Estate Planning

If you own a home, have some savings, or own any goods such as a car or furniture, then you have an estate.  An estate is the total property owned by an individual prior to the distribution of that property under the terms of a will, trust, or probate (inheritance laws).  An individual’s estate includes all assets and liabilities.  No matter your net worth, it is important to have a basic Estate Plan in place.  Such a plan ensures that your family and financial goals are met after you die. When putting together an Estate Plan, you must be mindful of both federal and state laws governing estates.  Therefore, although not required, hiring a lawyer may help you to create the best Estate Plan for your specific needs.

What Is Estate Planning and Who Should Do It

Ask yourself these questions:

  • Who do you want to inherit your assets?
  • Who do you want handling your financial affairs if you are ever incapacitated?
  • Who do you want making medical decisions for you if you become unable to make them for yourself?

Estate Planning is the process through which a person develops a plan and prepares documents to conserve, protect, and distribute estate assets before and after death for the benefit of loved ones and charities, taking into consideration the effect of state and federal tax and administrative laws and regulations.  It can also involve planning for the use of your assets for your care if you become unable to manage your affairs during your lifetime.

You should have an estate plan if:

  • you care about who inherits your property;
  • you care about your health care treatment; and wish to avoid a guardianship of your person
  • you care who makes end of life decisions for you (in certain instances continuing or terminating life support)
  • you are the parent of minor or disabled children; and/or
  • you care who manages your assets in the event of your incapacity and you want to avoid the public proceedings of a possible guardianship of your property and/or probate.

An Estate Plan has several elements, including:

  • a Will;
  • a Power of Attorney
  • a Living Will
  • a Health-care proxy (medical power of attorney)
  • a Revocable Trust, if determined to be appropriate

What Happens if There Is No Estate Plan

If you do not plan for what happens to your estate upon your death, your estate will go into Probate and the courts will make those decisions for you.  The consequences of not having an estate plan can be loss of control over how and when your assets are distributed, family friction, delays in accessing your assets and providing for your family, and unnecessary probate expenses.

What is a Will?

Everybody should have at least a Will.  A Will tells the world exactly how you want your assets distributed after your death.  It is also the best place to name guardians for your children.  Dying without a Will can be costly to your heirs and leaves you with no say over who gets your assets.  A Will is effective only upon the creator’s death.

What is a Revocable Trust?

Unlike a Will a Revocable Trust is effective upon signing.  A Revocable Trust is used to manage your assets during your lifetime and upon your death.  It directs the trustee in how to distribute your remaining assets. An individual or a couple can create a Trust. The person who creates a Trust is called the “grantor” or “settlor.”  The person responsible for the management of the trust assets is the “trustee.”  You can serve as trustee, or you may appoint another person, bank, or trust company to serve as your trustee.  The Trust is “revocable” since you may modify or terminate the Trust during your lifetime, as long as you are not incapacitated.  One of the advantages of a Revocable Trust is that should you become incapacitated, the trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions.  This may avoid the need for a court-appointed guardian of your property.

A Trust or Will with testamentary trust provisions is essential in managing the care of your children or grandchildren upon your demise.

Protection from Claims of Creditors

In Florida, neither trust assets nor assets passed to beneficiaries under a Will are protected from the claims of your creditors, except for your homestead property and otherwise exempt property.  During your lifetime the assets in a revocable trust are treated as owned by you, and subject to the claims of your creditors as if you owned them in your personal name.  If the trust assets remain in trust after your death, the interests of the beneficiaries may be protected from their creditors by a “spendthrift” provision in the trust agreement.

Florida law provides special protection for many types of assets, including assets owned by a husband and wife as “tenants by the entirety” and beneficiary designations on investment accounts and life insurance policies.  Consideration should be given to these assets when you decide how to fund your Revocable Trust.  An attorney can advise you on the types of assets that offer creditor protection and the effect of funding your trust with them.

Why Plan Your Estate

Estate Planning is needed to avoid dying “intestate”.  Dying intestate means dying without having created either a Will or a Trust that provides instructions for passing your estate on to your heirs.  These hazards (probate, creditors, con-artists, lawsuits, judgments, lawyers, and death taxes) can damage much of the value of your estate and allow your property to go to unintended heirs and be disbursed in unintended ways.

Our firm can, among other things, help you and your family prepare for the future by drafting healthcare surrogate designations, living wills, preneed guardianships, and Last Wills and Testaments, as well as by appointing powers of attorney and establishing Trusts.  For more information please contact our office.