For your clients, the process of preparing for the future—particularly regarding their homes and health in their later years—goes beyond mere legal formalities. Clients seek to safeguard two important pillars of their life: the security of a home and the assurance of compassionate care. 

Assuring Homestead protection and filing a Notice of Preneed Guardian are two important estate planning tools used to do this. 

Let’s take a look at what these documents are, why they’re so important, and how they fit into estate planning in Florida so you can offer the best services possible.

What is Homestead?

Dealing with Florida homestead property after someone has passed away can be complex. This is especially true if the surviving spouse only owns a life estate in the property and the children of the deceased hold the remainder interest. 

Such situations can lead to disagreements over decisions about the property, as parties may have different interests. Conflicts become even more challenging when the surviving spouse and children consider selling the homestead, as federal estate and gift tax laws may create dilemmas.

As a potential solution for this issue, homestead owners can file for a homestead exemption with their county property appraiser following Florida’s Homestead law. 

Filing for homestead exemption is important because the filing:

• Allows a portion of the home’s value to be exempt from certain taxes;
• Protects homesteads from forced sale by creditors except in cases like tax debts or debts for home improvements;
• Negates subjection to alienation or devise if the owner is survived by a spouse or minor child (in most cases).

Unlike other states, Florida Homestead law is part of Florida’s constitution. Therefore, it provides enduring statutory protection, and future laws can’t diminish or override the provided exemptions. 

What is a Notice of Preneed Guardian?

One of your client’s main goals is to ensure that their wishes are honored if they cannot make decisions for themselves. Numerous estate planning vehicles support this, from medical power of attorney (also known as a healthcare surrogate) to healthcare proxies to living wills.

Completing a Notice of Preneed Guardian is an essential step towards avoiding court appointed guardianship, should a guardian not be previously appointed.

A Notice of Preneed Guardian allows individuals to designate someone to serve as their guardian if they become incapacitated. Preneed guardianship can apply to minor children or your client themselves, no matter what age they are. 

This guardian has both personal and financial responsibility for their ward. They are required to:

• Respect the ward’s stated wishes;
• Not limit contact with friends and family members;  
• Allow freedom of movement and action as long as it doesn’t harm the ward;
• Provide for medical, educational, and other personal needs;
• Make appropriate healthcare decisions for the ward.

Estate Planning Challenges of Homestead Exemptions and Notice of Preneed Guardianship

Estate planning—it’s never as simple as it seems. Here are a few challenges that arise when layering homestead exemptions and preneed guardianship into an estate plan.

Challenges of creating homestead exemptions in Florida estate plans

As mentioned before, homestead exemptions provide valuable protections for homeowners in Florida. However, these exemptions also present certain challenges when it comes to estate planning. Some of the challenges include:

• Homestead property may be subject to different rules depending on the marital status of the decedent;
• Who can be named beneficiary of the homestead property may be restricted;
• The amount of homestead property that can be transferred through a will or trust may be limited;
• Heirs may disagree on the distribution of homestead property.

Passing down homestead exemption to non-spouse or non-direct lineal descendants can be challenging. This includes partners, friends, or extended family members who may have been helping to maintain the property.

In all situations, estate planning attorneys should endeavor to create an estate plan that is comprehensive and fully encapsulates the wishes of the grantor. This will provide a strong framework for individual documents like homestead exemptions.

Challenges of Notice of Preneed Guardianship in Florida estate plans

Preneed guardianship offers much-needed peace of mind in an estate plan, but executing it requires care. Be aware that you may need to navigate the following concerns:

• Choosing a suitable guardian can be difficult, especially if the person named is a non-family member;
• There may be disagreements among family members about who should be named as guardian;
• The person named as guardian may lack the means to support the individual ;
• Changes in circumstances or relationships may render the document outdated and require frequent updates.

As with all aspects of estate planning, regularly review this document so that it correctly reflects your client’s wishes. Maintaining good communication with your client and their potential guardian can reduce conflicts and allow for a smooth transition if the document needs to be enacted.

Legal consequences of not filing or filing incorrectly

While filing these documents offers many advantages, there are also personal and legal consequences for not filing or filing incorrectly. For example, repercussions for overlooking or incorrectly filing for a homestead exemption include:

• Vulnerability to creditors
• Loss of tax benefits
• Legal ramifications such as claw back penalties (which can be retroactive), misdemeanor charges for false information, and liens against property.

On the other hand, neglecting to file a Notice of Preneed Guardian can also lead to several challenges, such as:

• Loss of personal autonomy, with decisions about care and affairs left to courts or other individuals
• Potential for family conflicts, leading to emotional and financial strain
• Legal uncertainties such as guardianship imposition, court intervention and delays, and potential for legal contests

Strategies for creating and enacting Homestead Exemptions and Notices of Preneed Guardianship

Whether you incorporate homestead exemptions or preneed guardianship (or both) into a client’s estate plan, a clear strategy can help you tackle the work more effectively.  Consider the following steps:

• Invest in a thorough intake process with clients so you have the fullest understanding possible of their needs, goals, and concerns.
  
• Leverage legal-specific software solutions to reduce the manual effort of creating documents, leaving you more time to focus on client relationships.
  
• Regularly review and update estate planning documents to incorporate changes in circumstances or relationships.
  
• Educate clients about their plan, how it works, and ways to effectively communicate with beneficiaries and potential guardians.
  
• Collaborate with other professionals, such as elder law attorneys or financial advisors, to create a comprehensive estate plan that addresses all aspects of potential incapacity. 

Additionally, estate planning attorneys should have a professional development strategy, so they stay at the forefront of state laws and regulations. Estate planning laws are state-specific, and attorneys may need to balance different jurisdictions if their clients maintain residency or have assets located in multiple states.

Streamline estate planning document management with Estate Genius

When it comes to estate planning, embracing the right tools can make all the difference between struggle and success. Estate Genius offers best-of-breed estate planning software that brings together…

• Innovative technology
• State-specific legal compliance
• User-friendly features, such as our Homestead Filing Document directly prepared for the State and our pre-fillable Notice of Preneed Guardian PDF.

Estate Genius™ can enhance your service offerings, streamline your workflows, and focus on what’s truly important: your clients and your practice.

Schedule a demo today to experience how we can make document management quick, accurate, and effortless for your firm.