckily, contacting an elder advocacy organization such as the AARP or a state ombudsman can put a stop to misconduct. The state can also even bring criminal charges against the bad actor.
Bad-Faith Will Contests
A will contest in “bad faith” occurs when someone attempts to challenge or overturn a will without acting fairly and honestly. Perhaps the person knows that the will is valid, but he or she is bringing the contest as a way to pressure the beneficiaries into settling it out of court and giving him or her something to avoid the legal hassle.
In Florida, if a court finds that you are contesting a will in bad faith, the law explicitly requires the bad-faith party to pay attorney’s fees for the other side. This applies even if your claim was based on law or in fact—bad faith is bad faith.
Good-Faith Will Contests
On the flip side, contesting a will in good faith is a valid way to fight misconduct in a will through the legal system. Perhaps you believe that some part of a will is fraudulent. In Florida, you can contest a will through probate court. Usually, you must submit your challenge to the will before the probate process is over.
Early Prevention: Spotting the Warning Signs
The AARP is an advocacy organization dedicated to helping the elderly. On the organization’s website, the AARP has listed several signs of financial abuse against the elderly. One big “red flag” is when an elderly person starts to show a lack of knowledge about important financial matters. For example, the person might have been sharp and engaged before, but, now, when asked about a large withdrawal from their checking account, he or she is nonplussed. This is a sign that something might not be right.
Elderly people who are physically frail and/or isolated are at a high risk for elder abuse. Pay attention to “new friends” who pop up out of nowhere. Also, keep an eye on questionable behavior by family members, especially those who have a history of substance abuse, mental/physical ailments, financial problems, and/or lack of employment. According to the New England Journal of Medicine, these perpetrators are most likely adult children or spouses (though they can be anyone).
Keeping wary of the “sharks” in our lives and the lives of our elderly/disabled loved ones is vital. There are people who may—intentionally or negligently—try to take advantage of those in vulnerable positions. By being attentive and bringing problems to the attention of the court immediately, you can prevent abuse or misconduct.
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As any cursory glance at the news will tell you, Florida does things a little differently when compared to the other 49 states. Probate court in Florida is no exception.
One major difference is that you’re almost always going to need a lawyer. In other states, executors of a will (the people charged with managing a deceased person’s estate) can fill out the paperwork themselves and rely on the court clerk’s office to help them. This is not the case with Florida. In Florida, the courts are not staffed to help you with this particular task—you need to hire a probate attorney.
For executors, this article will serve as a guide to the FAQs of Florida probate court, but this guide cannot replace actual legal advice.
When Don’t You Need a Lawyer?
As you may have noted, we used “almost always” when describing your duty to contact an attorney as an executor. There is an exception. When you’re dealing with a very small estate, you can go through “disposition without administration.”
Disposition without administration comes into play when the person who paid for the medical bills and/or funeral of the deceased wants the deceased’s assets (of which there are few) released to them. If the person requesting disposition without administration is not the same one who paid the funeral/medical bills, there are consent requirements before such disposition can happen. The catch-22 is that you will likely need to hire a lawyer to figure out whether you can qualify for disposition without administration.
Can’t I Just Change the Title to the Property in the Will?
If property is the main asset in the estate, you might be thinking that simply changing the title to the property listed in the will is enough, if you record the will. However, title insurance underwriters in the state of Florida won’t recognize this legal maneuver as a valid way to convey title.
First, the underwriters don’t know if this change is fraudulent. The deceased person is, well, deceased, so they don’t get to affirm that the change in title is what they really wanted. Secondly, there are certain situations where property cannot pass this way—and these situations almost always involve creditors.
Can’t Find the Heir—Now What?
A “missing heir” is the term used to refer to a person who is listed in the will as the beneficiary but is now unavailable and cannot be found. Under Florida law, the executor can deposit the missing heir’s share of the proceeds into the court’s registry after selling the property.
Note that the missing heir is not the same thing as a missing owner of record. If the latter is not dead/has not been declared dead, then Florida probate code is inapplicable. The situation gets much more complicated, and it’s quite likely that a conservator will be appointed.
Let’s say that the estate didn’t qualify for disposition without administration. There is a chance that it might qualify for summary administration, which requires a lawyer but is also faster and cheaper. Florida has a definition of “homestead” that allows unlimited value. So, if the estate has a very expensive homestead property but little to nothing else, this estate can go through summary administration.
Another reason an estate could qualify for summary administration is if the deceased has been dead for over two years. In Florida, there is no deadline by which probate must be started. You could start probate fifty years after the deceased’s date of death (however, that isn’t exactly ideal).
Do I Have to Go Down to Florida to Appear?
It’s understandable, during the current pandemic, that you would not want to travel down to Florida. Luckily, your physical presence is almost always not required for probate unless there is a dispute that requires an actual hearing. Generally, probate can be done via email, “snail mail,” phone, and other digital means.
If this seems confusing, don’t worry, as your lawyer will be able to explain in layman’s terms what you need to do in order to wrap up an estate quickly and efficiently. Contact a probate attorney for further guidance, even if you believe your estate could fall into the “disposition without administration” category.
Read more about Florida probate.
For a while, the idea of a “trust” or “estate” was thought of as a tool of the wealthy who had large mansions and companies. However, estates and trusts are for everyone, and trust administration is a top that can (and likely will) come up for every family, regardless of financial status. In this article, we will give you an overview of trust administration. This is not intended to replace the advice of an attorney, as every family is different and has their own specific needs.
What is a Trust?
A trust is a tri-party fiduciary relationship. The first person is called a “trustor.” A trustor transfers the property to the second party, who is called a “trustee.” The trustee holds the property for the benefit of party #3, who is known as the “beneficiary.” The trustee will hand over the property to the beneficiary at a date predetermined by the trustor. Usually, the beneficiary gets the property after the turn a certain age or upon the death of the trustor.
What is Trust Administration?
Trust administration refers to the rights and duties of the second party—the trustee. The trustee must manage the trust according to the terms and conditions of the trust document that the grantor has written. The trustee must manage the trust for the benefit of the beneficiary. A trustee is always encouraged to work alongside an attorney in order to make the management process easier and clearer.
Who Can be the Trustee?
It is possible to name the same individual to the position of trustee and the position of executor of your estate. There are some who recommend that two different people be the trustee and executor, as a way to put checks and balances in place. But, if you name the trustee and executor as the same person, it will minimize legal expenses, as the lawyer only has to communicate with one person.
However, placing the same person in both roles requires a massive amount of trust in the individual. The individual must be responsible, as he or she is personally liable for the trust in certain situations.
Trustees are obliged to strictly abide by the trust’s terms. If the trust prohibits or mandates something, the trustee must do everything in his or her power to stick to the terms of trust.
A big taboo in trust administration is using trust assets for your own benefit. This and other trust-related wrongdoing will lead to a court holding the trustee accountable, whether the court mandates repayment or strips the trustee of their title. A trustee who commits wrongdoing can even be sued in a court of law for restitution and damages.
Can You Decline an Appointment?
Both offices have a lot of responsibility. If you are appointed to either and don’t feel that you can take on that responsibility, you are in luck, as declining is perfectly legal. If you are offered the job of executor and decline, the court will name someone else in your stead. If you decline the job of trustee, the grantor can just replace you with someone else. Trust administration can get complicated, so there is no shame in declining the position if it seems outside your wheelhouse.
Trust administration has the potential to either be very simple or very complex (like everything in law, really). Trusts and trust administration are topics about which you should contact an attorney, as opposed to going on DIY legal sites. It’s important to ensure the trust is done correctly to avoid any unintended results.