Just another WordPress site

Category: Estate Planning

  • Marriage Penalty Removed for Conveyances Between Spouses

    Question: My wife and I purchased a property before we were married. How can we protect the property now that we are married in case something happens to one of us?

    This is a question that we are asked frequently by our clients. Married couples in the State of Florida take title to property as tenants by the entireties (TBE). The generally accepted language for taking title is “John Doe and Jane Doe, husband and wife.” Under Florida Law this implies TBE and offers the protections from creditors of one or the other spouse in addition to constitutional protections if the property is a principal residence.

    When you purchase a property prior to marriage you take title as co-tenants (similar to a partnership). The default language for taking title between non-spouses is “John Doe and Jane Doe” or “as co-tenants.” Under Florida Law this assumes each owns fifty percent of the property. This has certain implications for survivorship and devise, especially if the heirs of each of the co-tenants is not the same. There are other ways to hold title between non-married individuals such as “joint tenants” which are outside the scope of this article.

    In Florida, we have no State income tax, but we collect other taxes such as sales and use tax and conveyance taxes on the transfer of real property; called documentary stamp taxes (also referred to as doc stamps). These doc stamps are calculated on the consideration of the transfer or the amount of any mortgage or other indebtedness encumbering the property.

    Prior to July 1, 2018, a married couple could correct the title to property to reflect their holding title as a married couple (TBE) without a conveyance tax, if the transfer was done within one year of the marriage. Outside of that, there was the potential for doc stamps on the consideration.

    Recently, the Florida Legislature has fixed this “marriage penalty” by allowing a married couple to transfer property between themselves without doc stamps. Seems fitting since there was already an exemption for transfer tax subsequent to a dissolution of marriage. Real estate law practitioners had been lobbying the legislature to make this fix for many years. If you want to read the specifics you can review Section 201.02, Florida Statutes (2019).

    A real estate attorney is your friend when it comes to issues like this. There are too many ways to create inadvertent title issues with the use of an online or office supply store form. Rarely do the forms give accurate advice to make sure your conveyance conforms with Florida Law. If you need help with fixing the title to your property to make sure it reflects a subsequent marriage, please get it touch with our office.

    This article is one in a series based on questions we frequently get from our clients. It is accurate as of the date of publication, however the law changes. You should rely on the advice of a knowledgeable attorney in order to make sure you are getting the most up to date information.

  • Your Estate Plan Needs a Checkup

    Many aspects of estate planning is based upon the current laws in effect at the time you create your estate plan. Occasionally the legislature changes the laws and those changes can have negative consequences on your estate plan. To avoid the unintended consequences of an outdated estate plan you should consult on a regular basis with your trusted estate planning professional to make sure your plan is ready in the event it’s needed.

    Not to worry though, most changes enacted by the Legislature include grandfathering provisions to preserve those properly executed estate documents from losing their power simply based on a change in the law. One example of this was the 2011 changes to the durable power of attorney provisions. These changes removed the springing powers clauses in documents executed after October 1, 2011. There were several other changes as well, but there was also a grandfathering provision which protected those documents executed prior to the change. So long as they were lawful at the time, their power remains valid.

    There’s always a catch. With all of that said, certain documents are subject to acceptance by the person they are presented to. As banks and other financial institutions update their procedures and review process for certain documents they come to expect certain forms of documents. Presenting an outdated form to a bank may result in non-acceptance. In order to avoid any issues you should have your documents reviewed periodically.

    You can rely on the attorneys at Law Offices of Oates & Oates, P.A., to make sure your plan is complete. Call or email to schedule a consultation for your estate planning checkup.

  • Ladybird Deed: An Enhanced Life Estate

    How can I change title to a piece of real property to affect my estate plan and avoid probate, yet still maintain complete control over it during my lifetime, including the ability to un-do the transfer, and not just the right to occupy for as long as I am alive?

    Florida recognizes an enhanced life estate, otherwise known as a “Lady Bird Deed.” The name originates from the methods President Lyndon B. Johnson used to convey his property to his wife, ‘Lady Bird’ Johnson. The conveyance is one where the grantor reserves unto themselves full and complete control of the property, including the ability to un-do the transfer. In other words, the grantor doesn’t need the consent of the remainder interests as would be required by a traditional life estate. With a Lady Bird Deed, the original grantor can sell, use, mortgage, profit from, and otherwise deal completely with the property during their lifetime.

    In a traditional life estate, the remainder interests are contingent only on the life of the life tenant. The life tenant does not have complete authority to deal with the property. If needed, in order to un-do a life estate, the life tenant (original grantor) would need the signatures and consent of the remainder interests or beneficiaries.

    While this form of transfer has the same benefit as a life estate with regards to probate avoidance, it protects the grantor’s/life tenant’s ability to make changes should his or her circumstances change during their lifetime.

    A Lady Bird Deed is just one choice of many in a proper estate plan. A transfer of this nature requires very specific language for to be done properly and to avoid the creation of title issues and unintended consequences. Therefore you should consult with a knowledgeable attorney to consider what is right for you and your family. Part of our practice at Law Offices of Oates & Oates, P.A., includes counseling clients on their estate planning, probate, and real estate needs. Please contact our office to set up a time to review your estate plan.

  • Don’t Lose Your “Last Will”

    Clients creating their estate plans in our office have two choices for the storage of their original Last Will and Testament. Clients can keep their Last Will in our office or keep it with their other important papers. The importance of maintaining your Will in a safe place where your loved ones can find it is crucial. Florida Law provides that when an original will that is known to have existed cannot be located, there is a presumption that its maker (the testator) destroyed the will with the intent to revoke it. In order to overcome this presumption the testator’s loved ones will have to convince the probate court that the will was lost or destroyed without the decedent’s knowledge or consent and without their intent to revoke it. This becomes a time consuming and costly exercise which unnecessarily complicates the probate process.

    In order to reestablish a lost will or admit a photocopy of your will to the probate court you have to overcome the presumption above, and you will need one or more witnesses to testify about the execution and content of the will.

    Our recommendation is to keep your original will in our office for safe keeping. You take home one or more copies with our contact information attached. If and when you family needs to find your original will, they know just where to begin their search.

    If you need assistance with your estate plan please contact us for more information.

  • 4 Steps to a Simple Estate Plan

    A bit of planning now can save countless headaches later. It doesn’t surprise me to learn that nobody seems to want to plan for the inevitable. However, making a complete estate plan is necessary to avoid unintended results and unnecessary expenses after your passing. While it is true that the Legislature has “intestacy laws” in place that control an individual’s estate should they pass without a will or other estate plan, it is usually a vast departure from what our clients expected. The good news is that making a simple (and comprehensive) estate plan is easily accomplished. Follow these four simple steps to prepare your simple state plan:

    1. Last Will and Testament – Everyone needs their own Last Will. This is the document that sets out who will be in charge of administering your estate and how your estate will be divided.  The proper execution of your will is paramount. A will made in another state may not necessarily meet the requirements of the State of Florida. Because there can only be one original of this document it is important to keep your Last Will updated.

    2. Durable Power of Attorney – Because a Last Will only controls your estate after you pass, everyone should have a Durable Power of Attorney (DPOA). The DPOA is a comprehensive document permitting the person named therein (the “Attorney-in-Fact”) to act for you in the event you are incapacitated or otherwise unable to make decisions on your own. The “durable” nature of the document means that the document continues to be an effective grant of power to the Attorney-in-Fact while you are incapacitated. As with the Last Will, this document is required to be signed in a specific manner to be valid.

    3. Living Will – If you remember the Terri Schiavo case (wiki article here) there is no need to explain why you need a Living Will. It is the document that expresses your desire to be removed from life support in the event you are incapacitated and it has been determined by your physician that (i) you are in a permanent vegetative state; (ii) have been diagnosed with an end stage condition or (iii) have a terminal illness. This is not a order to pull the plug if the conditions are met, but instead it names an individual person with whom you place the authority of making the decision along with the recommendation of your physician. A Living Will is not the same as a “do not resuscitate.”

    4. Health care surrogate – This document has become even more important in recent years. Where a Durable Power of Attorney mainly concerns financial and business matters, the Health Care Surrogate (HCS) is a directive wherein you appoint one or more persons to make medical decisions for you in the event you are unable. Just like the Living Will, the HCS is not an order which preempts the medical advice of your physicians, but instead a document that gives your physicians the ability to consult the individuals named about important health related matters should you be unable to.

    Contact our office to see about scheduling an appointment to begin your simple estate plan.