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  • Julie Ann Sombathy

Frequently Asked Questions About Wills, Trusts, and Estate Planning

Updated: Sep 29, 2019

Q: What is a will, and why do I need one?


A: A Will is nothing more than a letter to the probate Judge, telling the court who you want to be in control of your estate (your Personal Representative) and how you want your estate to be distributed. A person is intestate when they have no Will. The intestate statute may call for distribution of your estate which is in contradiction to your wishes. For example, most people wish to distribute 100% of their estate to their spouse; under the intestate statute distribution is determined by the the make up of your survivors.  For example, if you are survived by your spouse and no lineal descendants, then 100% of your estate will be distributed to your spouse.  If you are survived by your spouse and children (or grandchildren in the case of inheritance by representation of a deceased child), then your spouse will inherit 100% of your estate.  So far, it sounds okay, doesn't it?  The intestate law takes a turn however when you add children who are not both you and your spouse's children to the equation.  For instance, if your surviving spouse has children who are not YOUR children, then your surviving spouse will inherit 50% of your estate and your children will inherit 50% of your estate.  Likewise, if you have children who are not also your suriving spouse's children, the estate will be divided 50/50 between your surviving spouse and your children.  Chances are either you or your spouse have children from a prior marriage, and this fact can greatly impact the distirbution of your estate under the intestate law.


Q: Does a will avoid probate?


A: No. A Will requires probate because a Will is like a letter to the probate Judge. If you write a Will odds are at some point after your death your estate will have to be probated.


Q: Why do I want to avoid probate?


A: Probate prices in Florida are considered high. Average attrition of an estate in Florida caused by probate expense is between 3%-10% of the value of all the assets going through probate. Florida statutes provide that the attorney may be paid 3 percent of the first million dollars of assets in the probate estate. Thereafter, there is a decreasing scale for payment of this percentage fee. This percentage fee is in addition to hourly rate for any “extraordinary” expenses such as assisting the Personal Representative in a real estate closing. The Personal Representative is also entitled to a fee which is usually equal to the attorney’s percentage fee under the statute. For this reason as well as the time involved in the average estate, most people wish to avoid probate, or at least minimize their exposure to the probate process.


Q: What is a living trust, and why do I need one?


A: A living trust is a document which creates an entity that will survive your death. The primary purpose of a living trust is to avoid probate. A secondary purpose and the former driving force behind the desire to have a living trust is the avoidance of estate tax. Substantial changes to the estate tax law in the last decade have significantly lessened the need for most people to do complicated estate tax planning via revocable living trusts. A third purpose of creating a living trust is to consolidate your assets and prepare for administration of your assets during your lifetime but in a time where you are not able to care for yourself. A living trust can avoid probate after your death and in many cases guardianship during your lifetime. The decision of whether or not to declare the living trust should be made with the advice of an attorney.


Q: Does a trust avoid probate?


A: In most cases, yes. Even though a person establishes a living trust, many do not follow through with funding the living trust. For this reason, the beneficiaries of a person with a living trust may also have to probate their estate to transfer assets to the trust which they failed to do during their lifetime. In addition, most people in Florida choose not transfer their homestead into their living trust and after their death the homestead must also be transferred through probate.


Q: What is a Durable Power of Attorney, and why do I need one?


A: A Durable Power of Attorney is a document in which you give someone the right to be you. This person, depending upon the scope of powers you confer upon them, may do any number of things as if they were you including closing bank accounts, taking out loans, selling real estate and the like. A Durable Power of Attorney can be invaluable in protecting your assets and maintaining your lifestyle in a time of incapacity not only in your old age but at any time in your life.


Q: What is a Designation of Healthcare Surrogate, and why do I need one?


A: A Designation of Healthcare Surrogate is a document created by Florida statute. In this document you name a surrogate to act for you in your health care decisions when you are unable to do so for yourself. To be clear, no one needs a Designation of Healthcare Surrogate unless they have a clear desire regarding their care in the instance of a serious injury or illness.


Q: What is a Living Will, and why do I need one?


A: A Living Will is a document in which you state your desires for life support and other treatments such as the withholding of food and water. I always recommend that my clients execute a Living Will in addition to a Designation of Healthcare Surrogate so that if the Designation of Healthcare Surrogate is ever deemed an invalid document by the courts or though statutory repeal, your desires for your healthcare will be known. Otherwise, there is no guarantee that you will not end up on life support for a long term. To be clear, no one needs a Living Will unless they have a clear desire regarding their care in the instance of a serious injury or illness.


Q:  What is a HIPAA Release, and why do I need one?


A:  Every time you go to any kind of health care professional these days, you have to fill out mulitple forms about your privacy rights, and many times, indicate any persons you want to have access to your medical information.  The law requiring the disclosure and your consent is called HIPAA.  A HIPAA Release is an all in one document which works anywhere at any time to give your Health Care Surrogate, or anyone you choose to name, full access to your providers, records, and information.  The HIPAA Release works hand in glove with the Designation of Health Care Surrogate to smooth the way and make your surrogate's job a lot easier.


Q:  I own my homestead in my name alone.  What happens to my homestead after my death? Does my will control its distribution?


A:  If you are survived by a spouse, minor children, or adult dependent children, your will does not control what happens to your homestead.  The Florida Constitution and statutes dictate distribution of your homestead in that your surviving spouse will receive a life estate and your children will receive a remainder interest.  Alternatively, your spouse may make an election to take as tenants in common with your children on a 50/50 basis.  There are time limits to this spousal election, so a surviving spouse should seek legal advice asap if they find themselves in this situation.  For more information about Homestead Law or Tenants in Common, check out our Frequently Asked Questions on Homestead and Real Estate.


Q: What other documents are there that I might need to complete my estate plan?


A: There are several other documents which could make up your complete estate plan in addition to Will or Trust, Durable Power of Attorney and Designation of Healthcare Surrogate. Many times my clients wish to execute a Designation of Preneed Guardian. This document is like a letter to the probate Judge stating who you wish to act as your guardian in your incapacity. You can designate separate persons to act as guardian of your person (the person in charge of making decisions for you such as where you would live and who your doctor will be) and your property (the person in charge of your assets). Another document which my clients find useful is an Appointment of Agent to Dispose of Bodily Remains. Basically this document allows you to name someone to be in charge of your funeral and disposition of your remains. Both of these documents are used most often in second marriages or in family situations where there is strife between the parents and children or among the children. These two documents ensure that during your lifetime or at your death there are clear directives to the court and the funeral home as to who you desire to handle your affairs.


Q: What is the average cost of an Estate Plan? Will I be charged a consultation fee for meeting with an attorney to discuss my estate planning needs?


A: The cost of estate plans vary greatly depending on the needs of the individual client. Without stating any specific fees, a range which would represent my current 2019 fees would be between $350 for a single document to in the area of $6,000 for a more complex plan for a married couple. I

generally charge a $150 consultation fee; however, when a client hires me during that consultation to prepare documents and pays my fee for same at that time, I usually waive the consultation fee.


Q: How often should I update my estate plan?


A: Generally, every 3-5 years. The law is ever-changing, so documents that were acceptable 10 years ago may not be appropriate today. In any 3 year period either the durable power of attorney statute or the health care surrogacy statute will be revised by the legislature. Additionally, circumstances change and you should have your documents reviewed to be sure that both meet your needs and goals are met by your estate plan documents periodically. The most glaring example of this is people who did their estate planning in the mid-90's when the "exemption equivalent" was $600,000 as compared to the current figure of $5.45 million. Old planning often fails to take into account the huge change in the exemption equivalent amount, many times with disastrous results.

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