Frequently Asked Questions

Estate Planning is the process of arranging for the management and distribution of your assets after you pass away or become unable to make decisions due to incapacity. It involves creating legal documents such as Wills, Trusts, Powers of Attorney and Advance Directives to ensure your wishes are carried out regarding your property, finances and healthcare.

Florida Estate Planning is crucial for protecting your assets, providing for your loved ones, minimizing Estate taxes and avoiding Probate complications. Without a comprehensive Estate Plan, the state’s intestacy laws will determine the distribution of your assets, which may not align with your preferences.

Essential documents for Estate Planning in Florida include a Will, which outlines how your assets should be distributed; a Durable Power of Attorney, appointing someone to manage your financial affairs if you become incapacitated; a Health Care Surrogate designation, naming someone to make medical decisions for you and a Living Will, stating your end-of-life treatment preferences.

In Florida, a Will is a legal document that allows you to specify how you want your assets to be distributed after your death. This document also enables you to name an executor who will be responsible for carrying out your wishes as outlined within. Additionally, a Florida Will can address other critical matters, such as appointing guardians for minor children, setting up Trusts and specifying funeral arrangements. Creating a legally valid Will is a fundamental aspect of Estate Planning to ensure that your wishes are legally recognized and followed upon your passing.

A Trust is a legal arrangement where a trustee holds and manages assets on behalf of beneficiaries according to the terms specified in the Trust document. Trusts can serve various purposes, such as avoiding Probate, offering privacy, managing assets for minor children or individuals with special needs and reducing Estate taxes.

The most common type of trust is a Revocable Living Trust. You create the Trust while you are living and amend or completely revoke the Trust at any time. You are the trustee who can manage and access the trust property while you are capable. If you become incapacitated or pass away, your designated successor trustee will take over. The trustee will then manage and distribute your trust estate according to your instructions.

On the other hand, Irrevocable Trusts cannot be modified except under strict and specific circumstances. You transfer ownership of particular assets into the Irrevocable Trust, which legally removes all the rights of the person who created it, known as the grantor. While this type of Trust can severely limit the grantor’s options, it can be an effective solution for wealthy individuals seeking certain tax advantages and asset protections.

While not necessary for everyone, Trusts can be valuable tools in Estate Planning for various reasons, such as avoiding Probate, providing privacy, and appointing guardians and managing assets for minor children or beneficiaries with special needs. Revocable Living Trusts are commonly used in Florida to streamline the transfer of assets.

Most people should have a Will as part of their Estate Plan. However, you do not have to transfer your property to your beneficiaries through your Will. Instead, you can pass your property to your heirs through a Trust. So, which is better – a Trust or a Will?

Here are some benefits of each and other factors to consider.

1. Preventing Probate

Probate is the legal process of distributing and wrapping up your Estate. A legally valid Will simplifies the Probate process, but a Trust can eliminate the need for Probate altogether. Instead, the property will be distributed directly to your beneficiaries from the Trust by your successor trustee — the most common reason people establish Trusts to pass on their estate.

2. Confidentiality

When a Will is submitted to Probate it becomes public record — anyone can access information about your estate property and assets and what each beneficiary receives. A Trust can be created by a Will, but that means the provisions of the Trust also become part of the public record. On the other hand, only your beneficiaries and trustee have access to the contents of your Trust, if created during your lifetime. For many people, this confidentiality is a compelling benefit.

3. Planning for incapacitation

Your Will becomes effective after you pass away. It does not protect you or your Estate should you become mentally incapacitated. You will need additional Estate Planning documents, such as Powers of Attorney for healthcare and property, to plan for the possibility that you can no longer manage your healthcare and financial affairs. Without these documents, the court might need to appoint a guardian.

If you have a funded Revocable Trust, the successor trustee can step in and take over if you become incapacitated, though your property will not be distributed until after you pass away. A Trust can ensure that your Estate is properly managed even if you can no longer manage it yourself.

You should review your Florida Estate Plan every three, six, and nine years and as needed to keep current with significant life events such as marriage, divorce, births, deaths, or changes in financial circumstances.

Depending on the amount of the Estate and other aspects of your particular situation, an inheritance might be subject to estate tax, inheritance tax, and/or capital gains tax.

Estate Tax

The federal estate tax is based on the current fair market value of the Estate. Only Estates worth a minimum of $13.61 million in 2024 and $12.92 million in 2023 million will be subject to the tax. When an Estate does have to pay federal estate tax, the tax rate is 18% to 40% of the assets over the $13.61 million and the $12.92 million threshold.

However, there is an exception for spouses. If your spouse inherits your Estate, they won’t have to pay federal estate taxes even if the Estate is over the threshold. Unlike several other states, Florida does not have a state estate tax. In states that have an estate tax, some people may have to pay estate taxes to their state even if they are not required to pay federal estate taxes.

Inheritance Tax

The inheritance tax is not the same thing as the estate tax. The inheritance tax is paid by beneficiaries, while the estate tax is taken directly from the estate. Also, unlike the estate tax, which can be a federal and/or state tax, the inheritance tax is strictly a state tax. Inheritance tax rates vary depending on the state and the value of the inheritance. Florida does not have an inheritance tax, but six other states do.

Capital Gains Tax

If your beneficiaries inherit property and/or investments, they pay capital gains tax at the time they sell it. The tax is calculated on a “step up basis,” which means that the market value of the property is calculated as its value at the time they inherit it, not its value at the time you originally bought the property.

An experienced Estate Planning attorney can look at your assets as a whole and create a comprehensive plan to protect your family members from tax burdens.

There comes a time in most people’s lives when they need Long-Term Care, despite its exceedingly high costs. Medicaid planning involves identifying opportunities to preserve hard-earned assets when an individual, spouse or parent needs full-time nursing care.

As part of long-term care planning, Medicaid Planning is a strategy that allocates funds to support a healthy spouse in the case of a married couple or sets funds aside to supplement an individual’s family at death.

A Florida medicaid attorney can help with the two stages of Medicaid Planning:

• Advanced Estate Planning: This process involves transferring assets five years or more before an individual anticipates nursing home admission. Through careful Estate Planning, these assets can be used for the care of an individual or couple for the remainder of their lives and inherited by their children or heirs after death.
• Planning just before nursing home admission: While advanced Estate Planning is always recommended, it’s not always possible for every individual. With this type of planning, a Florida Medicaid attorney will transfer assets at or around the time of nursing home admission, before the Medicaid application.

Assets transferred within five years of application incur a penalty, meaning that Medicaid will not pay for nursing care for a period of time. During this period, non-gifted assets are used to pay for nursing care until Medicaid can cover the bills to ensure that care remains uninterrupted.

The cost of long-term nursing home care in Florida continues to increase. According to Genworth, in 2023, the monthly cost of a semi-private room and a private room in a Florida nursing home was $9,985 and $11,406, respectively. Many people believe they have too many assets to qualify for government assistance – but they are often wrong. Sadly, people pay out-of-pocket for their long-term care until they lose their home and life savings.

But with careful Medicaid Planning, you could possibly access the financial help you need to cover the cost of nursing home care. Medicaid Planning is the strategy of applying legal tools and techniques to help individuals qualify for Medicaid benefits. The cost of hiring a Medicaid Planning attorney is an investment in retaining your assets while qualifying for the benefits you need.

It’s helpful to look at the cost of a Medicaid Planning attorney in terms of the value they provide, instead of the money you spend. The process of applying for and receiving Medicaid benefits is arduous and time-consuming for the applicant. Furthermore, the government can impose severe penalties on individuals that make improper gifts or exceed the asset limit, including denial of benefits.

However, with appropriate planning, we can help you become eligible for Medicaid while still protecting the nest egg you’ve built over your lifetime.

Under normal circumstances, hiring a Medicaid Planning attorney is advisable at least five years before you begin retirement. It can be a complex process when an individual’s monthly income or assets exceed financial eligibility limits. Another complicating factor occurs when one spouse requires long-term care, but the other can still live independently.

While you can convert incomes and assets into non-countable assets, these transactions take time and require professional legal and financial assistance. Applicants can overcome the common challenges of determining how to divide and transfer these assets with an attorney’s guidance.

No one should apply for Medicaid until they have a proper plan for qualifying. Applying too early may cause a longer wait to qualify than necessary, while applying too late may require having to fork out sums of money to pay for the care you may never have needed to spend money on.

Moreover, improperly structured assets may lead to a denied application. Hiring a Florida Medicaid Planning attorney ensures your application is completed correctly in accordance with the law, speeds up the process and reduces administrative stress.

There’s often a misinformed panic around losing assets or having to sell one’s home. The state of Florida assesses a person’s income and countable assets to determine their financial eligibility to qualify for medicaid.

Countable assets include:

• Certificates of deposit
• Stocks, bonds, and retirement accounts
• Checking and savings accounts
• Non-homestead real estate
• Annuities
• Secondary vehicles
• Cash value of life insurance if it exceeds $2500

Non-countable assets include:

• A primary home and vehicle
• Income-producing properties
• Pre-purchased funeral plans
• Personal property and household belongings
• Life insurance policies with no cash value
• Up to $1,500 in cash set aside for burial

Your home may be considered a homestead under Florida law and an excluded asset for Medicaid qualification. In the event of death, an attorney can ensure your Estate Plan is properly structured to protect your homestead from Medicaid recovery — meaning it won’t be used to pay for healthcare costs.

There are various factors that influence the cost of hiring a Medicaid Planning attorney in Florida, such as;

• Marital status
• The applicant’s age
• A spouse’s and children’s age and health statutes
• The applicants’ financial status in terms of assets and income
• The urgency of the application
• Receiving gifts in the form of assets
• The existence of Estate Planning documents

Contact us to learn more about how we can help you and your loved ones with Medicaid Planning.

Concerning Medicaid appeals, handling responses properly is crucial to preserving appeal rights. Often, Medicare and Medicaid denials of claims in pre- and post-payments may be inaccurate. A Medicaid attorney will assess if the appeal denial is erroneous and take the correct legal action to properly execute the litigation process.

Someone who has too many assets to be eligible for medicaid can consult a Medicaid Planning attorney for advice and guidance. With careful Medicaid Planning, you may be able to receive the financial help you need without losing your assets.

Many people mistakenly believe they have too many assets such as their home equity or retirement accounts to qualify for government assistance, so they pay out-of-pocket for their Long-Term Care until their savings are gone.

Medicaid planning is Long-Term Care Planning as part of your Estate Plan. The goal of Medicaid Planning is to manage your financial eligibility and to preserve as many assets as possible so that you can qualify for medicaid as quickly as possible.

Contact us to learn more about how we can help you and your loved ones with Medicaid Planning.

To qualify for SSI or Medicare, the government limits how much an individual can have in the bank. An inheritance, or large sum payment, can disrupt this balance and jeopardize their benefits. A Special Needs Trust aims to ensure that this does not happen.

Instead of transferring the inheritance directly to a beneficiary (aka your loved one with special needs), the money will be transferred into a Special Needs Trust with a designated trustee, who will manage the funds on behalf of the beneficiary. And since your loved one will never have direct control over the money, Medicare and SSI administrators will not consider these funds when determining eligibility for benefits. The Trust ends when all the funds are spent or the beneficiary passes away.

While the trustee cannot give any money directly to your beneficiary, they can use the money to pay for a number of goods or services, including (but not limited to):

• Personal care and home health assistance
• Out-of-pocket medical or dental costs
• Vacations and recreational activities
• Education and training
• Vehicles
• Home furnishings
• Clothes and other belongings

A Special Needs Trust can be incredibly valuable when planning for your loved ones’ future.

Parents of a special needs child have different long-term planning concerns. Naming your child as the beneficiary of your IRA is one option for providing for their future financial needs.

Naming your child as the beneficiary can offer certain advantages, including:

• Rather than being subject to the standard 10-year time limit, payments to a child with a disability may be stretched out throughout their lifetime.
• Periodic payments help manage assets and ensure the child has funds to meet future financial needs.
• Periodic payments offer tax benefits. It allows tax payments to be spread out and can help take advantage of potentially lower future rates.

Unfortunately, there is one major disadvantage of using an IRA to provide for a child with a disability. As it is considered a source of income, it could impact their rights to other important benefits.     

A Special Needs Trust (SNT) is an important Estate Planning tool for parents who have a child with a disability. Also referred to as a Supplemental Needs Trust under section 732.2025 (8) of the Florida Statutes, it provides many of the same benefits as naming your child a beneficiary of your IRA. However, it also offers better protections:

• You can still spread out disbursements
• It avoids lump sum tax payments
• It does not impact your child’s rights to government aid or other benefits.

Various programs can help offset the cost of food, shelter, transportation, and medical care for a child with a disability. By not interfering with their eligibility for these benefits, a Special Needs Trust allows you to provide for ‘extras’ that would not otherwise be covered. This helps in ensuring an overall better quality of life.