What Happens to Your Florida Estate Plan When Your Spouse Dies?

By Mary Saunders, Esq.

Losing a spouse brings difficult personal decisions at a time when legal and financial matters may also require immediate attention. If you and your spouse created an estate plan together, you may assume that the documents you signed years ago will continue to work as intended. Unfortunately, in some circumstances that may not be the case.

The death of a spouse can affect how assets are owned, who has authority to act, how a trust operates, and who will ultimately inherit your property. Some changes may occur automatically under Florida law or the terms of your estate planning documents. Others require action by the surviving spouse.

Reviewing your Florida estate plan after your spouse’s death can help you understand what has changed, whether probate or trust administration may be necessary, and what needs to happen next.

What Happens to Jointly Owned Property When a Spouse Dies in Florida?

One of the first questions is how you and your spouse owned your assets. Certain property owned jointly by spouses may pass automatically to the surviving spouse. For example, property owned as tenants by the entirety generally passes to the surviving spouse upon the death of the other spouse. Property owned as joint tenants with rights of survivorship may operate similarly.

However, not every asset is jointly owned, and not every jointly titled asset is treated the same way. Assets titled solely in the deceased spouse’s name may be subject to probate unless another method of transfer applies. Even jointly titled assets, if they do not have rights of survivorship, may be subject to probate. Assets with valid beneficiary designations, such as certain retirement accounts, life insurance policies and payable-on-death or transfer-on-death accounts, generally pass to the designated beneficiaries outside probate.

Understanding how each asset is titled and whether a beneficiary designation applies is an important early step.

Does a Revocable Trust Become Irrevocable When a Spouse Dies?

It depends on how the trust was drafted. A married couple may have separate revocable trusts, a joint trust, or a more complex estate planning arrangement. When one spouse dies, some or all of a trust may become irrevocable under its terms.

The surviving spouse may continue to serve as trustee or beneficiary, but their ability to amend the trust may change. The trust may also contain provisions requiring assets to be divided into separate shares or trusts.

This is one reason the trust document should be reviewed before assets are distributed or retitled. The surviving spouse and successor trustee need to understand what the document requires following the first spouse’s death.

Does the Surviving Spouse Need to Go Through Probate?

Not necessarily. Whether probate is required depends largely on how the deceased spouse’s assets were owned and whether those assets have another method of transferring at death.

For example, an individually owned bank account without a beneficiary designation may be a probate asset. A jointly owned account with survivorship rights may pass directly to the surviving owner.

Even when much of a couple’s property passes outside probate, probate may still be necessary for other assets or purposes. An estate planning attorney can review the deceased spouse’s assets and determine whether a Florida probate proceeding is required.

What Happens to the Florida Homestead?

Florida homestead property deserves particular attention because the Florida Constitution and statutes impose special rules governing its transfer at death. The result depends on several factors, including how the property was titled, whether the deceased owner was married and whether the deceased owner had minor children.

A Florida homestead cannot always be devised in the same manner as other property. Florida law restricts the devise of homestead when the owner is survived by a spouse or minor child. When homestead is not devised as permitted by Florida law, this can result in a more complicated ownership structure for the surviving spouse and descendants.

Because Florida’s homestead rules are highly fact-specific, a surviving spouse should obtain legal advice before selling, transferring or making other decisions concerning the home.

Should You Update Your Will After Your Spouse Dies?

Usually, this is an appropriate time to review it. Your existing will may name your deceased spouse as personal representative, beneficiary or both. A well-drafted will typically identifies successors, but those choices may have been made years earlier.

Consider whether the people you previously selected are still the people you want handling your affairs. You should also review how your property will pass now that your spouse is no longer living. The same review should go beyond your will. This is also a good time to evaluate the overall structure of the surviving spouse’s estate plan to determine whether additional planning instruments, such as a revocable trust, are recommended.

What Other Estate Planning Documents Should You Review?

A complete review should generally include your:

• Last Will and Testament;
• Revocable Living Trust, if applicable;
• Durable Power of Attorney;
• Designation of Health Care Surrogate;
• Living Will;
• Beneficiary designations; and
• Ownership and titling of significant assets.

The death of your spouse may change who you want making financial or health care decisions if you become unable to act for yourself.

Beneficiary designations also deserve particular attention. If your spouse was the primary beneficiary of a retirement account, life insurance policy or other account, determine whether a contingent beneficiary is named and whether that designation still reflects your wishes.

Do Assets Need to Be Retitled?

They may. After a spouse dies, assets may need to be transferred from joint ownership into the surviving spouse’s individual name or into an appropriate trust. Trust administration may also require assets to be allocated among different trusts or shares.

Retitling assets without first reviewing the estate plan can create unintended consequences. Before making changes, determine how the asset passed at death and how it should be held going forward.

What About Taxes After a Spouse Dies?

Tax considerations can also arise following a spouse’s death. Depending on the type and value of the assets involved, there may be income tax, basis and federal estate tax considerations. Florida does not currently impose a separate estate tax, but federal tax rules may still affect an estate or surviving spouse.

For some married couples, it may also be important to consider whether the deceased spouse’s estate should file a federal estate tax return to elect “portability,” which can allow a surviving spouse to use a deceased spouse’s unused federal estate and gift tax exemption. This may be relevant even when no federal estate tax is due at the first spouse’s death.

The surviving spouse should review potential tax issues with their attorney, accountant, or other tax professional.

What Should You Do After Your Spouse Dies in Florida?

After a spouse dies, one of the first legal steps is to determine how the deceased spouse’s assets were owned and whether probate or trust administration is necessary. The surviving spouse should also review the couple’s estate planning documents, beneficiary designations, and ownership of significant assets before transferring or retitling property.

Once the immediate administration issues have been addressed, the surviving spouse should review their own estate plan to determine whether changes are needed.

When Should a Surviving Spouse Review the Estate Plan?

There is no need to rewrite every document immediately following a spouse’s death. However, certain estate and trust administration responsibilities may have deadlines, and some decisions should be made before assets are distributed or retitled.

Once the pressing legal requirements have been addressed, the surviving spouse should review their own estate plan. The plan you created as a married couple reflected a particular stage of your life. After your spouse dies, your family structure, assets, and priorities may look different. Your estate plan should reflect those changes.

Bottom Line

For individuals and families in Southwest Florida, particularly those who have moved to Florida from another state or whose estate plans have not been reviewed recently, the death of a spouse is an important time to determine whether existing documents still accomplish their intended purpose.

A Florida estate planning and administration attorney can help identify what may need to be done to administer the deceased spouse’s estate or trust and what should be updated for the surviving spouse. I may be reached at mary.saunders@henlaw.com to schedule a consultation.