Last Will and Testament
A will is a written direction controlling those
assets, which are in your name and not co-owned with another. Joint
bank accounts, shares of stock with co-owners, real estate jointly
owned with others, jointly owned brokerage accounts, life insurance
and Individual Retirement Accounts with named beneficiaries are
some of the assets not controlled by your will. Different sets of
law govern the above assets. Florida law requires a written document
signed at the end before two witnesses. The document may be self
proving without requirement that the personal representative find
the actual witnesses. Provisions in the will can be changed at any
time by use of a codicil.
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Revocable Living Trusts
A powerful tool to use to avoid probate and the
related expense and delay. Also, the use of marital and credit shelter
trusts are crucial as they relate to estate taxes. Trusts also provide
the privacy not available by probating your will in the courts.
The "grantor" creates this trust and can change or revoke
the trust at any time. He or she conveys the property to the trustee
who handles the assets in accordance with the terms of the trust.
Revocable Living Trusts are also a better way to protect your property
rather than being jointly owned with your spouse of another individual.
Jointly owned property with your spouse can waste the full use of
both unified credits. Further, jointly owned property with another
individual can make it subject to their creditors.
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Irrevocable Trusts
This type of trust cannot be changed once executed.
It is one form of planning that can be funded with life insurance
proceeds. This trust will avoid both probate and estate taxes. The
assets of this trust can be used as a refunding tool to provide
for your family, if you designate your property to a charitable
trust for tax purposes. This is especially useful when a large portion
of your assets consists of highly appreciated stock or jumbo retirement
plans.
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Life Insurance
Life insurance serves many purposes in small
to medium-sized estates. Life insurance can be used to provide support
for dependents, to fund burial and estate settlement costs, to pay
off debt, to fund buy/sell agreements, to leverage gifts to charity,
to pay death taxes and for a variety of other purposes.
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Living Will
A document that expresses your desire to be allowed
to pass away with out the use of extraordinary means by way of artificial
machines to sustain your life, when turning off the machines would
allow you to pass away peacefully. There is no agent or advocate
designated. This document is included in your medical records and
informs the physician and your family of your intention and desire.
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Health Care Surrogate
This document designates a surrogate to make
medical decisions on your behalf in the event that you are seriously
injured or become seriously ill and cannot make your own medical
decisions regarding your care. You can designate your spouse, and
if your spouse were not able, then, you would inform the physician
who would make the health care decisions. You can also designate
certain medical procedures you do not wish to be performed.
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Durable Power of Attorney
The Durable Power of Attorney (DPA) offers an
alternative to judicial guardianship and conservatorship. The "attorney
in fact" is named to act on the clients behalf in connection
with personal, business financial or other health care matters.
Authority granted typically includes the authority to take care
of finances, estate and gift planning powers, and long term care
planning. The DPA can become effective quickly and privately without
need of court approval or supervision. It remains valid until revocation
or until adjudged incompetent.
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Planned Giving
What you have accumulated can either go to your
family, the IRS or charity. You can choose two. Gifting to charities
can be of cash, insurance, appreciated properties or securities,
the portion of an asset (bargained sale), pension plan interests,
and gifts of "remainder interests". Remainder interests
include the more commonly used Charitable Remainder Trust and Charitable
Remainder Annuity Trust. The financial benefits can include income,
capital gains, gift and estate tax relief, among others.
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Family Limited Partnership
A Family Limited Partnership is created with
a Limited Partnership Agreement and is used to reduce gift and estate
taxes through discounting, split income to those in lower brackets,
help others in family learn how to manage assets among other things.
It is not recommended for those having simple estate plan needs
or where the estate is largely comprised of securities.
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Guardianship
Guardianship is a legal proceeding in the circuit
court in which an individual or entity is appointed to exercise
legal rights over the person and/or property of an incapacitated
or minor ward. In selecting a guardian, the courts normally consider
the wishes of the incapacitated person in a written declaration
of a pre need guardian or at the hearing. The Guardian must be represented
by an attorney and has several ongoing reporting responsibilities
before the court. Guardianships can be costly and may not be a reflection
of the incapacitated's intent. Florida law does look to less restrictive
means to protect the person and property of the incapacitated person.
The various alternatives include health care surrogate, living will,
durable power of attorney and revocable living trust prepared and
executed prior to the individual losing capacity.
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Medicaid Planning
Medicaid is a joint Federal and State program
available to fund medical services, including long-term care services.
You may qualify for Medicaid assistance even if you own a home,
a car, and other property. Often individuals give away or “spend
down” their estate in an attempt to qualify for Medicaid,
but if this is not handled correctly, such efforts could actually
disqualify them for coverage for months, even years. Proper planning
can help you preserve your personal assets and qualify you for Medicaid
to pay nursing home costs.
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