The forty-nine dollar will you bought online last summer is probably going to cost your family thousands of dollars they did not need to spend. Sometimes tens of thousands. That is the part the legal forms websites do not put in their marketing materials.
I have probated a lot of these. After forty years of practice I can usually tell when a will was drafted online before I read past the first page. The witness signatures are in the wrong place, the self-proving affidavit was done backwards, and the boilerplate language has been clearly lifted from a template that was written for a state with completely different inheritance rules than Florida has. Sometimes the same will has all three problems at once.
This article is about the tax and cost pieces of that mess. There are plenty of ways a DIY Florida will can fail, but the financial damage is the most quantifiable, and most of it is avoidable if you understand the traps before you sign anything. There are four I see come up over and over.
Florida Does Not Have An Estate Tax
Before we get into what the traps actually are, here is the one piece of good news. Florida does not have a state estate tax, an inheritance tax, or a gift tax. There used to be a Florida estate tax that piggybacked on the federal credit, but the legislature let it expire in 2005 and nothing replaced it. When somebody dies in Volusia or Flagler County, no Florida state tax comes due at death.
The federal estate tax does still exist, but the exemption is in the multi-million dollar range, and unless you and your spouse together hold north of twenty million dollars in assets, federal estate tax is probably not something you have to think hard about. So when I talk about tax traps in a DIY Florida will, I am not talking about estate tax. I am talking about federal income tax, capital gains tax, and the assorted probate-related costs that DIY documents tend to create by accident.
The Most Expensive Mistake Is Losing The Step-Up
This is the trap I see cost families the most money, and almost nobody who uses a DIY will is aware of it before it happens.
When you die and an asset passes to an heir, the asset gets what is called a stepped-up basis. For capital gains tax purposes, your heir is treated as if they bought the asset on the day you died, at whatever it was worth on that day. So if you bought a house in Ormond Beach in 1992 for ninety-five thousand dollars, and it is worth four hundred and sixty thousand at your death, your daughter who inherits it does not owe capital gains tax on the three hundred and sixty-five thousand of appreciation that occurred during your lifetime. She gets the house at a new basis of four hundred and sixty thousand. Her capital gains exposure is limited to whatever the property appreciates further after she takes title.
The step-up is one of the most valuable rules in the federal tax code, and a DIY will that tries to be clever about transferring assets during your lifetime, or that fails to coordinate with how property is currently titled, can blow it entirely. I have seen DIY plans where parents gift the family home to adult children before death because somebody told them it would save on probate fees. The probate fees they saved were a few thousand dollars. The capital gains tax their kids paid on the lost step-up when they sold the house two years later was almost ninety thousand. That was an avoidable tax bill, and a real estate planner would have walked them through the math before they made the gift. A DIY form did not raise the question because it cannot raise any question.
Your Beneficiary Forms Are A Will Of Their Own
People do not understand this and it costs them constantly.
Your will controls the assets that pass through your probate estate. That is real estate titled solely in your name, vehicles, bank accounts without payable-on-death designations, household property, and similar items. But a significant share of what most middle-class Floridians own does not pass through probate at all. It passes by beneficiary designation, which is a contract between you and the financial institution that holds the asset.
Your 401(k) goes to whoever you named on the beneficiary form, regardless of what your will says. Same with your IRA, your life insurance, and any bank account with a payable-on-death or transfer-on-death designation. If you and your spouse took title to the house as joint tenants with right of survivorship, the house also passes to your spouse automatically without ever touching the will.
This means a DIY will that says everything to my children equally can be quietly contradicted by a beneficiary designation form somebody filled out in 1998 and forgot about. I have probated estates where the will leaves a hundred percent to the surviving family, but the deceased’s three-hundred-thousand-dollar 401(k) ended up with an ex-spouse from a marriage that ended in 2003 because nobody updated the beneficiary form after the divorce. The will was clear about what the family was supposed to get. The 401(k) custodian did not care what the will said.
There is also a newer tax piece that DIY wills almost never address. The federal SECURE Act in 2019 changed the rules for non-spouse beneficiaries of inherited IRAs. The old rule let beneficiaries stretch withdrawals over their own lifetimes. Now most non-spouse beneficiaries have to drain the inherited IRA within ten years, which can push them into a meaningfully higher tax bracket than they would otherwise be in. A coordinated estate plan thinks about whether to name beneficiaries individually or through a trust, and how to spread the tax hit. A DIY plan does not think about it.
Florida Homestead Will Beat Your Will
Florida homestead law is its own constitutional creature. The protections are powerful and the restrictions are equally powerful, and a DIY will that tries to ignore them will lose to the Florida Constitution every single time.
Here is the short version. If you have a surviving spouse and minor children, you cannot freely dispose of your homestead property in your will. The homestead has to pass either to your spouse outright, or to your spouse for life with the remainder going to your descendants. That means you cannot leave it to a charity, or to one child while cutting another out, and any trust arrangement involving the property has to provide the surviving spouse at least a full life estate. The constitution overrides any DIY will provision that conflicts with these rules, and the case law applying them has been settled in Florida for many decades.
I have probated several DIY wills that tried to leave the family home in Daytona Beach or Port Orange to one of the adult children who had taken care of the parent during the last years of life. Every one of those wills failed at the homestead provision. The property passed to the surviving spouse and descendants under the constitutional default, the relationship between the favored child and the others did not survive the resulting probate fight, and the family spent thousands of dollars in litigation that the parent had specifically tried to prevent by writing the will in the first place.
Florida homestead is also the part of the estate most likely to involve capital gains tax planning, because for most people it is the largest single asset they own. A DIY will that makes a homestead disposition the constitution will not allow has created both a probate fight and a tax problem in one document.
The Trust That Never Got Funded
A lot of the online legal forms websites sell a trust-plus-will package. You pay the fee, fill out the questionnaire, print the documents, sign in front of a notary, put the papers in a drawer, and figure you are done.
You are not done.
A revocable living trust is only useful for the assets that have actually been transferred into it. If you create a trust on paper and never retitle your house into the trust, your house is not in the trust. When you die, the house goes through full Florida probate as if the trust did not exist. Same for your bank accounts, your brokerage account, your vehicles, and anything else you intended the trust to capture. This step is called funding, and it is where most DIY trust setups quietly fall apart. The forms websites either skip the funding instructions entirely, give vague guidance that customers do not follow through on, or charge extra for funding services that the customer declines to pay for.
If you have a trust and you are not sure whether it has actually been funded, that is a fifteen-minute conversation with a Daytona attorney that can save your heirs months of probate work and a substantial amount of money.
What An Actual Daytona Beach Attorney Would Do Differently
The honest truth is that for most middle-class Floridians, the difference between a DIY will and a properly drafted estate plan is not the legal sophistication of the documents themselves. It is the conversation that comes before the documents.
A real estate planning attorney spends the first meeting asking you questions a DIY questionnaire does not ask. Where is your real estate actually titled? What were the original cost bases on your major assets? What are your current beneficiary designations on each retirement account, and when did you last update them? Are there minor children, special-needs adult children, or dependents from a prior marriage who need separate planning? Each of those questions can change what the documents actually need to say. A DIY form does not ask any of them, because a form cannot.
Most attorneys in Daytona Beach, FL who do this work routinely will quote a flat fee in the low thousands for a complete estate planning package. Will, revocable trust, durable power of attorney, healthcare surrogate, and living will, all coordinated with each other and with your beneficiary designations. Set against the size of the tax and probate mistakes a DIY plan can produce, that fee is rounding error.
How Rice Law Firm Can Help
Rice Law Firm has been handling wills, trusts, and probate work in Volusia and Flagler Counties for more than four decades. Our estate planning practice produces all of the documents above, but more importantly, it produces the conversation that decides what those documents actually need to say for your particular situation.
We serve clients across Daytona Beach, Ormond Beach, Port Orange, New Smyrna Beach, Palm Coast, DeLand, and the surrounding communities. The first consultation is confidential and there is no obligation. If you already have a DIY will or trust and you are not sure whether it works, bring it in and let one of our attorneys take a look. We will tell you whether the document holds up under Florida law, and if it does not, what would need to change to fix it.
If you have not done any estate planning at all, that is more common than people think. Give us a call. The hard part is making the appointment.