FAQs
What assets are exempt from creditors in bankruptcy?
For the purposes of bankruptcy, an exemption means that certain items (real property, personal property, certain monetary accounts, or income) are not subject to being taken by the creditors named in your bankruptcy petition). In the state of Florida, your homestead is exempt – your homestead, for bankruptcy purposes, is the residence in which you principally reside and intend to stay indefinitely. Also exempt is your personal property (clothing, furniture, jewelry, etc.) up to $1,000.00 in value (this number is not necessarily reflective of what you paid for it, but what its current, “garage sale” value is). As of 2024, Florida bankruptcy debtors are allowed up to $5,000.00 in equity in one motor vehicle. Social security income, pensions, IRAs and 401k funds are also exempt. Also, in the event you do not claim the homestead exemption, you may be entitled to a blanket exemption of any additional property in the amount of $4,000.00. This amount is in addition to the $5,000.00 of equity in one vehicle and the $1,000.00 personal property exemption.
What is the difference between a will and a living will?
While similar in name, these are two very distinct legal instruments, and their legal consequences are very different. A will is a person’s written direction as to what happens to their estate when he/she dies, i.e., who shall inherit what property he/she owned at the time of his/her death and who shall administer their estate (personal representative). A living will, on the contrary, is an instrument that directs medical professionals to either resuscitate or not resuscitate the person who executed the living will in the event that medical professionals determine that there is no reasonable hope of medical recovery and/or has reached an end-stage position with respect to their health.
What can override a will?
A person can name someone as a beneficiary on a bank account and that would take precedence over a will. They could also put someone else’s name on an account that would take precedence over a will. This concept applies not only to bank accounts but also real and titled personal property, like a car. Property can also be transferred to a trust. Only property that is owned by the decedent solely in their individual capacity is subject to a will’s direction. How the property is titled can have a significant impact on will administration. Furthermore, wills can be amended or revoked at any time by the person who made the will so long as that person is of sound mental capacity.
Is a trust better than a will?
It all depends upon the circumstances involving the beneficiaries. If the beneficiary is not responsible with money, for example, then a trust could be very helpful for that person because it can prevent the person from receiving the money at one time by providing for smaller payments over time, or a lump sum upon reaching a certain age. A trust can be a very versatile instruments and provides for more control and direction over one’s assets after death, and the levels of complexity of these types of instruments vary greatly. A will is usually a better fit for someone who has a smaller estate and wishes for his/her beneficiaries to immediately inherit the estate and either sell, dispose of, or retain the estate’s assets as they see fit. Another benefit to a trust, depending on how it is set up and what property is conveyed to the trust, it can help avoid probate (which is the process of admitting the will into an estate and formally administering the estate through the court system), which sometimes can be an expensive and exhaustive process. While a trust is usually more expensive to have drafted, it can save the estate a great deal of legal expenses and court costs once the settlor(s) of the trust pass. A competent attorney can help guide you through and weigh your options when it comes to these choices.