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 

Five Steps to Protect Your Children

For parents with minor children, there are at least five steps to take to protect their children in case of a catastrophic event involving the parents. While the chances of both parents dying or becoming incapacitated at the same time may seem remote, in today's fast-paced, technology driven world, it can happen. Whether it involves a car accident, an airplane crash or a criminal attack, the potential for the unexpected is not beyond possibility. The reality is that parents cannot and should not wait until a crisis to try to address these issues.

Here are five considerations to address:

1. Appoint a guardian of the children in the event both parents die or become incapacitated.

2. Have an emergency plan to provide for the children in the first 24-72 hours after a crisis.

3. Have a trust in place to hold, administer and distribute assets for the children's benefit.

4. Leave instructions for the guardian and trustee regarding how you want the children to be cared for, raised and provided for.

5. Parents should make sure that they have adequate monetary resources available to assist the guardian in raising the children.

In order to address these considerations, the best vehicle to do so is through a skillfully drafted Will or Living Trust. Once these documents are in place, it is equally important for the parents' loved ones and trusted advisors to know where these documents are located and to have access to them. There is little benefit to having a plan if no one knows about it or if no one can access it.

For more information, visit www.linslawgroup.com

New Year's Resolutions-Assess Your Protection

As the year 2008 begins, my advice to clients, friends and family is to take steps to protect yourself, your business and your family. The first step is to take the time to assess your situation and evaluate what areas you have protected and what remain exposed. In making this assessment, you can accomplish a lot on your own by simlpy asking some basic questions. For example, these are some of the issues to be addressed:

Do you have an up-to-date Will or Trust?

Does your Will or Trust designate primary and alternate beneficiaries, executors/personal representatives, trustees and guardians of minor children?

If you have a Trust (a Living Trust or a Revocable Turst), have your assets been transferred into the Trust or has the Trust been designated as beneficiary?

Do you have a Living Will that expresses your desires if you should develop a terminal illness or be in a permanent vegetative state?

Do you have a Healthcare Power of Attorney which appoints someone who can make medical decisions if you are unable to do so?

Do your Living Will and Healthcare Power of Attorney comply with the new HIPPA laws by authorizing physicians and hospital staff to discuss your situation and care with your healthcare agent/surrogate?

Do you have a Pre-Need Designation of Guardian where you designate who you would want to act as your guardian if one needed to be appointed?

Do you have a Durable Power of Attorney which appoionts someone to act for you on business, personal and financial matters if you should become unable to act for yourself?

After you have completed the assessment and evaluation process, then you should act to correct any "gaps" in your protection. This most likely will involve going to see an experienced estate planning attorney. Set up a consultation and discuss with the attorney your needs and concerns and have the attorney prepare any necessary documents.

If you resolve to listen to these suggestions, you will enter 2008 with the peace of mind that comes from knowing that you, your family, your business and your wealth are protected.

To learn more, visit www.linslawgroup.com  or contact me at mike@linslawgroup.com .

If only she had...

Recently, a person close to me had a massive storke. She was in her early 40's. By all accounts, she was too young and seemingly healthy. This was certainly not expected, especially by her. The stroke has left her debilitated and unable to perform even the most basic activities of daily living. She has to be fed, bathed, dressed and can only communicate by vague gestures using her only remaining slightly-usable hand. The worst of it is that her prognosis for a decent recovery is very uncertain. This will most likely mean that she will need someone to act for her and make decisions on her behalf. Unfortunately, she is single and she had never executed a Living Will, a Durable Power of Attorney or a Healthcare Power of Attorney. Her present condition makes it questionable whether she has the cognitive capacity or the physical abilty to execute any of these documents at the present time. Who will have the power to pay her bills, to deal with her insurance company, to speak with her doctors and to decide on future treatment and care? What everyone who loves her keeps saying is: "If only she had....If only she had taken care of executing these documents before any of this happened."

As a practicing attorney over the last 20-plus years, I have heard the same lament repeatedly. I have seen families torn apart and their accumulated wealth destroyed because they never got around to signing these basic documents. What is amazing is that the cost of these is usually less than $500.00 yet not having them in a time of need can leave a person unprotected and can ultimately cost tens of thousands of dollars  more (such as for a guardianship)in order to address the same protections that these simple documents provide. It's really a shame..."If only she had..."

I hope you will not ever be faced with such a devastating health crisis, but if you are, don't cause anyone to have to say about you: "If only she had..."

www.linslawgroup.com