Estate Planning

Estate Planning with a Will

A will is a basic and traditional estate planning tool.

Every person who owns assets should have, at a minimum, a will. A will dictates the distribution of an individual’s assets upon death. In general, when a Florida resident dies without a properly drafted will, his or her property will be transferred according to Florida intestacy laws. This means that the State of Florida may dictate the distribution of a Florida resident’s assets if such individual did not have a properly drafted and enforceable will in place at the time of death. However, if a Florida resident has a properly drafted and enforceable will in place at the time of death, legal title to assets will pass in the manner intended by such individual.

In addition to having a will, Florida residents should also consider putting in place additional estate planning documents for ease of administration of the applicable estate and in order to reduce the costs that may be involved in the probate process. Even with a will in place, the distribution of the assets of many Florida residents is subject to the probate process. However, this process can sometimes be avoided with the use of a revocable living trust. Proper planning with a trust could enable an individual to avoid the probate process altogether, which will, in turn, save money as well as time upon the individual’s death.

In the event that a revocable living trust is used, it is generally coupled with a special will known as a “pour-over will”. The purpose of the pour-over will is to serve as a backup for the revocable living trust. It names the revocable living trust as the entity that should receive the assets of the deceased individual. This ensures that any assets that were not specifically placed into the revocable living trust will still end up in the revocable living trust by default.

Additional estate planning documents should also be put into place in the event that the intended beneficiary is a minor. Real estate and other assets should generally not pass directly to a minor, as they do not have the capacity to manage such assets. Instead, a trust should be used to provide the minor with the benefit of the assets, while leaving the administration and management in the hands of an adult.

Estate Planning with a Revocable Living Trust

Some people think that if they don’t have an estate worth over $1 million dollars, then they don’t need a trust. Tax planning for large estates can be an important motivating factor to do a living trust, however, there are other important reasons to use this type of planning. Clients enjoy the cost savings involved with the administration of a revocable living trust, as opposed to probate, and the control they have over the assets that they have transferred to their revocable living trust. The trust can provide for the surviving spouse, save estate taxes (depending on the type of trust) and help avoid incapacity and guardianship issues. Moreover, the trust provides a plan and a mechanism for the makers of the trust that will benefit them as they advance in years. If the makers of the trust no longer feel that they want to or can handle their own assets, the successor trustees, typically their children, will administer the assets of the trust for the benefit of their parents. Upon the passing of the parents, the remaining assets are transferred to the children, for instance, through trust administration, without going through the probate court.

The following is a list of some of the reasons to consider trust planning for your family:

  • • Avoids probate at death, including multiple probates if you own property in other states
  • Could prevent court control of assets at incapacity
  • If funded properly, brings all of your assets together under one plan
  • Provides maximum privacy
  • Quicker distribution of assets to beneficiaries
  • Assets can remain in trust until you want beneficiaries to inherit
  • A revocable trust can be changed or cancelled at any time
  • Difficult to contest
  • Prevents court control of minors’ inheritances
  • Can protect dependents with special needs
  • Prevents unintentional disinheriting and other problems of joint ownership
  • Can be professionally managed with a corporate trustee
  • Can reduce or eliminate estate taxes
  • And, very importantly,…. Gives you peace of mind

Transferring Assets To Your Living Trust

It is very important that, if you use trust planning, all of your appropriate assets are transferred into your trust. Please remember that assets that are not transferred into the trust could end up in probate, which can be expensive and time consuming. The process of transferring your assets to your trust is called “funding.” When you fund your trust, you physically change the titles of your assets from your individual name (or joint names, if married) to the trustee of your trust. You may also want to change certain beneficiary designations to your trust so that those assets will transfer to the trust and be administered pursuant to the terms of the estate plan.

The trustee is named by you in your trust and, most likely, you will want to name yourself as trustee during your lifetime. This will enable you to have control over your assets, even though they are in the name of the trust.

Your living trust can only control the assets that are put into it. Simply creating a trust does not mean that your assets will be controlled by the trust. All of your assets must be transferred into the trust.

The process of transferring assets to the trust is not difficult but can take some time. The various financial institutions are usually very familiar with transferring assets to trustees of revocable living trusts, and they have their own forms for doing so.

We have experience funding trusts and can do it quickly and efficiently for you. If you prefer, we will fully fund your trust by preparing all documents for your signature, contacting all investment companies at which you have assets and advising them of your desire to re-title your assets into your living trust. You will receive a written confirmation from us when all of the re-titling is completed.

Some of the types of assets that you may want to transfer to your trust are:

  • Real property (land, other real estate)
  • Bank/credit union accounts, safe deposit boxes
  • Investments (CDs, stocks, mutual funds, etc.)
  • Notes payable (money owed to you)
  • Life Insurance (if not placed in an irrevocable trust)
  • Business interests, intellectual property
  • Oil and gas interests, foreign assets

Please note that IRA and tax deferred plans should not be transferred to the trust.

When You Should Review Your Existing Estate Plan

Many people think that Estate Planning is a one-shot deal. They implement a plan and then lock it away for years and years. In reality, your life is constantly changing, and it is critical that your estate plan change along with it. Your estate planning documents should be reviewed by you and an attorney regularly to ensure that they are still aligned with your goals. There are numerous events that could change your estate planning needs.

We recommend that your estate plan should be reviewed every three to five years.

Many clients are surprised at the number of changes that can occur in a relatively short period of time and have an effect on existing wills. If you have not reviewed your estate planning documents recently, it may be a good idea to make an appointment to do so.

Some reasons to consider reviewing and/or revising your estate planning documents are listed below:

  • Marriage, remarriage or divorce
  • Death of a spouse
  • Big change in total asset value
  • Death or incapacity of an executor, guardian or trustee
  • Relocation to another state
  • Purchase of real estate outside of Florida
  • Birth or adoption of a child or grandchild
  • Serious illness of a family member
  • Purchase or sale of a business
  • Retirement
  • Marriage or divorce of any beneficiary
  • Beneficiary develops a drug, alcohol, or gambling problem
  • Beneficiary becomes financially irresponsible
  • Beneficiary begins a career with increased risk of law suits (lawyer, doctor, etc.)
  • Changes in tax laws
  • Three or more years have passed since your last estate plan review with an attorney

Protect Your Loved Ones With A Special Needs Trust

Do you worry about what will happen to your loved one who has special needs?
We can help your child or family member who is handicapped or has other special needs. Leaving a special needs trust for your child or loved one is one of the most important and loving things you can do for them.

Leaving money in a trust for a loved one with special needs will allow him or her to continue to receive assistance from government programs. The trust can provide things that government programs will not provide, therefore providing them with a higher quality of life. The trustee that you designate can ensure that the funds are being used in the manner that you intended. This type of trust is much is more effective than leaving money outright to siblings or other relatives for the following reasons:

  • You can ensure that all of the money will be spent on special needs.
  • The money left in trust will not be subject to credit problems, divorce, law suits or other financial problems that a sibling or family member may have.
  • You protect the privacy of the special needs child
  • You can designate your wishes for your child and convey your unique insights about your child – and leave them in a formal, written format

We can help you ensure that you set up an appropriate plan to take care of your loved ones and give yourself peace of mind.

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