Probate assets include assets for which the deceased person was the sole owner or jointly owned assets which lacked provisions for automatic succession of ownership at death. Non-probate assets include jointly held property for which ownership includes the “right of survivorship.” In this situation, the surviving owner automatically owns the property when the other owner dies. Other examples of “non-probate assets” are assets titled in the name of a trust or assets that have formal “beneficiary distribution” assignment to them, such as IRAs, life insurance policies, or payable-on-death accounts.
Probate is a court-supervised process for identifying and gathering the assets of a deceased person, paying their debts, and distributing their assets to beneficiaries only after some of these assets are used to pay the costs associated with probate court.
The two main types of probate administration are formal administration and summary administration which occurs if assets are less than $75,000. If assets are less than $6,000 a non-court supervised administration proceeding called disposition of personal property without administration occurs. In Florida, the person in charge of the estate is called the personal representative. The personal representative is in charge of giving notice of the probate proceedings to “known or reasonably ascertainable” creditors in order to ensure all of the deceased’s debts are paid.
Beneficiaries are the people who inherit assets from the deceased.
If you are looking to avoid probate through estate planning or are currently going through probate or ancillary probate and need legal advice, contact one of our experienced attorneys at (941) 906-1231.
To read the 2015 Declaration of Preneed Guardian for Adult, follow this link: Preneed Guardian for Adult
Follow this link to read the 2015 Declaration of Preneed Guardian for Minor Child: Declaration-of-Preneed-Guardian-for-Minor-Child
Question: Why would someone convey property using a lady bird deed?
Answer: There are multiple advantages of using a Lady Bird deed. First, the transfer of the real property occurs pursuant to the remainder provision in the deed and will not require probate to effectuate the transfer. Second, the owner/life tenant can maintain the homestead tax exemption. Third, it gives the owner/life tenant greater control than with a typical life-estate deed. The remainderman can be changed and a future conveyance or mortgage would not require the remainderman’s cooperation or approval. Fourth, there are various tax advantages. The remainderman receives the property at the life tenant’s death with a ‘stepped up basis’ for federal income tax purposes. The Florida Department of Revenue does not levy documentary stamp taxes against Lady Bird deed transfers. Finally, a Lady Bird deed can be useful in planning for Medicaid eligibility for an unmarried applicant because the creation of the deed is not considered to be a transfer of assets by the state. Contact Board Certified Elder Lawyer Babette B. Bach, Esq. to find out if a Lady Bird deed would be appropriate for transferring interests in real property you own.
Question: What is a ‘Lady Bird Deed’?
Answer: A Lady Bird deed, or “enhanced life estate deed,” is a method for transferring an interest in real estate. With a Lady Bird deed, the owner of a property reserves a life estate in the property, entitling the grantor the right to live on the real property for the rest of his or her life. The deed also identifies a ‘remainderman’, who, at the grantor’s death, receives title to the real property. What makes Lady Bird deeds unique is that the grantor/owner/life tenant also reserves the right to encumber the property, keep all income from the property, and sell the property without the approval of the remainderman. In short, the remainderman only get what’s left on the date of death of the property owner/life tenant. This deed is designed to leave the owner with all the powers of a solely-owned parcel but with an automatic conveyance of whatever is left upon the owner’s death to the remainderman. It can be a useful tool.
Question: I have just taken over my parent’s trust as the successor trustee. Do I need to apply for an EIN for the trust?
Answer: It depends on whether the trust has become irrevocable. If you become successor trustee of a revocable trust prior to the death of the grantor, then you will not need to obtain an employer identification number (“EIN”). The grantor will continue to report all of the income and expenses of the trust on his or her individual tax return using their own Social Security number. However, you should know that once the grantor dies, the trust becomes irrevocable. Once the trust becomes irrevocable, the trust becomes a separate tax-paying entity. You will need to complete the application for an EIN as soon as possible so you can properly report all post-death transactions under the trust’s EIN. If you are the trustee of a revocable or irrevocable trust, contact Bach & Jacobs, P.A at (941) 906-1231 for guidance on the proper administration of the trust. Attorney Fred Jacobs is a Board Certified Tax Lawyer and can advise you on the legal requirements that trustees must comply with under the Florida Trust Code and the Internal Revenue Code.
Q: Do I need an EIN for my revocable living trust?
A: No. If you created a trust, funded it with your money, and reserved the right to revoke it, then the IRS does not consider it a separate tax-paying entity. The the trust will not require its own taxpayer identification number or employer identification number (referred to as an “EIN”). In fact, you cannot obtain an EIN for a trust that is revocable. Such a trust does not file its own tax return. If you would like to know if a trust would be appropriate for your estate plan or tax planning, contact Bach & Jacobs, P.A. at (941) 906-1231. Attorney Fred Jacobs is a Board Certified Tax Lawyer and can advise you on the use of trusts in your planning.
Attorney Babette B. Bach will give a presentation on estate planning for parents of children with special needs on October 14, 2014 at the Lakewood Ranch YMCA. Topics will include planning for a child with special needs with a particular emphasis on special needs trusts.
If you have a child with special needs and would like legal advice on how to properly plan for your child in your estate planning, please contact Bach & Jacobs, P.A. at (941) 906-1231 for an initial consultation.
Ever wonder what happens to a deceased person’s online accounts after they pass away?
With so many people going ‘paperless’ and communicating online, the Personal Representative of a probate estate may have trouble identifying online accounts and obtaining the digital content in those accounts. The state of Delaware recently passed a law that gives estate attorneys, executors and other fiduciaries more access to those online accounts after a person passes. The Wall Street Journal says the Delaware law “could set a national trend” as policy makers “wrestle with how to handle the digital remains people leave behind.” Florida may become one of the next states with similar legislation—a committee of the Florida Bar has been formed to propose such legislation.
The attorneys at Bach & Jacobs, P.A. make efforts to stay on the cutting edge of new technologies that assist our clients, including the Personal Representatives that we represent. We recommend all trust and durable power of attorney documents specifically authorize access to this information. We can also help you identify your digital assets and ensure that they are fully accounted for in your estate planning documents.
You can read the Wall Street Journal article here: http://blogs.wsj.com/law/2014/08/20/new-law-expands-access-to-google-facebook-accounts-of-deceased/
