Fundamental Estate Planning
Only through proper estate planning
the person or persons who will manage your estate upon your death.
who gets your estate when you die.
when and how our beneficiaries will get their share.
avoid probate and guardianship.
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Last Will and Testament
A last will simply appoints who
manages your estate when you die, and specifies who gets your estate and when
they get it. In it you can also name a
guardian for minor children, who will be given preference in a guardianship
preceding. A last will does not avoid
probate. Also, because it takes
effect only upon your death, it does not avoid guardianship.
Trusts: Revocable Living Trusts, Irrevocable Trusts, Special Needs Trusts, etc.
As its name implies, a
revocable trust is a trust that you can revoke or amend. Because it is revocable it is not a new
taxable entity so its creation has no income tax ramifications. You are the trustee and sole beneficiary
during your lifetime, so that you maintain complete control of your
assets. Because you retain complete
control of your assets the revocable trust also provides no asset protection. A properly crafted and funded revocable trust
is commonly used to avoid probate and guardianship.
In contrast, an irrevocable trust
is a trust that you cannot amend, at least not without court approval or the
consent of the trustee and beneficiaries.
When you transfer asset to an irrevocable trust they are no longer owned
by you, so it is to be used only under limited circumstances. The most commonly used is the Irrevocable
Life Insurance Trust, which is used to remove life insurance from your estate
for estate tax purposes.
Special needs trusts come in
a number of varieties, and are used to provide for a disabled person without
disqualifying the person from Medicaid.
They also protect assets from Medicaid liens.
Powers of Attorney
A power of attorney is a
legal document that is used to appoint an agent or agents to manage your
assets. As of October 1, 2011, all new
powers of attorney in Florida must be effective immediately, so “springing
powers”, i.e. powers that take effect only upon incapacity, are no longer effective
unless they were created before that date.
A power of attorney is useful to avoid guardianship in the event you
become incapacitated. However, powers of
attorney expire upon death so cannot be used to avoid probate.
Health Care Documents (or Advance Directives)
The two health care documents
in Florida are the health care power of attorney, otherwise known as a health
care surrogate, and the living will.
In a health care power of
attorney you appoint an agent or agents to make medical decisions for you. This could be needed be at any time
regardless of your stage in life, for example, if you are otherwise healthy but
become unconscious and need medical care.
A living will on the other
hand is a document in which you express your wishes regarding “end of life”
medical procedures. In it you can say
whether you would like artificial life prolonging measures (basically anything
other than pain medication and comfort care) in the event you are unable to
communicate your wishes at the time, have a terminal condition or an end stage
condition, or are in a persistent vegetative state (the Schiavo situation), and
have no medical probability of recovery.
For more information on
estate planning in Florida, please contact us.
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