Florida Estate Planning Considerations
Florida is a Common Law State, which means the rules governing the ownership, division, and inheritance of income and property acquired by a husband or wife during their marriage hold that subject to various qualifications, each spouse owns and has complete control over their own her income and property.
Last Will and Testament
The minimum age of a person competent to make a will is 18 (or an emancipated minor).
The number of witnesses necessary to execute a will is two.
Uniform Transfers to Minors Act (UTMA)
The custodial arrangement terminates when:
The minor child reaches age 21* for custodial transfers made by irrevocable lifetime gift, will, trust, or exercise of a power of appointment.
The minor child reaches age 18 concerning other custodial transfers.
The minor child dies.
* Florida permits UTMA accounts to continue until the minor attains age 25 as long as the custodian provides written notification to the minor of the right to terminate the UTMA account and withdraw all funds at age 21. If the minor does not act within the time frame provided in the notice, then assets must remain in the UTMA account until the minor attains age 25.
Dying without a Last Will, the Florida laws of Intestacy.
The estate goes to the surviving spouse, as follows:
- If there are no surviving descendants, —100% of the estate
- If there are surviving descendants, all of whom are also lineal descendants of the spouse, —100% of the estate
- If there are surviving descendants, one or more of whom are not lineal descendants of the spouse, —50% of the estate
- If there are surviving descendants, all of whom are descendants of the spouse, and the spouse has one or more descendants who are not descendants of the decedent, —50% of the estate
If there is no surviving spouse, or if a portion of the estate does not go to the spouse:
- 100% (or applicable portion) of the estate goes to descendants, per stirpes (see Fla Stat. §732.104)
If there is no surviving spouse or descendant:
- 100% to surviving parent or parents equally
If there is no surviving spouse, descendant, or parent:
- 100% of the estate goes to siblings and the descendants of a deceased sibling, if no lineal descendants, per stirpes
If none of the above:
- Intestacy laws outline further distribution steps to the level of grandparents and related individuals. See Fla. Stat. §732.103.
- If no legally described recipient can be found, estate assets go to the state of Florida.
Transferring Property with Ease Through Florida Trust Laws
Trusts are an estate planning tool that can either supplement or completely replace a will. While the basics of creating a trust can be reasonably straightforward, Florida trust laws demand specific methods and creation requirements to make a trust valid. There are also various types of trusts that are available in the Sunshine State. This includes trusts where the beneficiary is a family member, a friend, a charity, or even a household pet.
The following table outlines the specifics of Florida’s trust laws.
Florida Statutes Chapter 736: Florida Trust Code
Florida trust laws state that a trust is created only if:
- The settlor can create a trust.
- The settlor indicates an intent to create the trust.
- The trust has a definite beneficiary or a charitable trust, a trust for an animal’s care, or a trust for a noncharitable purpose.
- The trustee has duties to perform.
- The same person is not the sole trustee and sole beneficiary.
Methods of Creating Trusts
A trust may be created by:
- Transfer of property to another person as trustee during the settlor’s lifetime or by will or other disposition taking effect on the settlor’s death;
- Declaration by the owner of the property that the owner holds identifiable property as trustee; or
- Exercise of a power of appointment in favor of a trustee.
Under Florida trust laws, a trust may be created only to the extent the purposes of the trust are lawful, not contrary to public policy, and possible to achieve. A trust and its terms must be for the benefit of its beneficiaries.
A trust may be created for charitable purposes. These include, but are not limited to:
- The relief of poverty;
- The advancement of arts, sciences, education, or religion; and
- The promotion of health, governmental, or municipal purposes.
Trust of the Care of Animals
According to Florida trust laws, a trust may be created to provide for the care of an animal alive during the settlor’s lifetime. The trust terminates on the death of the last surviving animal named in the trust.
Florida follows the Florida Fiduciary Access to Digital Assets Act (modeled on the Revised Uniform Fiduciary Access to Digital Assets Act) to ensure that testators can retain control of their digital property and plan for its ultimate disposition.
Florida does not impose an inheritance tax.
Credit Estate Tax
Florida imposes an estate tax equal to the maximum credit permitted for paid state estate and inheritance taxes under IRC Sec. 2011. However, the current federal tax code does not permit a credit for state estate or inheritance taxes paid. Therefore, there is no credit estate tax in effect at this time.
Generation-Skipping Transfer Tax (GST Tax)
Florida imposes a GST tax equal to the maximum credit permitted for paid state GST tax under IRC Sec. 2604. However, the current federal tax code does not permit a credit for state GST tax paid. Therefore, there is no current GST tax.
Florida does not impose a gift tax.