Lins Law Group Blog

Estate Planning Documents You Need in Florida

In every Florida estate plan, there are certain documents which you should have in place. These include the following:

 

        1.  Last Will and Testament. This document allows you to appoint a personal representative to oversee your estate and to designate your beneficiaries. You can also appoint guardians for your minor children. While a Will does not avoid probate, it acts as a “roadmap” for the probate court to follow in accomplishing your desires. If you die without a Will, Florida law will determine who inherits your assets and how your estate will be administered.

 

        2.  Living Trust. This document, also known as a “Revocable Trust,” goes beyond the Will and allows you to implement a means to pass along your property without requiring probate. The Trust also allows you to control the distribution to your beneficiaries over a period of time rather than all at once. In the right situation, a Living Trust can be used to effectively reduce estate taxes. While not every estate needs a Living Trust, you should at least consult an estate planning attorney to evaluate its benefits in your situation.

 

         3.  Durable Power of Attorney. In this document, you appoint a person or persons who can act for you on business, personal and financial matters in the event of your incapacity.

 

         4.  Living Will. This document expresses your desires in the event of your having a terminal illness, an end stage condition or are in a permanent vegetative state.

 

         5.  Healthcare Power of Attorney. In this document, you appoint a person or persons who can act for you on medical decisions in the event of your incapacity.

 

         6.  HIPAA Authorization.  This document allows your physicians and other medical providers to speak with your designated persons about your health condition.

 

Having these documents provides a comprehensive plan to protect you in the event of disability, incapacity or death. If something happens to you, your loved ones will have the means to provide for you and to settle your estate with as little inconvenience, cost and delay as possible. Because these documents involve complex legal issues, they should be prepared by an attorney who practices in the area of estate planning.

Five Good Reasons for a Living Trust.

Many people read that they need a Living Trust but don't have a clear grasp of why they need one. There are at least five good reasons that a Living Trust is a great estate planning vehicle.

1. Probate Avoidance. By creating a Living Trust and transferring your assets into the Trust, your family can avoid having to probate those assets at the time of death. This can save significant time (often in excess of a year) and expense (often as much 3% of the estate) involved in probating one's estate.

2. Estate Tax Savings. Living Trusts, when set up for spouses, can facilitate in maximizing use of the unified credit (presently $2 million per person) and the unlimited marital deduction. This can avoid estate tax on the first $4 million of a married couple's estate.

3. Controlled Distribution. A Living Trust allows the party giving the gift to control the amount and frequency of the distributions. This way, rather than a beneficiary getting a distribution all at once, the distributions can be spread out in time and amount. This can be especially desirable if there are concerns about a beneficiary's ability to handle an inheritance all at once.

4. Confidentiality. The administration of a Living Trust is not a public process. Probate, on the other hand, is generally a public court proceeding. This means that beneficaries of the probate estate can be determined by anyone. It can also mean assets of the estate can be discovered by third persons. By having assets distributed through the Living Trust, no one other than the beneficiaries and the Trustee know the details of the distribution plan.

5. Care in the Event of Disability. If you become totally incapacitated or incompetant, usually a guardianship or conservatorship will have to be established. This involves a court declaring you to be incompetant. The guardianship then falls under court oversight and can cause considerable expense. If you have a Living Trust and become incompetant, your successor trustee can take over your care without a public declaration of incompetance and without a court proceeding. This saves embarassment, inconvenience and considerable expense.

Six Reasons Not to Add Your Children on Title

          Often I have new clients come in to consult on estate planning issues but who have already taken certain "planning" action on their own. Among the worst of these is the practice of adding their children or another person onto the title to their house. The thinking is that by doing so they will avoid probate. While this practice might in fact avoid probate, it can create far more problems than it solves.

          There are at least six good reasons not to add another person (other than a spouse) onto the title of your house. These include:

          1. In the event the person faces a liability or debt claim from a third party, your property can be at risk.

          2. In the event the person gets in trouble with the IRS, your property can be at risk.

          3. In the event the person goes through a divorce, your property can be at risk.

          4. In the event you want to sell the property, you must get the other person's permission.

          5. Placing another person's name on the title could be considered a gift, thereby triggering a gift tax consequence if the property exceeds $12,000.

          6. Placing another person's name on the title could jeopardize your getting government help with nursing home care.

          There are probably more reasons, but for now, these should be reason to follow this advice. When you consider making this type of transfer...DON'T. Instead, seek sound legal counsel on other ways to accomplish your objectives (such as by a Living Trust).

          For more information, visit www.linslawgroup.com

Protecting Special Needs

Many families struggle daily with the demands of caring for a family member with health or developmental challenges. Whether it is autism, Parkinson's, birth defects or some other debilitating condition, the challenges can be immense. Perhaps one of the more challenging aspects which these families face is making sure that resources are available to provide medical and other necessary benefits. Often these families can only turn to governmental programs such as SSDI, SSI and Medicaid to meet the overwhelming demands. For example, take the situation where a child, age 6, suffers from autism. Depending on the circumstances, the family may only be able to get medical coverage through Medicaid. The child could live many, many years and need benefits during that time. If the child lives 60 years, and the average medical and other care bills for the child average $10,000 per year, then the benefits are...well...huge.

Where many families fail to prepare is in the event the parents or other family members die and leave inheritance monies to the child. That inheritance could jeapardize the child continuing to get benefits. So if the inheritance is not enough to provide for the child's needs over a lifetime, those lost governmental benefits would have an enormous impact. Instead, families with children or other members on these governmental programs should set up an irrevocable trust (also called a special needs trust or "SNT"). If this is done correctly, the inheritance monies can go into the SNT and can be available to provide for the child over his or her lifetime. So long as the SNT does not duplicate governmental benefits and otherwise complies with the limitations set forth by the applicable governmental program, then the benefits will continue uninterrupted. However, an SNT is a comlicated planning document which must be prepared by an attorney skilled and experienced in drafting these kinds of trusts.

For more information, visit www.linslawgroup.com