When you hear the saying “you can’t take it with you”, you either smile or laugh because we visualize a picture in our mind of piles of money in an open coffin. Or we squirm because we realize that we have never prepared a Will or a Trust.
If a person dies, owning assets that are titled in their name alone, for which there is no joint owner, and when there is no named beneficiary, those assets will generally have to pass through probate. If that deceased person has no Will or Trust, the State of Florida has established laws (Florida Statute Chapter 732, F.S.732.101, F.S. 732.102 and F.S. 732.103) that directs to whom the assets will be left. The provisions of those statutes apply to every resident of Florida who dies without a Will or Trust, with no exceptions, often producing harsh and unfair results, especially in blended families.
To avoid those unfair results, it is important that you put your wishes in writing, and that the documents be prepared with the assistance of a qualified estate planning attorney. Do-it-yourselfers save some money, but often produce documents that create nothing but complicated messes, that are far more expensive to “clean up” than the amount that an attorney would have charged to prepare the original document. Getting forms off of the internet can help, but if the documents are not prepared in accordance with Florida laws, the documents may not be admissible in Florida Courts.
Therefore, I would urge you to have a Will or Trust prepared, by an experienced attorney, who can help you carry out your wishes.
A valid Last Will and Testament will name your Personal Representative (aka as an Executor or Administrator), will specify to whom your assets will be left, will list any conditions as to the distribution of those assets (if there are minors), and direct that your legal debts be satisfied. It is wise to name alternative Personal Representatives, in the event that your first choice is unable to act, and contingent beneficiaries in the event that your named beneficiary pre-deceases you. While a young person can inherit if they are 18, it is often not a good idea to leave assets to a young person who may squander everything that you spent a lifetime to accumulate. Therefore, you can list the age at which a beneficiary can get full control of their inheritance (for example, at age 25, or 50% at age 25 and the balance at age 30) while naming the person who will manage those assets until they are fully released. You can also specify how your remains will be handled (burial, cremation) and where they will be laid to rest (cemetery, mausoleum, or ashes on top of the fireplace mantle).
The drawback to having a Last Will is that it will not necessarily avoid probate. In fact, it is designed so that it will orderly and efficiently pass through probate.
The alternative to a Last Will is a Living Trust (commonly called a Revocable Living Trust), which is designed to replace a Will. The basic theory behind a Living Trust is that a person or couple will transfer ownership of their assets (on paper only) to their Trust, or make certain that their assets will be left to their Trust when they die. By taking these actions, those assets will not have to pass through probate, because the “owner” of those assets (the Trust) has not died. Having assets in a Trust during your lifetime does not affect the way you conduct your everyday affairs, and does not change the way you file your taxes. Placing an item in a Revocable Trust, does not cause you to lose control of your asset and does not prevent you from changing your mind and removing the asset from the Trust. Flexibility is one of the main advantages of a Revocable Trust. Not only can you add or remove assets easily, but you can amend or change other terms of the Trust easily.
Most importantly, though, a Revocable Trust that is properly prepared and funded will avoid probate, thus saving time (probate often takes more than a year to complete), money (the cost of a trust is often much less that the cost of probate), and insures privacy (because the Court is not involved, your assets, your net worth and your heirs will not become ‘public record’). In addition, because the courts are not involved, provisions for young children and less-than-mature young adults are easier and cheaper to manage.
The Trust takes effect immediately upon signing it, unlike a Will which does not take effect until you die. During your lifetime, you and your spouse are in total control of the Trust. In the event of your disability, or the inevitability of death, the Successor Trustee that you have chosen will handle your affairs. The Successor Trustee can be given specific guidelines, or broad discretion, to handle your wishes, looking out for your heirs, just as you would take care of them if you were still alive.
The system set up by each state, to handle the orderly transition of property and assets from a deceased person to living heirs and beneficiaries.
Many people are under the misconception that if you have a Last Will and Testament, it will not be necessary to go through the probate process. Unfortunately, having a Will often guarantees that a probate will be necessary. There are several ways to avoid probate, which I can help you with, including Living Trusts, appropriate beneficiary clauses and instruments like a “Ladybird Deed”. I have handled numerous cases, where individuals tried a “do it yourself” legal document and wound up creating more problems than they solved. I can help you avoid a probate, but I can also efficiently handle a probate, if one becomes necessary.
There are several types of Probate, with the most common being called “Formal Administration”. In Formal Administration, a personal representative, (either someone who is named in a Will, or a close relative/friend who petitions the Court to serve in that position) is required to gather all of the assets (inventory), pay all of the legitimate bills of the deceased person, and then to distribute the remaining balance to the rightful heirs. While that sounds simple enough, detailed and accurate documents must be prepared and presented to the Court, all interested persons (legal heirs, named beneficiaries and creditors) must be given legal notice of most activities of the personal representative, and a specific final accounting must be prepared for, and approved by, the Court. For that reason, it is necessary to have an experienced attorney “handle the probate” for the personal representative.
One of the greatest human achievements of the last 50 years, have been our medical breakthroughs, that have allowed us to live longer lives. But at the same, in our society, families tend to be smaller than in the past, we tend to move further away from our birthplaces, and economics demand that we have two-worker households. So, extended families are often not available to take care of an ever growing elderly population.
As we get older, and less able to take care of our own medical and financial needs, we must often rely on others to make crucial decisions for us. In addition, HIPAA regulations and confidentiality concerns, will not permit those ‘other’ people to speak to our doctors and financial institutions about our personal affairs. So, whereas, for a middle aged person, a Power of Attorney or a Medical Directive is primarily needed to deal with an unexpected emergency, for an elderly individual, these documents may become essential on a regular and recurring basis.
We can provide ‘enhanced’ documents that are specifically designed to deal with the needs of the elderly.
We can establish a ‘legal guardianship’ in the event that a person is totally incapable of handling any of their own affairs.
We can assist with “Medicaid planning”, to help someone qualify for Medicaid benefits, without ‘spending down’ all of your assets.
In the event that one spouse (the ‘well spouse’) is taking care of an incapacitated spouse, (or that spouse is in an assisted living facility or nursing home), we can tailor the joint Trust or the individual Last Wills, so that the death of either the incapacitated spouse, or the sudden death of the ‘well spouse’, will not produce unintended costly results.
Most of all, we can provide you with the insight and the planning, to provide peace of mind for you and your loved ones.
All of us work hard to provide for our families, and for ourselves. We do it not only to meet our current needs, but for our retirement years and for our loved ones, after we are gone. The last thing that anyone needs is to have some financial misfortune destroy or eliminate all that we have accumulated.
Whether it is as the result of a business failure, an accident which results in a lawsuit, or a major medical crisis, a lifetime of savings can be eliminated in short order.
Whether it is your main source of income or just a serious hobby, an error in judgment or a negligent act by you, an employee or an agent can result in a lawsuit that can take down your “business”. Unfortunately, if you have not separated your business enterprise from your personal assets by forming a corporation or a limited liability company (L.L.C.) , a court judgment could very likely be satisfied by placing a lien on your personal assets. A corporation or L.L.C. needs to be carefully set up, not only to create a “firewall” that limits your losses (liability) to your business assets (and protecting your personal assets), but to establish the ground rules (shareholders’ agreement or membership agreement) for you and your business partners. Though few people give it much thought at the outset, all business enterprises are destined to end: by death, by retirement, by agreement of the ‘partners’, or unfortunately, by a dispute between the ‘partners’. Therefore, your exit strategy is as important as your decision to form the business.
A popular source of providing a stream of income is the purchase of real estate (other than your homestead) to be used in the thriving rental market, or as a ‘vacation’ site. While the State of Florida protects your homestead from creditors and from most lawsuit judgments, it does not provide the same protection for these additional properties.
A tenant or vacationer, (and their guests), who get hurt while on your property, are probably going to sue the owner of the property. That owner should be your L.L.C. (the recommended choice when it comes to real estate investment) or your corporation, and not you personally.
A disabled child or adult may require the assistance of another individual to take care of their personal property and affairs if they are legally unable to do so, for themselves. We can assist clients in each of the following areas.
In the case of a minor, the disability can be based on physical or mental incapacity, or it can be simply a case of the child being under the age of 18 and legally incapable of receiving an inheritance or proceeds of a life insurance policy. We can assist the family in establishing a guardianship that will allow the adult to supervise the child and his or her assets.
In the case of a child having “autism spectrum disorders”, a parent is able to handle all of the legal and medical affairs of the child under the age of 18. But, upon reaching the age of 18, that same young person would now be required to sign all of their own documents, and privacy laws prohibit medical and educational providers from sharing any information with their parents. In such a case, we can petition the Court to name the parent as a Guardian Advocate for that child.
In the case of an elderly adult, who is no longer capable of managing their own affairs, a formal guardianship must be filed with the court, requesting that a Guardian be named to manage the property, and take care of the disabled adult (the Ward). This process is both complicated and lengthy and requires the assistance of an experienced attorney to coordinate the initial effort. More importantly, an attorney must prepare annual accountings and reports to the Court, to assure that all procedures are being followed ,and all protective measures are in place for the Ward