Florida Estate Planning: Is a Will Contest Clause in Florida Valid? How About a Trust?

Will Contest Clauses are generally included to prevent children or beneficiaries from attempting to dispute their portion of an estate. In some states they are valid and many others like Florida they are not valid by statute.

Given that a No Contest Clause in a Will is invalid in a Florida Probate case, should they be used in Florida? If your will is contested and the end result under the state statute may be the same, it may provide any benefit to include the no contest language.
Today people move quite often and may have assets in other states that do recognize Will Contest clauses. Given that one of these situations may enable a no contest clause to be enforced, it might be a good idea to include them in your Florida Estate Planning Documents.


Under the Florida Trust Code a Florida Revocable Trust is not able to have a contest clause, unless the right to revoke the trust terminated prior to October 1, 1993.
While its not possible to have a no contest clause in a Florida Revocable Trust, Florida does allow a trust to specify the laws of another state to be used in interpreting and administering the trust. So in effect, by drafting your trust correctly, you can have a no contest clause.

There are several ways to accomplish the desired results from a no contest clause in a will or trust. To discuss your specific issues and how one might benefit you, contact a Florida Estate Planning Lawyer or Boca Raton Estate Planning Lawyer.

Florida Probate With Living Trust: Is Probate Required?

Is Florida probate required if the decedent had a living trust?

Most people do not transfer all of their assets into a Florida Revocable Trust prior to their death. If their home, or other personal property was not transferred into the trust prior to their death, a Florida probate may still be required to properly dispose of the remaining assets. Often bank accounts, IRA's, land, business interests, or other assets are not transferred property.

The probate will typically take the remaining assets and follow the instructions of the Florida Will to distribute them. If the will directs the assets to a trust it is called a pour-over will.

What happens if the Florida will directs the assets to a non-existent trust. Unless the Florida will contemplates this, the assets will be transferred by the residuary clause in the will or in the case that this does not exist, they will transfer under the Florida intestate statutes or as if there was no will.

If you are looking to find out about Florida beneficiary rights, or how property should be transferred in a Florida probate, contact a Florida Estate Planning Attorney.

Florida Estate Planning: Divorce and Effect on Revocable Trust under Florida Law

Often a Florida Revocable Trust is not modified promptly upon a divorce. If the trust is subject to Florida law, Florida Statutes 736.1105 can amend the trust when the prior spouse is named as a beneficiary and the other spouse creates the trust.

736.1105 Dissolution of marriage; effect on revocable trust.--Unless the trust instrument or the judgment for dissolution of marriage or divorce expressly provides otherwise, if a revocable trust is executed by a husband or wife as settlor prior to annulment of the marriage or entry of a judgment for dissolution of marriage or divorce of the settlor from the settlor's spouse, any provision of the trust that affects the settlor's spouse will become void upon annulment of the marriage or entry of the judgment of dissolution of marriage or divorce and any such trust shall be administered and construed as if the settlor's spouse had died on the date of the annulment or on entry of the judgment for dissolution of marriage or divorce.

If you have a joint trust that was not addressed in a divorce decree or annulment or you have recently been divorced, you should Contact a Florida Estate Planning Attorney to review your trust to make sure your ex-spouse is treated as per your intentions and not what your documents state.

The Trustee's and Beneficiary's Guide to Florida Trust Accountings

Under Florida's new trust laws, generally, the Trustee of an irrevocable trust is required to keep beneficiaries of the trust reasonably informed about the trust and its administration. This article provides a simplified guide to Trustees and trust beneficiaries regarding the new trust law related to this duty to inform and account.

BENEFICIARIES DEFINED. This duty to inform and account under the new law is owed to a "qualified beneficiary" of an irrevocable trust. A "qualified beneficiary" is defined as any living beneficiary who currently receives trust income or principal or would receive trust income or principal if the current beneficiary's interest terminated.

REQUIREMENTS. To meet a Trustee's responsibilities to inform and account, the Trustee is required to do the following:

Within 60 days after acceptance their position as Trustee of the trust, the Trustee shall give notice to the qualified beneficiaries of the acceptance of the trust and the full name and address of the trustee.


Within 60 days after the date the Trustee becomes aware there is an irrevocable trust, whether by the death of the Grantor (person(s) who established the trust) or otherwise, the Trustee shall give notice to the qualified beneficiaries of the trust's existence, the identity of the Grantor(s), the right to request a copy of the trust instrument, and the right to accountings.


Upon reasonable request, the Trustee shall provide a qualified beneficiary with a complete copy of the trust instrument, including amendments.


A Trustee of an irrevocable trust shall provide a trust accounting, to each qualified beneficiary annually and on termination of the trust or on change of the Trustee.


Upon reasonable request, the Trustee shall provide a qualified beneficiary with relevant information about the assets and liabilities of the trust and the particulars relating to administration.

REPRESENTATION. The new Florida trust law permits a person to act as a representative for another person (i.e., the beneficiary). Therefore, any notice, information, accountings, and reports sent to a representative have the same effect as those sent to the person being represented, and actions taken by a representative bind the beneficiary. There are several different categories of representation, including:

Fiduciaries: This includes a guardian of the property, an attorney-in-fact, a Trustee or personal representative. Additionally, a parent may represent an unborn or minor child if no guardian of the property has been appointed.


Virtual: If not otherwise represented, a minor, incapacitated, unborn, unascertainable, or un- locatable person may be represented by another person having a substantially identical interest.


Court-appointed: The court may appoint a representative for a person the court determines is not otherwise adequately represented.

In each of the above situations, representation is precluded in matters as to which the representative has a conflict of interest with the person being represented. This restriction, however, does not apply to either of the following two remaining categories of representation:

Powers of appointment: a holder of either a general or a special power of appointment may represent and bind objects and takers in default of the power. However, generally, a beneficiary with a power cannot represent others while the beneficiary is serving as sole Trustee.

Grantor-designated: a Grantor may appoint or designate a person to represent and bind a trust beneficiary or to receive notices, information, reports, and accounts on the beneficiary's behalf with a few exceptions such as a designated representative who is also a Trustee may not represent or bind a trust beneficiary while serving in that capacity.

TRUST ACCOUNTING.
A trust accounting must be a reasonably understandable report from the date of the last accounting or, if none, from the date on which the Trustee became accountable, that adequately discloses the following information:

The accounting must begin with a statement identifying the trust, the Trustee, and the time period covered by the accounting.


The accounting must show all cash and property transactions and all significant transactions affecting administration during the accounting period, including compensation paid to the Trustee and the Trustee's agents. Gains and losses realized during the accounting period and all receipts and disbursements must be shown.


The accounting must identify and value trust assets on hand at the close of the accounting period.


The accounting must show significant transactions that do not affect the amount for which the Trustee is accountable, including name changes in investment holdings, adjustments to carrying value, a change of custodial institutions, and stock splits.


The accounting must reflect the allocation of receipts, disbursements, accruals, or allowances between income and principal when the allocation affects the interest of any beneficiary of the trust.


The Trustee shall include in the final accounting a plan of distribution for any undistributed assets shown on the final accounting.


WAIVERS AND USE OF INVESTMENT STATEMENTS.
Certain Trustees, at the request of the trust beneficiaries, might not want to incur the costs associated with preparing annual statutory trust accountings. Under the new Florida trust law, a qualified beneficiary may waive the Trustee's duty to account. The waiver can be effective until the beneficiary withdraws the waiver previously given. Withdrawals of prior waivers are effective only with respect to accountings for future periods. Waivers and withdrawals of prior waivers must be in writing. Importantly, the Grantor of an irrevocable trust cannot waive the Trustee's obligation to provide an annual accounting to the beneficiaries. This power to waive is held strictly by the beneficiaries.

Another option to reduce the trust accountings costs of trust administration is to utilize the monthly, quarterly, or annual statements issued by the trust advisor reporting all trust activities as the trust accounting. Assuming the accounting is relatively simple, the situation might be appropriate for using the investment statements as the annual accounting. The Trustee could determine whether to prepare an additional summary or exhibit to comply with Florida law, depending on the circumstances. Alternatively, all of the beneficiaries could consent to accepting the investment statements in lieu of a formal accounting.

Whether you are a Trustee or a beneficiary, you must be aware of these guidelines and should consult with your trust administration attorney if you have any questions regarding how the new Florida trust law impacts you in relation to the trust.

Are Adopted Adults Considered "Decendants"?

A common question with Florida Estate Planning is whether an adult who is adopted is considered a child. We often recommend that our clients place language in their Florida Wills or Florida Revocable Trusts that deal with these issues. The typical language deals with adopted children above or below a certain age. Most people want to consider children adopted at a young age the same as a child who is naturally born.

Occasionally it is necessary for an adult to be adopted. This can happen to provide medical coverage or for other reasons. In these cases, individuals may not want to consider these adopted individuals the same as their naturally born or younger adopted children.

Gerry Beyer wrote an article on a Texas case where the court found that an adopted adult is not treated as a descendant. Mr. Beyer points out that this case seems to be one where the court struggled with the facts and created bad case law to deal with the facts.

The moral is one that should be used in all estate planning documents. When making gifts to classes such as “children,” “grandchildren,” and “descendants,” settlers and testators should indicate whether adopted children are included; and if adopted children are included, the age by which they need to be adopted should be included in the class.

The Difference betweeen a Florida Revocable Living Trust and a Florida Irrevocable Trust

A Florida Revocable Trust is a trust created during the life of an individual which can be modified, amended, or revoked at anytime during their life. Often they are used to:

1. Avoid Florida Probate;
   
2. Keep your assets and decisions private;
   
3. Simplify after death distributions;
   
4. Increase the amount of the estate tax exemption for a couple;
   
5. Simplify the management of the beneficiary designations on property and other assets; and
   
6. Keep property separate in the case of a divorce.
   

The downside to a revocable trust is that assets are considered your personal assets in the case of creditors. There are techniques that can use a Florida Limited Liability Company (LLC) in conjunction with Florida Revocable Trust to protect assets. In most cases, these are not implemented and the trust by itself will offer no asset protection except in the case of a subsequent marriage and divorce.

A Florida Revocable Trust cannot be changed after the trust is created. A Florida Revocable Trust becomes irrevocable after the Settlor or Grantor dies. Florida Revocable Trusts are often used for:

1. Estate tax reduction;
   
2. Removing Life insurance proceeds from one's taxable estate;
   
3. Asset protection for the creator;
   
4. Asset protection for the beneficiaries;
   
5. Charitable Estate Planning; and
   

To determine what type of Florida Trusts would be best for you, you should contact a Florida Trust Attorney or a Florida Estate Planning Lawyer.