Relocating to Florida: Estate Plan Review and Update
In my recent article, I discussed the importance of being certain about your legal domicile. Once you have established your new domicile in Florida, it is a good idea to review your existing estate plan to make sure it is valid and will continue to effectively carry out your wishes.
VALIDITY OF WILLS AND TRUSTS FROM OTHER STATES
Florida, like most states, recognizes the validity of written wills, trusts, durable powers of attorney, and health care advance directives from other places as long as they are valid under the laws of the state or country where executed. So the good news is that your estate plan documents from your prior home are typically still valid even after you become a Florida resident. But valid documents from another state will not always be effective documents.
DURABLE POWER OF ATTORNEY AND HEALTH CARE DOCUMENTS
A durable power of attorney is an important document that allows your appointed agent to take legal and financial actions on your behalf if you are incapacitated. If validly executed under another state’s laws, Florida will recognize the document as being property executed, even if it was not executed in accordance with Florida law. But if the durable power of attorney document was executed after October 1, 2011, and provides that it becomes effective only when the principal who executed the document later becomes incapacitated, then that durable power of attorney document will not be effective, or honored in Florida. This is called a “springing” power of attorney, and has been eliminated in Florida for all documents executed after October 1, 2011. Many other states still allow springing powers, so this is one issue that will need to be reviewed and addressed.
Also, if the durable power of attorney document will be used to transfer Florida real estate, it must be recorded along with the deed, and must be executed using the same formalities required for a deed in Florida. Therefore, the document will require two witnesses and must be properly acknowledged, which most often means notarized. So if another state allows a durable power of attorney document to be executed with only two witnesses and no notary, or with only one witness and a notary, that document will be valid in Florida, but will not be effective to allow the appointed agent to convey real estate on behalf of the incapacitated principal.
Finally, even though your estate plan documents are valid and effective, it may be a good idea to update your durable power of attorney and health care advance directives (i.e. Designation of Health Care Surrogate, and Living Will), especially if they are several years old. As you might imagine, local health care providers and financial, legal, and real estate professionals in Florida are familiar and most comfortable with Florida documents. You might experience resistance or delays when a local provider or professional is presented with an unfamiliar document from another state or country. In addition, the Florida laws governing powers of attorney and health care advance directives are updated regularly, so completing new documents after relocating can provide you with the latest improvements available under those laws.
EFFECTIVENESS OF WILLS AND TRUSTS FROM OTHER STATES
HOLOGRAPHIC WILLS
Florida does not recognize holographic wills. A holographic will is one that is handwritten, signed and dated, but not witnessed. About 27 states, including Michigan, allow some form of holographic will.
HOMESTEAD
The most notable, potential issue relates to the Florida constitutional limits on who will take any homestead property owned by a decedent. The purpose of these constitutional limits is to protect surviving spouses and minor children from becoming homeless due to the death of a homestead owner. Here is a link to my Florida Homestead Primer article.
In summary, your primary residence is your homestead. A homestead cannot be devised (i.e. left by will or through a trust that serves the same function as a will) if the deceased person has a surviving spouse or minor child, except that if there is only a spouse and no minor child, the homestead can be left entirely to the spouse by will or trust.
Importantly, these restrictions do not apply to a homestead owned by a husband and wife as tenants by the entirety, which is probably the most common form of ownership for married people. In a tenancy by the entireties, the surviving spouse takes title to the entire homestead regardless if there are any minor children and regardless of any contrary provision in the will or trust. Similarly, if one spouse owns real estate as a joint tenant with rights of survivorship with someone other than their spouse, that property is not subject to homestead devise restrictions.
The Florida Constitution and statutes will apply to a homestead property owned by the deceased as follows:
- If there is a surviving spouse and minor children, regardless of what any will or trust provides, the spouse automatically gets a life estate, and all children (both minors and adults) get the homestead in equal shares after the surviving spouse dies. Or, the surviving spouse can elect to take a one-half share immediately as a tenant in common with all of the deceased person’s children, who will own their one-half share equally between them.
- If there is a surviving spouse and no minor children, but adult children, and the deceased spouse devised the homestead by will or trust to the surviving spouse, the surviving spouse takes the homestead outright. The adult children get nothing.
- If there is a surviving spouse and no minor children, but adult children, and the deceased did not devise the homestead to the surviving spouse, regardless of what any will or trust provides, the surviving spouse gets a life estate, and the children share the property equally after the surviving spouse dies. Again, as in #1 above, the spouse can instead elect to take a one-half share as a tenant in common with the children immediately.
- If there is a surviving spouse and no children, the surviving spouse takes the homestead outright in all cases.
- If there is no surviving spouse, but there is one or more minor children, all children, both minor and adult, take equal shares of the homestead as tenants in common.
Obviously, these outcomes can alter and frustrate your estate plan. If, for example, your existing estate plan that was prepared before you became a Florida resident divides your property by giving one child specific property (maybe money or property in another state) and another child your Florida homestead property, that will not work if you are married or if any of your children are minors. This situation often complicates the estates of people in second marriages and with blended families. In those cases, pre-nuptial or post-nuptial agreements might be in order to preserve each spouse’s estate plan.
PERSONAL REPRESENTATIVE AND TRUSTEE
Florida probate law limits who may serve as a personal representative or trustee of a Florida estate or trust. To qualify as a personal representative of a probate estate, an individual must be a Florida resident, or if not, must be one of the following:
- A legally adopted child or adoptive parent of the decedent;
- Related by lineal consanguinity (i.e. in the direct line, up or down, such as between grandparent, parent, child, grandchild) to the decedent;
- A spouse or a brother, sister, uncle, aunt, nephew, or niece of the decedent, or someone related by lineal consanguinity to any such person; or
- The spouse of a person otherwise qualified under 1-3 above.
These limitations do not apply to individual trustees of a Florida trust.
Corporate or commercial personal representatives of a Florida probate estate or trustees of a Florida trust, such as a bank or trust company, must be qualified to serve as a fiduciary in Florida.
Therefore, if you have named a good friend or trusted adviser in another state to serve as the personal representative of your probate estate, or if you have named a bank or trust company with no ties to Florida to serve as a fiduciary, those appointees will not be permitted to serve in those roles if you die as a resident of Florida or have a Florida-based trust.
CONCLUSION
Relocating to Florida, or to any other state, most likely will not require a complete rewriting of your estate planning documents. But for the reasons set forth above, and to give you the peace of mind you want from your estate planning, a careful review and possible revisions or updates are recommended in almost every case.
