Giving You The Truth About Estate Planning, Probate & Real Estate
Straight Talk From Experienced Attorneys at Minerley Fein, P.A.
Read About Common Myths or Horror Stories
To Read More About Our Practice Areas, please click on the links below:
- Wills, Trusts & Estate Planning Probate & Trust Administration
- Probate Litigation
- Real Estate
- Florida Civil-Law Notary
Common Myths About Wills, Probate & Real Estate
Myth: Probate is Always Very Expensive.
Truth: Probate Fees are Negotiable.
Florida law authorizes an attorney to charge a 3% fee on a Probate Estate (up to the first million dollars, and then a declining percentage after that). This law is not mandatory, it is just a statement of what is presumed to be reasonable. The actual fee you pay is subject to your agreement with your lawyer, and in some cases court approval. A typical, routine, uncomplicated probate can be done for $5,000 or less. So while the statutory fee for a $1 Million Dollar Probate Estate is $30,000, in reality the fee should be much, much less. At Minerley Fein, P.A., we never charge a family a percentage fee, because we believe it is unfair to our clients. We will only charge a fee based on the amount of time we actually devote to the case, resulting in a much smaller, and fairer, fee for the client.
Myth: I Can Make My Own Will and Don't Need an Attorney.
Truth: An Attorney's Value is in Advising and Planning, not Generating Paper.
Legalzoom, Will Maker and lots of other sources can help you generate a Will document yourself at minimal cost. But the content of your Will is important. An attorney's value is not in just preparing some forms. It is in listening to you, analyzing your assets and wishes, pointing out potential problems, and then advising you on ways to structure your affairs so as to protect your loved ones. The paper is the easy part; it is the planning and guidance of an attorney that is the value-added by having a professional involved. At Minerley Fein, P.A., you will always work directly with an experienced attorney in making your estate plan.
Myth: I Don't Need an Attorney to Buy or Sell a House.
Truth: You Can Have an Attorney Represent You for Little or No Cost.
Florida uses a system of title insurance to ensure that real estate is sold free and clear with marketable (clean) title. The rates for title insurance are set by state law, and are based solely on the sale price of the property. Attorneys can do everything that a title company does, while also protecting your legal interests. The party that pays for the title insurance (typically the Buyer, except in Palm Beach County or for New Construction), gets to choose the title agent. So why settle for a title company, when you can have an attorney for the same price? At Minerley Fein, P.A., we will not charge you an attorney's fee for a routine, residential closing, if we are providing the title insurance.
Myth: My Inheritance is Subject To Taxes.
Truth: Most Estates Pay No Taxes Whatsoever.
There are two types of Federal Tax to consider: Income Tax and Estate Tax.
Income Tax: An inheritance is a gift. It is not income, and not subject to income tax. Just remember that distributions from an IRA are taxed when the money is taken out of the account, regardless of who takes it out and when, but there is no extra tax because the IRA is inherited from a deceased owner.
Estate Tax: The Federal Estate Tax is a separate tax, apart from the Federal Income Tax. The Federal Estate Tax is a one-time tax imposed on the value of your assets as of your death. However, in 2014, the first $5,340,000 of an Estate passes tax free ($5,430,000 in 2015). So for over 99.99% of the population, whose assets are under this amount, there is simply no Estate Tax. In fact, in 2012, less than 4,000 estates nationwide paid any tax at all (less than 0.01% of the population). See http://www.irs.gov/pub/irs-soi/12estateonesheet.pdf
Florida does not have state income tax or state estate tax. At Minerley Fein, P.A., we can quickly analyze your tax situation, and let you know where you stand.
Myth: I Can Transfer Property Myself Using a Quick Deed.
Truth: It is Never a Good Idea to Prepare Your Own Conveyance Documents.
The proper terminology is a "Quit Claim" Deed, which is often erroneously called a "Quick" Deed. Every deed needs a correct legal description of the property, and correct names of the parties. Deeds must be notarized and witnessed. Every conveyance of property should be carefully evaluated for income tax consequences, documentary stamp tax liabilities, and any number of legal issues concerning title, liens, insurance and other consequences. A small error can lead to large expenses later to correct. An ounce of prevention is worth a pound of cure. Do it right the first time with Minerley Fein, P.A.
Estate Planning Horror Stories: Real-Life Examples of Simple Scenarios Gone Wrong
- A Husband and Wife in a second marriage each have adult children from their first marriage. The couple owns all of their accounts and home "jointly with rights of survivorship." The Husband dies, followed by the Wife a month later. Because of the joint ownership, the Wife's kids get everything; the Husband's kids get nothing.
- A divorced Father makes his minor child the beneficiary of his life insurance. When he dies, a court-supervised guardianship proceeding is required to manage the funds until the child turns 18, costing thousands of dollars in legal fees.
- A man with a substance-abuse problem inherits $100,000 from his mother. In 6 months, he blows it on drugs, and is homeless.
- Parents give their Son a new car for his 18th birthday. The car is titled jointly in the names of the Parents and the Son. The Son causes an accident that kills someone. The Parents get sued for wrongful death, and their assets are exposed to pay the damages.
- Mom lives in a condo in Century Village. She just has a Will, but no Revocable Trust. When she dies, probate is necessary in order to sell the condo. The condo sells for $20,000, but the probate fees are $3,000.
- A Mother and Father with minor children each purchase a $1 million dollar life insurance policy to protect their kids. The Mother is diagnosed with breast cancer at 35, and dies. A year later, the Father marries a woman he met online. The new wife spends the Mother's life insurance money.
- Second Husband and Second Wife retire to Florida and buy a home. Only the Second Husband, but not the Second Wife, is on the deed. The Second Husband dies 20 years later without a will, because he thinks "my wife automatically gets everything." Because of Florida's Homestead Law, Second Wife does not inherit the home outright, and Second Husband's adult children from his first marriage now own part of Second Wife's home.
- A retired engineer writes his own Will, copying legalease from his parents' Wills from 50 years ago. When he dies, his Wife owes hundreds of thousands of dollars of Federal Estate Tax that could have been avoided entirely with proper Trust planning.
- A Husband and First Wife divorce in the 1980s. The Husband remarries, and lives happily with his Second Wife for 25 years, until he dies at age 80. The Husband had a $100,000 life insurance policy from his employer. Because the Husband never updated his beneficiary designation after the divorce, the First Wife gets the life insurance money.
- A Widow deeds her condo to her Daughter in order to avoid probate. Two years later, the Daughter files bankruptcy, and the widow loses the condo to the Daughter's bankruptcy creditors.