Asset Transfers In Florida Estate Planning

When making their estate plan, a person’s primary concern is generally determining who will get their assets upon their passing. Asset transfers are most often made via someone’s will or other estate planning instruments, to take effect upon that person’s passing, However, sometimes a person will preemptively transfer the asset to the intended beneficiary during their lifetime. In order for that transfer to be considered appropriate, though, it must be made according to the requirements of Florida law.

Many Common Types Of Transfers

By far the most common type of asset transfer is done using a standard Last Will & Testament, with heirs and other beneficiaries clearly specified. A revocable living trust is another popular option, which has the added benefit of allowing the assets placed in the trust to skip Florida probate. Other transfers can be made at any point, but they are generally classified as gifts rather than as assets being transferred, as long as the giver does not receive full value in return. For example, if a mother gives her son the deed to a piece of property without expecting or receiving repayment, it will qualify as a gift.

Sometimes, people may choose to make preemptive transfers of certain assets, where they simply give the item or items to the person they have deemed should have possession. This is legal if the transfer meets the definition of a gift, and also if no intent to defraud can be detected. The most complex estates will likely benefit from a combination of methods, but each case is different. Transfers during the estate planner’s lifetime are perhaps the most risky, because if not done properly, they may actually violate the law without knowing they are doing so.

Avoid Potential Fraud

Sometimes, a person may transfer an asset to another person with the intent of making it a gift, but this must be done in such a way where it does not lead to accusations of fraud. If a person transfers certain assets in a bid to move them beyond the reach of a creditor (or the probate court), the transfer may be deemed fraudulent and essentially cancelled. Florida’s Uniform Fraudulent Transfers Act (UFTA) states that a fraudulent asset transfer is one made while “under obligation” that is designed to “hinder, delay, or defraud” one’s creditor. However, a transfer is also fraudulent if the one transferring the asset does not receive a reasonably equivalent value in exchange and they engage in spending beyond their means after the transfer (which in turn, leaves nothing for the creditor).

What this all means is that if you transfer an asset to a family member because you want them to have it, that is acceptable; if you transfer an asset to a family member because you want there to be less in your estate with which to pay your creditors, that is fraudulent, and can open you up to potential liability. Florida law recognizes several different remedies for fraudulent transfer, including invalidating the move, injunctive relief barring any further transfers, money damages against the transferor, or a combination of all three.

Call A Naples Estate Planning Attorney

If you have questions, concerns or just want to set up a complimentary consultation to discuss your personal legal issues in a confidential setting, contact James R. Nici, the Managing Partner of Nici Law Firm, a Naples estate planning attorney with almost 30 years of legal experience.  This may be the first step toward ensuring all is how you want it to be going forward. Contact our offices today via our website, or on the telephone at 239-449-6150, to schedule your complimentary consultation.

Resources:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0726/Sections/0726.105.html

irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes