Estate Law Florida

When an individual dies in Florida, the law instantly assumes that the title to all of that person’s property as well as the responsibility for his debts transfers to his “estate.”  The “estate” literally is born at the exact same moment that the individual passes.  Florida law creates this legal entity – the Estate of John Doe, Deceased – to insure that the individual’s property is protected and that there is a smooth transition of legal title, hopefully in accordance with the decedent’s wishes.  It is important to note that probate only becomes necessary when a person dies with assets in his or her SOLE name and without a designated beneficiary.  Some examples of assets that are not subject to probate are:  life insurance policy with a spouse designated as beneficiary, bank account that pays on death to a child, real property owned jointly with right of survivorship.

If an individual dies with a will, then the first question is finding the document and insuring that it is valid under Florida law.  Wills must be written under Florida law, for example.  Mistakes in the document can mean that the decedent’s wishes will be ignored as the “intestacy statutes” take the place of a will when there is no Will or if the Will is found to be legally invalid or void.

Under either the terms of the Last Will and Testament, or under the language of the Intestacy Statutes, a personal representative is then appointed to oversee the estate, and acts in a fiduciary role.  Under the representative’s direction, the decedent’s property is accumulated and distributed, debts are paid, an accounting of what has occurred is finalized, and then the Estate is closed.  The legal entity that Florida law created to assist in the transfer of property ceases to exist.

Click here for more information on Florida Estate Law:  Foundations of Florida Estate Administration.

Here are answers to some of the more common Florida Estate Law questions that we are frequently asked:

What is a Fiduciary?

In Florida, the executor of a Will is referred to as a personal representative.  A personal representative is responsible for the administration of a decedent’s probate estate.  A trustee is the fiduciary responsible for implementing the terms of a trust.  According to the Internal Revenue Service, an executor is the person responsible for preparing and filing the United States Estate Tax Return and Fiduciary Tax returns.   Regardless of the terminology used and the specific duties, a trustee, executor and/or personal representative is responsible for the administration of a decedent’s estate.

What is Probate?

Probate is the court-administered process of distributing assets that did not have a pre-determined beneficiary and that were registered in the decedent’s sole name.  Even if there are no assets subject to probate, the original Will and a death certificate need to be filed with the probate court in the county of residence.  The trustee also needs to file a Notice of Trust with the court, if applicable.

Is there any Estate Tax Reporting?

Federal - Effective January 1, 2013, if the decedent’s gross estate exceeds $5,000,000 (indexed for inflation), then a United States Estate Tax Return, form 706, must be filed with the Internal Revenue Service.  It is due 9 months after the decedent’s date of death. Whether an estate tax is due depends on many factors, among them are the nature of the assets, the estate planning done by the decedent prior to death, and the decedent’s marital status.

Congress unified the Estate and Gift Tax tables, which means that an individual may give away up to $5,000,000 during life (gift) or at death (estate) before incurring any gift or estate tax.  The top marginal rate is now set at 40%.  Congress also left portability in place, which is good news for married couples.  Portability means that if a spouse dies without using all of his exemption, that his unused amount may be transferred to his surviving spouse if the executor makes a proper election.  For example, if John and Jane Doe are married and John has $6,000,000 in his name when he dies that he leaves to Jane, then none of John’s estate tax exemption is needed to avoid estate tax because married couples have an unlimited marital deduction on Federal Estate Tax Returns.  Jane now has the $6,000,000 from John plus her own $3,000,000 for a total estate of $9,000,000.  Jane, as executor of John’s estate, made a portability election so she gets John’s $5,000,000 exemption plus her own $5,000,000 exemption; Jane’s total available exemption from estate tax is $10,000,000.  Accordingly, Jane’s estate will not be subject to estate tax at her death.

Florida – If a federal estate tax return is due, then a copy of it should be filed with the Florida Department of Revenue along with an F-706.  If no federal return is due, then the fiduciary should prepare an Affidavit of No Florida Estate Tax Due, which should be recorded against the legal description of the Florida property, if any, and then filed with the probate court.

How do I value the estate?

To value the decedent’s gross estate (different from “probate estate”), the fiduciary must determine the nature and the fair market value of the assets the decedent owned on his or her date of death.  The Internal Revenue Code broadly defines someone’s assets, so everything from clothing to stock portfolios is includible.  The obvious assets are cash accounts, stocks, bonds, limited partnerships, and real estate.   The less obvious assets are life insurance proceeds (regardless of the beneficiary, if the policy was owned by the decedent), joint accounts, and tangible personal property.

Is there any income tax reporting?

Federal law A final 1040 is due for the year of death, covering the period from January 1st to date of death.  Also, a form 1041 will be due for the decedent’s probate and/or trust estate for the remainder of  that calendar year, which will cover the period from date of death to December 31st, and then annually thereafter until the close of the estate.  Ongoing 1041s will be required if there are trusts that continue after the period of administration.  A fiduciary may elect to file on a fiscal year instead of a calendar year, but many people find it easier to follow the calendar year to which they are accustomed and to which traditional tax reporting documents like 1099s are geared.

Florida law There is no Florida income tax and the fiduciary should consult with his or her accountant to determine whether an intangible tax is due in connection with the estate and/or trust.

When do I have to file various tax returns?

Generally, when a Federal Estate Tax Return is due, the tax reporting in connection with the estate administration process takes approximately two years from date of death.  If no federal return is due, the time frame is greatly reduced.

TAX RETURN DUE DATE 1ST EXTENSION 2ND EXTENSION
Form 1041: Trust & Estate Income Tax Return 15th day of 4th month following close of tax year. Estates: Form 2758
Trusts: Form 8736
Extends deadline 3 months
Estates: Form 2758
Trusts: form 8800
Extends deadline 3 months
Form 706: Federal Estate Tax Return 9 months after decedent’s date of death Form 4768
Extends deadline 6 months
N/A
Form 709:  Federal Gift Tax Return April 15th following year of gift Form 4868
Extends deadline 4 months
Form 2688
Extends deadline 2 additional months
F-706:  Florida Estate Tax Return 9 months after decedent’s date of death Submit copy of Federal form 4768
Extends deadline 6 additional months
N/A

What information will my attorney need to assist me to administer an estate?

Your attorney will need:

  • The decedent’s original will;
  • At least two death certificates without the cause of death;
  • Copies of bank statements for the month of the decedent’s death;
  • Copies of brokerage statements for the month of the decedent’s death, including any certificates of deposits;
  • Copies of any stock or bond certificates that the decedent may have held outside of a brokerage account;
  • Copies of any general or limited partnership certificates or agreements;
  • Copies of mutual fund accounts;
  • Copies of deeds to real property, wherever situate;
  • Copies of mortgages, mortgage notes and related amortization schedules;
  • Copies of IRA, Keogh, pension and/or annuity plans and related account information;
  • Life insurance policies;
  • Past three (3) years’ 1040s;
  • Copies of any gift tax returns (Forms 709) which have been filed, if any;
  • Copies of any state income tax returns that may have been required to file for the past three years;
  • Copies of certificates of title for any automobiles the decedent owned;
  • List of all personal property the decedent owned including the estimated value;
  • List of collectibles valued in excess of $3,000 and any insurance riders;
  • Safe deposit box number(s), location and inventory of same;
  • Name, telephone number and address of the decedent’s accountant;
  • List of all pending lawsuits, if any, whether the decedent is the plaintiff or defendant;
  • Any other evidence of assets the decedent owned not otherwise noted above.

If you need an attorney to handle Florida estate law, please feel free to contact the Law Offices of Adrian Philip Thomas, P.A. to see how we might be of assistance in your particular situation.  The initial consultation is free.

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