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But the Will said so!: How assets can be inherited outside of a Will

by Jillian Spanger

But the Will said so!: How assets can be inherited outside of a Will

Jillian T. SpanglerWhen most people get a Last Will and Testament, they tend to believe that that document is the end-all, be-all of inheritance, but that is not always the case. How certain assets are titled greatly impacts how that asset is inherited once a person passes away.

For ease of understanding, let’s play out a scenario. A mom, Martha, who is a widow, wants to give her estate equally to her son, Sam, and her daughter, Dorothy. She has a Will that states that everything in her estate will pass equally to her two children, Sam and Dorothy. However, there are other issues, outlined below, which don’t allow that provision to truly take effect.

Insurance Policies – Designated Beneficiaries

This situation is probably the most readily thought of. If a person has an insurance policy with a named beneficiary, the benefits of that insurance policy go to the benefit of that named beneficiary. So, if Martha had a life insurance policy for $50,000.00 and she only named Sam as the beneficiary, Dorothy would not see a cent of that $50,000.00, regardless of what the Will says. This can also become more frustrating for Dorothy, because the insurance company will probably not speak to Dorothy or give her any advice or information about the policy because of privacy concerns. In addition to insurance policies, this can also apply to retirement accounts, investment accounts, mutual funds, and other financial vehicles that have beneficiary designations.

Bank Accounts – Joint Accounts and Transfer-on-Death Accounts

This is the situation that catches most heirs off guard. Section 655.79 of the Florida Statutes provides that, unless there is proof of fraud or undue influence or convincing proof of contrary intent, the ownership of any account in two or more names will transfer to the survivor when one person dies. So, if Martha put Dorothy on her checking account jointly so that Dorothy could help Martha handle paying her bills, Dorothy would become the owner of that account when Martha dies, regardless of what the Will says, unless there is proof of fraud or undue influence, or clear and convincing proof that Martha intended that the account’s ownership be governed by the Will provisions.

Bank Accounts – Transfer-on-Death Accounts

Transfer-on-death (TOD) accounts, also known as pay-on-death (POD) accounts, is another concept that similarly catches heirs off guard. Similar to the policies that hold beneficiary designations, a transfer-on-death bank account transfers ownership of the account to a designated beneficiary when the owner passes away. So, if Martha had a savings account titled “Martha, TOD Sam,” Dorothy would not have any ownership interest in that account, regardless of what the Will says.

Ownership in Real Estate

Real estate ownership is governed by the Deed that transferred ownership to the current owner. The first question is: How does the current owner hold title (As a fee simple owner? As a joint tenant with right of survivorship? As a life tenant?)? And the second question is: Is there any deed provision that governs the transfer of property upon death (A life estate deed? An enhanced life estate deed (a.k.a. a “Lady Bird Deed”)? A survivorship interest?)? These issues must be addresses on a case-by-case basis.

How to Make the Will Provisions Count

There are three main ways to make sure the above scenarios don’t happen. The first is to not name any beneficiary at all, so that the estate would become the beneficiary by default. The second option is to have the named beneficiary be the estate of the principal, meaning Martha names “Estate of Martha” as the beneficiary on her various policies and accounts. Note that not every institution will allow this kind of designation and will require a named person. The third is to have the beneficiaries mirror the Will provisions, meaning Martha names both Sam and Dorothy as 50/50 beneficiaries. This final option is the most recommended, as it is the only option that allows the asset to pass without the necessity of probate.

Boswell & Dunlap LLP has been handling estate planning and probate matters since its establishment in 1900. Should you need assistance with your own estate planning or navigating the probate of someone else’s estate, please call to set up an appointment at 863-533-7117.

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Estate PlanningAugust 21, 20200 comments
by Savannah Young Cerullo

Wills Are Not Automatic

Savannah Young CerulloI’ve lost track of the number of times I have heard someone say, “Oh, we don’t need to do a probate.  Mom had a Will.”  Somehow, this notion has become very commonplace, and it is just so wrong.  I blame the movies.  The rich relative dies, usually under mysterious circumstances, and all the family gathers in the lawyer’s mahogany-swaddled office to hear the Will read and discover who has inherited the family fortune.  Our hero walks away a rich man, leaving his villainous relatives pea green with envy.  This makes for lovely on-screen drama, but it is entirely fiction.

Firstly, it is very unusual in the State of Florida for a Last Will and Testament to be read out to one’s grieving relatives.  I have never seen it done.  Secondly, property does not transfer from a decedent (that’s lawyer-speak for “dead person”) to his relatives just because he had a Last Will and Testament.  Wills are not automatic!  When a person dies owning property, that property still has to be transferred to living people (or charities, trusts, favorite pets, etc.), and that is accomplished through a legal process known as probate*.

You may ask, then, why even have a Will?  The purpose of a Last Will and Testament is to direct the probate court as to how the testator (lawyer-speak for “person who made the Will”) would like his or her assets to be distributed.  If a person dies intestate (lawyer-speak for “without a Will”), Florida law dictates who must inherit that person’s assets, regardless of what the decedent may have wanted.  A Last Will and Testament also tells the probate court who should be named as the decedent’s Personal Representative, which is the person in charge of handling the probate process and making sure the assets are distributed.  A Last Will and Testament can also name a guardian for minor children; under Florida law, minor children, with some exceptions, will need a guardian to safeguard their inheritance for them until they come of age.  In short, a Will expresses the wishes of the decedent and guides the probate process.

So, don’t believe everything you see in the movies.  Money will not magically appear in your bank account just because Great Aunt Ida’s Will says it should.  Wills are not automatic.  If a person dies owning property, a probate will usually be needed to distribute that property, whether or not the person had a Will.

*There are ways to avoid probate: trusts, ladybird deeds, co-ownership, to name a few.  But that’s a blog post unto itself.

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Estate PlanningAugust 17, 20200 comments
by Boswell & Dunlap LLP

5 COMMON ESTATE PLANNING ISSUES

Estate plans are critical documents for anyone, not just those with large estates. An estate plan can give you peace of mind knowing that your assets will be handled how you wish, but there are also some issues that you may run into if you don’t adequately plan. Here are some common issues to avoid while making your estate plans.

1. Not Making an Estate Plan

You may put off making an estate plan for a number of reasons, but forgoing an estate plan means that your assets may not be distributed as you intended. Your family will also have to deal with the additional stress of handling your estate, on top of other final affairs.

2. Failing to Update Your Estate Plan

Life leads to many changes, and you should remember to update your estate plan to reflect these changes. Births, deaths, divorces, new property acquisitions, and other changes can require an update to your will. Review your will periodically with your attorney to make sure that it still fits your needs.

3. Not Making Plans for Disability

An unexpected long-term disability can drastically change your personal and financial plans. Set aside the time to decide who will handle your finances, care for your children, or make healthcare decisions on your behalf. You should make these choices legally binding by appointing a power of attorney and create a living trust to work on your behalf.

4. Not Transferring Your Life Insurance Policies to a Trust

Your life insurance policies are subject to a heavy estate tax, which can cause your beneficiaries to receive far less than intended. Protect your loved ones by making a life insurance trust the owner of your life insurance policies. This can prevent your policies from being taxed, and will prevent your beneficiaries from waiting several months to receive the payouts from your policies.

5. Not Seeking Advice from a Qualified Estate Planning Lawyer

Many of these mistakes can be avoided with the assistance of an experienced estate planning attorney. They can advise you as to your best options, ensure that your will or trust needs are met, keep your estate plans up-to-date, and help you make other decisions pertaining to your end-of-life plans.

At Boswell & Dunlap LLP, we are passionate about helping our clients find peace of mind in knowing that their wishes will be honored and their loved ones cared for, even after they are gone. Our Polk County estate planning lawyers are backed by more than 100 years of collective legal experience, so you can trust that your case is in good hands.

Contact our firm today to schedule a free consultation. Call (863) 533-7117 today.

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Estate PlanningJune 28, 20170 comments
by Boswell & Dunlap LLP

3 REASONS WHY YOU SHOULD CREATE AN ESTATE PLAN

Estate planning is the personal and legal process of establishing plans for how you want your estate – or the assets, property, and policies you own – to be divided upon your death. While many people think estate planning is something reserved for the elderly, it can and should be something everyone does. By creating a clear estate plan in according to your interests, you can ensure your loved ones and beneficiaries have an easier time handling legal matters after your passing, whether it’s expected or not.

At Boswell & Dunlap LLP, our estate planning attorneys have helped numerous individuals and families construct productive and legally sound plans that ensure their estate is handled according to their wishes, and that their loved ones do not have to struggle with the complexities of probate and other legal matters should they pass without a plan.

Clients who work with our estate planning team learn the importance of the legal instruments available, including wills and trusts, and benefit from experienced counsel that offers personalized and full-service support. However, not everyone understands what and how estate planning works, or why they should create one. Below are a few reasons why creating an estate plan, regardless of your age, is a smart idea:

  • Passing Away without a Will – One of the most important reasons to create an estate plan is to avoid the complications, expenses, and frustration that can arise when you pass away intestate, or without a will. When this happens, your estate will may be subject to probate and be dispersed without your direction, which may including property being given to certain family members and relatives you do not want to receive your assets. When you create a will and plan, you are able to decide the details how your estate should be divided, including to whom, when, and how.
  • Loss of Capacity – Estate planning tools can do more than just ensure things are handled as you wish after you pass. They can also protect you and your wishes should something diminish your mental or physical capacity to care and make decisions on your own. When you do not have a plan, the court will be tasked with appointing someone to handle your affairs. When you do have a plan, you can choose who will have this responsibility.
  • Large Families – In cases where individuals have large families, especially blended families and children from prior marriages, plans can help ensure that your estate is handled as you wish. Without one, legal battles can ensue and certain members of your family may not receive what you would have wanted. Plans can also ensure younger family members or dependent relatives are taken care of after you pass.

Creating an estate plan is a smart, reasonable, and forward-thinking decision that can protect you and your loved ones. At Boswell & Dunlap LLP, we have experience assisting clients from all walks of life throughout Polk County and beyond in a wide range of estate planning matters. To learn more about how we can help, contact us today.

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Estate PlanningFebruary 2, 20170 comments
by Boswell & Dunlap LLP

WHAT IS LEGAL GUARDIANSHIP?

A legal guardian is someone appointed with the legal authority to care for the personal and property interests of another person. Legal guardians can care for seniors, minors, and/or the developmentally disabled. A legal guardian’s job is to make the financial or medical decision for the person concerned, as they are considered incapable of doing so themselves.

GUARDIANS FOR SENIORS

If you’re planning for retirement, you might also want to start planning for end-of-life situations. While you may be in perfect health and nowhere near age-related illnesses, now is the time to prepare for a time when you can no longer easily care for yourself. Some people’s families have a history of dementia or Alzheimer’s, in which case it is their responsibility to plan for that eventuality even if they remain perfectly capable of self-care for the rest of their lives. After all, you would rather over plan than leave your family unsure of how to care for you if you develop a debilitating illness. You can appoint a legal and medical guardian for yourself in your will, meaning in the event of your mental incapacitation, the guardian can make financial and medical decisions on your behalf.

Adults sometimes find themselves in the position of caring for their elderly parents without knowing how to handle financial or medical decisions. In these cases, families can decide on one person who will be the guardian of the older family member. The guardian will be in charge of managing care, shelter, finances, and treatment of the elderly individual.

GUARDIANS FOR MINORS

In the unfortunate event a child loses their parents, he or she will become a ward of the state if a legal guardian was not chosen by the parents before their deaths. Similarly to a guardian for seniors, a guardian for minors ensures the child has food, shelter, financial management, and medical care. In addition, the guardian will guarantee the child receives an education until adulthood, after which the child will legally be able to make decisions on his or her behalf. It may be difficult to think about, but if you have kids, make a will that details whom you would like to be their legal guardian until they become adults. Whether the guardian is a grandparent, a sibling, or a trusted friend, make sure your kid isn’t relegated to the foster-care system.

GUARDIANS FOR THE DEVELOPMENTALLY DISABLED

If you know your child will be unable to care for himself or herself financially or medically after reaching adulthood, you can be appointed a legal guardian of your adult child. You will then be legally able to make decisions for your child when he or she is unable to do so.

Appointing a guardian can be difficult, as it requires you to think about situations you hope will never happen. However, make sure you make the difficult decision today to spare your relatives (or the state) from having to make harder decisions for you later. To legally appoint a guardian, you will have to rely on a good attorney. Contact us to speak to a guardianship lawyer about your case. We offer free consultations.

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Estate PlanningJanuary 12, 20170 comments