Should new Florida residents update their out-of-state estate planning documents?| Estate, Trust & Elder Law

You have estate planning documents prepared in the state of your former residence but are now a Florida resident.

Must you get the documents converted to Florida documents? No.

Should you have a qualified Florida lawyer review the out of state documents? Absolutely.

First off with respect to your will, Florida statutes provide that a will that is valid under the laws of the place where it was executed will be honored in Florida.

However, there could be principles of Florida law that cause problems under the out-of-state will.

For example, let’s say you now have a homestead in Florida and your will devises your residence at the time of your death to a trust for the benefit of your spouse and children.

A Florida homestead is not devisable to anyone other than the spouse if you are survived by one. The failure to comply with that provision would result in a life estate to the spouse with vested remainder to the homesteader’ s children, which does not get us the result that you wanted because we no longer have the property controlled by the trustee. Therefore, we have potential issues between a spouse and children who have varying interests in the property. This might not be that big of a problem, but if it’s a second marriage situation, it could be that the spouse and children do not get along. Actually, that could be true in the first marriage situation as well!

Another example of a potential problem. Let’s say your out-of-state will directs the sale of your Homestead and distribution of proceeds in equal shares to your children. In addition to that being a problem under the preceding paragraph, let’s further say that you die with potential creditor claims (this could happen whether or not you owe any money to anybody because you could die in an automobile accident that results in a lawsuit against your estate). Directing the sale of the homestead in Florida causes the loss of the Homestead exemption for creditor protection purposes. That could be a big loss for your family.

Another potential problem is that your out-of-state will might appoint a nonrelative friend who is a resident of the state of execution of the will as personal representative. Under current Florida law that person is not eligible to serve as personal representative in Florida and procedures would have to be followed to appoint a Florida personal representative. A nonrelative friend may only serve if they are a Florida resident, blood relatives may live out of state.

In addition to these few samples of potential problems, there is the general problem that your Will should be reviewed periodically anyway and if it’s been a few years since you’ve looked at it, it could be very beneficial to review it with a qualified Florida lawyer.

The out-of-state power of attorney document should also be considered and reviewed with a Florida attorney. Florida’s power of attorney statute was very substantially changed effective October 1, 2011.

That statute does not void an out-of-state power of attorney, or a pre-2011 power of attorney, but it does provide that any power of attorney used in Florida after that date will be subject to the new statute.

I would direct your attention to my prior article on this subject: “The Most Important Estate Planning Document for Seniors” previously published in the Treasure Coast Newspapers and downloadable on our website under the In-The-News tab.

In a nutshell, one of the provisions of the new statute is that blanket authorizations are no longer meaningful and, therefore, that a power of attorney conveys no power unless that power is expressly set forth in the document.

Sometimes we see a power of attorney document that might say something to the effect of “I authorize my agent to perform any function which I could perform myself” – that is a blanket authorization and is meaningless under the 2011 Florida statute.

Therefore, if you want your power of attorney document to be meaningful, it is going to have to specifically authorize the actions that might be necessary to be taken after your incapacity.

The statute further goes on to provide that “special powers” are exercisable only if the principal signed or initialed next to each specific enumeration of the power.

Special powers are generally powers that can have the effect of changing the estate plan; for example, power to create an inter vivos trust; to amend, modify, revoke, or terminate a trust; make a gift in excess of the annual exclusion amount ($15,000 this year), create or change rights of survivorship; create or change beneficiary designations; waive the principal’s rights to inherit; etc.

If your out-of-state power of attorney does not have the separately initialed paragraphs, your agent may not be able to exercise such powers and, from a long-term care planning standpoint, providing for your care if you are incapacitated could be substantially compromised and the expenses of dealing with this could be increased unreasonably.

Many times, if there is an out-of-state power of attorney and your agent attempts to use it in Florida, at a minimum there may be a requirement to get an opinion of counsel from the state the document was executed in to the effect that the attempted exercise is valid under the laws of that jurisdiction.

That process alone would probably exceed the cost of getting the documents revised in Florida.

Michael D. Fowler is with The Estate, Trust & Elder Law Firm, P.L., 2940 S. 25th St., Fort Pierce, with branch locations in Stuart, Port St. Lucie and Vero Beach. He is board certified by the Florida Bar in Wills, Trusts & Estate and Elder Law and is one of only nine attorneys in the entire state that share that distinction. He is also a VA accredited attorney.

For more information on estate and long-term care planning, please call 772-828-2588 for a list of upcoming seminar dates in a town near you and other available educational resources, including a DVD of a recent seminar.

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