Inherited accounts

5 Things You Need to Know About Inheriting an Account in Florida

1. Understanding Probate and Non-Probate Accounts: In Florida, it's crucial to distinguish between probate and non-probate accounts. Probate accounts are those included in the decedent's estate and subject to the probate process. Non-probate accounts, like those with designated beneficiaries (e.g., retirement accounts, life insurance), bypass the probate process and are directly transferred to the named beneficiaries. Knowing which category an inherited account falls into will guide you on the necessary legal procedures to follow.
2. Tax Implications: Inheriting an account in Florida can have tax implications. While Florida does not impose a state inheritance tax, federal taxes may still apply, especially for large estates. For example, inherited IRAs and 401(k)s might incur income taxes when distributions are taken. It's advisable to consult with a tax professional to understand any tax liabilities associated with the inherited account.
3. Joint Accounts and Right of Survivorship: If the inherited account is a joint account, it's essential to understand the concept of the right of survivorship. In many cases, joint accounts in Florida are presumed to have a right of survivorship, meaning the surviving account holder automatically owns the entire account after the co-owner's death. This can bypass the probate process entirely.
4. Claiming the Inherited Account: For probate accounts, you'll need to go through the probate process to claim your inheritance. This involves the court validating the will and authorizing the distribution of assets. For non-probate accounts, you may need to provide the financial institution with appropriate documentation, such as a death certificate and identification, to transfer the account to your name.
5. Seek Legal Assistance: Navigating the intricacies of inheriting an account in Florida can be complex. It's often beneficial to seek legal assistance, especially in cases involving contested wills, unclear beneficiary designations, or substantial estate value. A probate attorney can provide guidance on Florida’s specific laws and procedures, ensuring you fulfill all legal requirements and protect your inherited assets.

The case of Larkins v. Mendez involves a dispute over a bank account following the death of Grover Larkins, Sr. ("Decedent"), where the Florida District Court of Appeal was tasked with determining the nature of the account held jointly by the Decedent and his son, Grover L. Larkins, Jr. ("Larkins, Jr."), and addressing the issue of civil contempt against Larkins, Jr. for not returning the funds withdrawn from the account after the Decedent's death.

Summary of the Case:

1. Convenience Account Determination: The Court affirmed the probate court's decision that the contested bank account was a "convenience account," meaning it was intended for the benefit of the Decedent, without a right of survivorship for Larkins, Jr. Despite the bank signature card indicating a "multiple-party account with right of survivorship," evidence presented at trial, including testimonies and bank records, supported the finding that the Decedent intended the account to be for convenience purposes, thereby making its proceeds an asset of the estate to be distributed among all heirs.
2. Factors Considered for Convenience Account: The Court considered several factors, including: (a) The testimony of the Decedent's son and neighbor about the Decedent's intentions for the account to be split among his three sons. (b) Bank records showing withdrawals made by Larkins, Jr. after the Decedent's death. (c) The designation of the account on the signature card and the absence of a "convenience account" selection, which was not deemed conclusive given the statute allowing for clear and convincing proof of a contrary intent.
3. Civil Contempt Ruling Reversal: The appellate court reversed the civil contempt order against Larkins, Jr. due to procedural issues. The probate court had improperly delegated the preparation of the contempt order to the personal representative's counsel without exercising independent judicial thought, violating the requirement for judicial orders to be the product of the judge's independent judgment.
4. Implications: This case highlights the importance of clear documentation and communication of intentions regarding financial accounts with multiple parties. It also emphasizes that a signature card's designation can be rebutted with clear and convincing evidence of a different intent, and judicial orders must reflect the court's independent judgment.

The appellate court's decisions in Larkins v. Mendez serve as a critical reminder for individuals to precisely document their intentions for joint accounts and for the judiciary to maintain the integrity of its rulings through independent thought and consideration.