Estate Planning Guide: Florida

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Florida Primary Estate Planning Considerations

1. Homestead Protections (Constitutional)

Florida has some of the strongest homestead protections in the country.

a. Restrictions on devise (who you can leave it to)

If the decedent is married and has minor children, the homestead cannot be devised (left by will) to anyone else.
If there is a spouse but no minor children, the home must be left to the spouse unless the spouse validly waives rights.
Improper devises are void, and the spouse/children take by statute.

b. Homestead creditor protection

The primary residence is generally exempt from most creditors during life and after death if it descends to heirs.
This protection can be lost if devised to a non-heir or placed incorrectly in a trust.

c. Homestead property tax benefits

“Save Our Homes” tax cap limits increases in assessed value.
Portability allows transfer of tax savings to a new Florida home.

2. Elective Share

Florida gives surviving spouses a 30% elective share of the decedent’s elective estate, which includes:

Probate assets
Many non-probate assets like certain trust assets, joint accounts, pay-on-death accounts, and even some retirement assets

Elective share planning is critical—especially in second marriages.

3. Florida Intestacy Rules

If there’s no will:

If all children are of both spouses, spouse gets everything.
If there are children from another relationship, the spouse gets 50%, and the children share the other 50%.

Understanding intestacy helps advise clients on whether a will or trust is essential.

4. Avoiding Probate in Florida

Florida probate can be costly and slow. Clients often prefer to avoid it through:

Revocable living trusts
Beneficiary designations (POD/TOD)
Transfer-on-death securities
Joint tenancy
Lady Bird (enhanced life estate) deeds

Florida is one of the few states to widely use Lady Bird deeds, enabling:

Avoidance of probate
Retention of Medicaid eligibility
Preservation of homestead protections

5. Durable Power of Attorney (DPOA) Requirements

Florida has strict rules:

Must include specific “superpower” provisions to authorize major acts (gifting, changing beneficiaries, trust creation, etc.).
Springing POAs are not recognized in Florida (must become effective immediately).
Out-of-state POAs may not be accepted by financial institutions.

6. Health Care Documents

Florida recognizes:

Health Care Surrogate Designation
Living Will
HIPAA authorization
Florida allows the client to designate a health care surrogate to act immediately, not only upon incapacity (unless otherwise stated).

7. Trust Considerations

Florida is trust-friendly, and trusts are often used to:

Avoid probate
Protect spendthrift beneficiaries
Manage blended-family distributions
Provide tax planning (particularly for non-resident aliens owning FL property)

Florida-specific trust points:

Florida allows directed trusts and trust protectors.
Trust modifications/reformations through non-judicial settlement agreements are easier than in many states.

8. Digital Assets

Florida has adopted RUFADAA, allowing agents/executors to access:

Online accounts
Email
Financial portals
Social media

Documents must explicitly grant these powers.

9. Community Property Considerations

Florida is not a community property state, but:

Couples moving from community property states may bring “community property” with them.
Consider using a Florida Community Property Trust (available since 2021) to preserve tax benefits.

10. Non-Citizens / Non-Residents Owning Florida Property

If a client lives elsewhere but owns Florida real estate:

They may need ancillary probate.
Homestead protections may not apply if they are not Florida residents.
Estate tax planning is crucial for non-citizens due to lower U.S. exemption thresholds.

11. Estate Tax

Florida has no state estate tax.
Federal estate tax applies only above the federal exemption.

✅ Are Joint Revocable Trusts Allowed in Florida?

Yes. Florida law allows joint revocable trusts for married couples (and even unmarried partners, though that structure is less common). Many snowbird couples moving to Florida arrive with joint trusts created in another state, and Florida courts generally honor them.

However, Florida’s homestead rules, elective share, and DPOA requirements make joint trusts more complicated than in many states.

⚖️ Key Considerations Before Using a Joint Revocable Trust in Florida

1. Homestead Property — the Biggest Issue

Florida homestead rules are constitutionally protected and can conflict with joint trusts.

✔ A jointly owned homestead can be placed in a joint revocable trust, but only if:

The trust preserves the spouse/minor children’s constitutional rights
Both spouses sign the deed conveying the property into the trust
The trust language expressly protects homestead rights (right of occupancy, restrictions on devise)

⚠️ Common mistakes that can invalidate homestead protections:

Not carving out the surviving spouse’s right of lifelong occupancy
Purporting to devise homestead in a way Florida law prohibits
Failing to draft the trust with homestead-safe provisions

If drafted incorrectly, the trust can:

Lose creditor protection
Trigger an improper devise
Result in statutory spousal life estate by operation of law

2. Elective Share (30% of the Estate) Applies Even to Joint Trusts

Florida’s 30% elective share includes:

Trust assets
Joint assets
Pay-on-death assets

A joint trust will not avoid the elective share. Couples in second marriages often need special planning (e.g., elective share waivers or QTIP subtrusts).

3. Trust Situs and Administration

Florida is trust-friendly, and a joint trust can specify:

Florida situs
Florida choice of law
A Florida-based trustee or successor trustee

This is important when the trust was originally drafted in another state (e.g., PA/NJ/MD clients moving to Florida).

4. Handling Separate vs Marital Property

Joint trusts work best when spouses have shared goals and mostly joint assets.
Where they are not ideal:

Second marriages
Separate property marriages
Situations involving creditor risk
Pre- or post-nups allocating individual inheritance rights

Florida practice tip:
➡ Many attorneys now favor two separate revocable trusts instead of a combined joint trust because they simplify homestead, marital rights, and elective share issues.

5. Out-of-State Joint Trusts

If a couple moves to Florida with an already-existing joint trust:

The trust is generally valid,
BUT amendments are strongly recommended to fix homestead language and elective share exposure.

A/B Trust Planning in Florida

Classic A/B trusts (also called credit-shelter and marital/QTIP trust planning) were originally designed for estate-tax minimization when the federal exemption was low. Today, with high federal exemptions and no Florida estate tax, the purpose of A/B planning in Florida is different.

Florida clients often still use A/B plans, but for asset protection, remarriage protection, children from prior marriages, and controlled distribution, NOT necessarily tax savings.

1. Does Florida Permit A/B Trust Planning?

✔ Yes.
Florida fully recognizes:

A Trust (Survivor’s Trust) – revocable, holds the surviving spouse’s assets
B Trust (Bypass/Credit Shelter Trust) – irrevocable, holds the deceased spouse’s share

Florida courts and statutes fully support this structure.

2. Why A/B Planning Still Matters in Florida

✔ 1. Blended Families (Most Common Reason in FL)

Florida’s 30% elective share makes blended-family planning tricky.
A well-drafted A/B trust:

Places the deceased spouse’s share into the Bypass Trust (B Trust) for children
Gives the survivor limited access (income, HEMS standard)
Prevents disinheritance of the deceased spouse’s kids

⚠ However, to be elective-share compliant, special drafting is needed (details below).

✔ 2. Creditor Protection

Florida offers strong protections for properly structured bypass trusts, including:

Protection for the surviving spouse’s creditors (if discretionary)
Protection for children upon the survivor’s death

✔ 3. Asset-Management and Spending Controls

A/B trusts allow:

Independent co-trustees
Spendthrift protection
Segregation of pre-marital and marital assets
Preservation of inheritance lines

✔ 4. Tax Planning for High-Net-Worth Clients

Although Florida has no state estate tax, federal considerations still apply:

Preserving the deceased spouse’s exemption
Portability vs. bypass trust funding
Shielding assets from future estate tax changes

For very high-net-worth FL couples, A/B planning is still relevant.

3. Florida-Specific Issues When Drafting A/B Trusts

⚠ 1. The Elective Share Applies to A Trust Assets

The 30% elective share includes:

Bypass trusts
Revocable trusts
Joint accounts
Pay-on-death accounts
And certain marital trusts

To neutralize elective-share risk, the plan must be:

✔ “Elective Share Compliant”

This typically means:

The B Trust gives the surviving spouse HEMS access or income
The trust recognizes the elective share in the apportionment formula
The spouse receives the actuarial equivalent value

Most Florida blended-family A/B trusts require explicit elective-share satisfaction language to prevent litigation.

⚠ 2. Homestead Planning

Homestead rules must be handled with surgical precision.

✔ Homestead can enter a B Trust, but only if:

The spouse has a lifetime right to reside
Minor children won’t invalidate the devise
The drafting preserves constitutional protections

Common formulation:

Survivor receives exclusive, rent-free, tax-free lifetime occupancy
Remainder goes to deceased spouse’s beneficiaries

Incorrect drafting can:

Void the devise
Force statutory life estate
Lose creditor protection

⚠ 3. Out-of-State A/B Trusts Need Florida Tuning

If a client relocates from:

NY
NJ
PA
MD
CA
AZ
etc.

…their A/B provisions often conflict with Florida homestead and elective-share rules and should be amended.

⚠ 4. Florida Does Not Recognize “Springing” POAs

If the A/B structure requires:

Allocation decisions
Trust reformations
Asset transfers into the trust

…the Durable POA must comply with strict Florida statutory language.

4. **When A/B Trusts Are Recommended in Florida**

✔ Blended families / second marriages

✔ High-net-worth couples

✔ Desire for asset and creditor protection

✔ Concern about remarriage of the surviving spouse

✔ Desire to control distributions to children

✔ Clients with significant separate property

5. **When A/B Trusts Are Not Necessary in Florida**

✖ Couples with entirely joint children

✖ No creditor risk

✖ No blended-family issues

✖ Estates under federal threshold with no tax concern

✖ Couples who prefer simplicity (one-pot revocable trust)

In these cases, a simple all-to-spouse then-to-kids plan with portability often suffices.

6. Florida Drafting Checklist for A/B Trusts

🔶 Include:

Homestead article compliant with Fla. Stat. & Constitution
Express elective-share satisfaction provisions
Trustee succession for the B Trust (avoid surviving spouse as sole trustee)
Spendthrift protection
HEMS standard for B Trust distributions
Right of occupancy or support trust for homestead
Florida choice-of-law and situs clause

🔶 Avoid:

Mandatory income distributions (makes trust vulnerable)
Inadequate elective-share compliance
Ambiguous homestead devise language
Out-of-state tax clauses that conflict with Florida law

Why You Might Want an A/B Trust (Simple Explanation)

An A/B Trust is a way for a married couple to make sure that:

1. Your spouse is financially protected if you pass away,

but at the same time…

2. Your children (especially from a prior marriage) are guaranteed to receive their inheritance later.

Think of it like two buckets:

Bucket A (Survivor’s Trust): For the spouse’s own money and anything they inherit.
Bucket B (Family/Bypass Trust): Holds the deceased spouse’s share, protected and preserved for the children.

The surviving spouse can still use the Bucket B funds for reasonable needs (health, living costs), but they cannot give it away, spend it irresponsibly, or leave it to a new spouse. When the survivor eventually passes, whatever is left in Bucket B goes to the children the first spouse intended.

In plain English:

An A/B Trust:

✔ Protects your spouse

They still have access to money and the ability to live comfortably.

✔ Protects your kids

Your share cannot be diverted to a new spouse or step-family.

✔ Protects your legacy

Your portion is locked in and can’t disappear due to remarriage, creditors, or bad financial decisions.

✔ Protects against disputes

The plan is clear and legally enforceable, which prevents family conflict.

A simple example

If you pass away first:

Your half goes into Trust B → protected for your kids.
Your spouse uses the money if needed but can’t redirect it.
When your spouse later passes, the remaining assets guaranteed go to your children.

When clients need this most

Second marriages
Children from prior relationships
Unequal estates (one spouse has more money)
Concern about remarriage
Families wanting certainty and protection

What Is a QTIP Trust? (Simple Explanation)

A QTIP trust is a way to take care of your spouse for the rest of their life while still protecting your children’s inheritance.

Think of it like this:

Your spouse gets all the income from the trust (and can use principal if the trust allows).
They are financially secure and supported.
But they can’t change where the money goes after they die.

When your spouse later passes away, whatever is left goes exactly to the beneficiaries you chose—often your children.

Plain-English Summary

A QTIP trust:

✔ Provides for your spouse during their life

✔ Protects your children or chosen heirs after your spouse is gone

✔ Prevents the money from being redirected (e.g., to a new spouse)

✔ Reduces family conflict and preserves your wishes

Example

You pass away.
Your money goes into a QTIP trust.
Your spouse receives income and support from the trust for life.
When your spouse passes, the trust assets automatically go to your children—not a new spouse or someone else.

If you’d like, I can also give:

A one-sentence version
A visual diagram
A client-facing handout summary

how do you create these trusts – are these stand alone?

Here’s a clear, client-friendly explanation of how A/B and QTIP trusts are created and whether they are stand-alone trusts.

How Are A/B and QTIP Trusts Created?

They are almost never stand-alone documents.

A/B Trusts and QTIP Trusts are not usually drafted as separate, stand-alone trust agreements.
Instead, they are built into one revocable living trust that “splits” into subtrusts after the first spouse passes.

Think of it like a master trust that contains instructions for what happens later.

How It Works in Practice

1. You create one revocable living trust (the “main” or “family” trust).

This is the document you and your spouse sign during your lifetimes.
It is fully changeable (revocable) while both spouses are alive.

2. Inside that trust, you include articles or sections that say:

When the first spouse dies → the trust splits
Part stays revocable (Survivor’s Trust or A Trust)
Part becomes irrevocable (Bypass Trust, Marital Trust, or QTIP Trust)

3. The subtrusts are “triggered” at death.

They do not exist as separate trusts during life.
They become active only when the trust instructs them to.

Are There Times When These ARE Stand-Alone?

Yes, but only in very specific situations:

✔ Stand-alone QTIP Trust

Sometimes used for:

Estate-tax planning for very high-net-worth clients
Non-citizen spouse planning (QDOT/QTIP structures)
Prenuptial/postnuptial agreements requiring a separate fund
Second marriages with complex asset division

✔ Stand-alone Bypass Trust

Very rare, but occasionally used if:

One spouse wants to lock in separate property long before death
Parties are not comfortable commingling assets in one joint trust

✔ Stand-alone ILITs, SLATs, GRATs, etc.

Different category—those are always separate irrevocable trusts, not part of a revocable trust.

For 99% of married couples:

A QTIP trust or Bypass trust is NOT a separate document.

It is simply a section inside the main revocable living trust that activates later.

QTIP vs. A/B Trust Planning (Simple Explanation)

⭐ **Think of both as ways to protect a spouse and protect children — but they work differently.**

1. What Is an A/B Trust? (Simple Version)

An A/B Trust is a structure created inside a joint revocable trust that splits into two trusts when the first spouse dies:

A = Survivor’s Trust

Holds the surviving spouse’s share
Fully revocable and under their control

B = Bypass Trust (or Family Trust)

Holds the deceased spouse’s share
Irrevocable
Protects assets for the deceased spouse’s beneficiaries
Spouse can use it for needs, but with limits
Whatever remains goes to the deceased spouse’s chosen heirs

Best for:

Blended families
Protecting assets for children from prior marriages
Preventing disinheritance
Creditor protection

2. What Is a QTIP Trust? (Simple Version)

A QTIP Trust is a marital trust created at the first spouse’s death that:

Must give the surviving spouse all income for life
May allow principal distributions
The surviving spouse cannot choose the final beneficiaries
Whatever remains goes to the people the first spouse selected