Read the financial
statements and information sent to you by your mutual fund company
to understand the nature of your mutual fund investment. If, for example,
your mutual fund invests in U.S. stocks, read the names of the companies
your mutual fund owns. Do you want to own a part of the companies
Never assume that
all mutual funds are the same. Mutual funds differ greatly.
your mutual fund is making investments that are consistent with your
risk preference. For example, U.S. Treasury bills are less risky than
Find out how much
your mutual fund charges each year as investment fees. Mutual funds
sometimes charge as much as two percent a year of the principal amount
of your investment! Some mutual fund companies charge less than one-third
percent (.33%) per year of the account value as an investment fee.
fees can definitely hurt the return on a mutual fund over a long period
of time. Look at the charts of fees in your mutual funds prospectus.
Ask your investment
adviser whether or not he receives a commission or "load"
for selling or buying mutual fund shares. Often, mutual funds will
pay a five percent commission to a broker who steers customers to
that fund. Is it really in your best interest to buy a mutual fund
in order to get a five percent commission for a salesman?
If you don't understand
what you own, ask questions before it's too late.
1. Make sure that
your bank account and mutual funds and brokerage accounts are titled
the way you wish for them to be titled. If you intend for money to
go through your Last Will & Testament, never put another person's
name on the account with you. Never assume a joint account holder
will give money to your heirs after your death.
2. If you are
married with children, do not title your house in your name only.
Under the Florida Constitution, if you die with your house titled
in your name and you have a spouse or minor children, then your house
passes in a special way. Your wife receives a "life estate"
and the children receive a "remainder" interest.
Under this scenario,
the spouse cannot sell the house because she only has a "life
estate" in the house and not full ownership. To avoid this, title
the home into joint names. This rule may differ for spouses who are
in second marriages or in situations where a person wants their spouse
to have a life estate with a remainder interest to their children.
3. Although the
Florida legislature thought they were doing a favor to gifting personal
property, the actual impact has been to totally confuse and complicate
the probate of most people's estates. The problem is that items listed
on a separate writing must be distributed to the people named in the
separate writing. If the item has a small value or if the person is
difficult to locate or will not cooperate with the estate process
, it drives up costs of the estate tremendously. Therefore, be very
cautious about listing people as recipients of items in separate writing
clauses attached to Wills.
4. Make a list
of what you own. Many personal representatives spend years trying
to locate assets. Make sure that you prepare a list of what you own
and leave it near your Will.
5. Get rid of
out-of-state property and small interests in items like trusts, partnerships
and corporations. If you have a small interest in a piece of real
estate in another State or country, get rid of it. You are only creating
huge problems for the personal representative in valuing and gathering
the assets for distribution to your loved ones after your death. For
example, real property in other states is subject to "ancillary
probate" in the other state. Such a probate is expensive. If
you truly love your heirs, you will make your estate simple and try
to sell off or give away interests in far flung properties or in entities
that have dubious value such as closely held corporations. Interests
in trusts are also a nightmare for personal representatives to deal
with. Remember the saying "KISS" - Keep it simple stupid.
6. Write a Last
Will and Testament. Fisher's Law Office has encountered numerous estate
situations in which individuals with sophisticated financial backgrounds
failed to write a Will.
true that Florida Statutes Chapter 732 provides a way of distributing
property for those who die "intestate" - without a Will,
most people would be horrified to learn how the Florida legislature
has decided to distribute their property. For example, if you die
with a total of $40,000.00, your surviving spouse will receive the
first $20,000.00 and the balance will be split equally between your
spouse and your child.
If your child
is under age eighteen, he cannot inherit more than $5,000.00 without
having a guardianship opened up for him.
In our example,
it would be much simpler for the decedent to have willed everything
to his spouse and thereby eliminate the need to create a guardianship
to give his child $10,000.00. There are numerous other examples of
why writing a Will can make your estate simpler and more efficient
to probate and will carry out your actual intent.
7. If you have
investments, always keep them in a brokerage or "street account".
Fisher's Law Office has encountered situations in which a personal
representative has trouble locating stock certificates after a decedent's
death. It is also harder to sell individual stock certificates than
shares in a brokerage "street account".
hold stock in "street accounts" with your stockbroker. This
will make it much easier for your heirs to make distribution to your
loved ones upon your death.
8. Consider giving
away property before you die. Because of the time and effort involved
in distributing assets to loved ones, it often takes several months
after your death for your loved ones to receive the money and property
you intended for them to have. Wouldn't it be simpler to see the joy
in their faces when you give them property during your life? Unless
you are ill or need the money for a stay in a nursing home or some
other purpose, you may consider a careful plan of gifting to your
loved ones to legally diminish the size of your estate. It is also
possible to give away tangible personal property to loved ones prior
9. If any that
has increased in value. This property is usually best left in your
estate. See a tax professional before giving away appreciated property
of any kind.
If you are entering
a nursing home within 3 to 5 years, you should never convey your home.
The medicaid "look back" rules punish people for making
gifts and then entering a nursing home. See a professional for details.
If you give away
more than $10,000.00, you need to file a U.S. federal gift tax return-Form
10. Think carefully
about who you want to act as your personal representative. Is the
person responsible? Can they maintain a bank account? Do they return
telephone calls? If you cannot immediately answer these questions
with a "yes" answer, then don't choose the person as personal
representative. On the other hand, if you have no one else in the
world to use as a personal representative, don't hesitate to use close
relatives over strangers especially if the close relative is the sole
or main heir to the estate. Most personal representatives will do
a better job if they are named as an heir to the estate.
Be cautious about naming out of State personal representatives - see
us for details.
11. Consider requiring
your personal representative to post a fidelity bond on their performance.
Most standard Wills waive the requirement of a personal representative
to post a bond. If you have any doubts at all about the honesty of
the personal representative you have chosen, you should not choose
them. As an additional insurance policy, however, you may want to
consider requiring the personal representative to post a bond. This
will give greater assurance that your loved ones will receive the
money you have given them in your Last Will and Testament.
12. If you have
a new child, write a new Will. Under a quirk in the Florida Statutes
dealing with "after born heirs", any child born after your
will is written is considered an "intestate heir". Since
Florida's intestate law provides for substantial amounts to be given
to intestate heir children, you may want to rewrite your Will after
having a child. Otherwise, some children may inherit more than others.
13. If you have
no relatives, you definitely need a Will because otherwise, your property
will go to the State under Florida's "escheat" statute.
14. Where is your
Will? If it's in a safety deposit box, does your personal representative
have a key and permission with the bank to access the box?
15. If at all
possible, die without any debts. It will make probating your estate
more simple. On the other hand, if you feel your life slipping away
and you have no money or items of value, run up your debts and let
someone else (the creditors) worry about it!
4. Florida Statute
61.30(17) states that in a paternity case or a divorce case, the court
has the discretion to award retroactive child support for as long
as the parents have lived apart up to two years.
5. Florida Statute
61.075 is known as Florida's "equitable distribution" statute.
The statute states that all property acquired by either party during
the course of the marriage is subject to equitable distribution. These
marital assets should be equally distributed unless there is justification
for an unequal distribution based on numerous factors listed in the
statute. These include length of marriage, need for children to have
a place to live, whether a closely held business should be left with
the spouse who owns that business and, lastly, whether a spouse has
intentionally dissipated or wasted marital assets within two years
of filing the petition for divorce.
6. Florida Statute
61.076 requires that all vested pension rights and retirement funds
acquired during a marriage should be equitably distributed. Spouses
are entitled, as a general rule, to a portion of the other spouse's
7. Florida Statute
61.08 allows the court to order alimony depending on a list of factors
of living established during the marriage.
of the marriage.
The age and
physical and mental condition of parties.
resources of earibution of each party to the marriage.
IF YOU HAVE A
QUESTION ABOUT DIVORCE OR PATERNITY, CALL FISHER'S LAW OFFICE.