Do We Need Estate Planning?

Estate Planning, Health Care, Power of Attorney, Probate, Protecting Children / Beneficiary Designation, Durable Power of Attorney, Estate Planning Attorney, Healthcare Proxy, minor children, Probate, St. Petersburg Estate Planning Attorney, Trusts, Will

Estate planning is not just about making a will, nor is it just for people who live in mansions. Estate planning is best described in the title of this article “Estate planning is an important strategy for arranging financial affairs and protecting heirs—here are five reasons why everyone needs an estate plan” from Business Insider. Estate planning is a plan for the future, for you, your spouse and those you love.

There are a number of reasons for estate planning:

Avoiding paying more federal and state taxes than necessary
Ensuring that assets are distributed as you want
Naming the people you choose for your own care, if you become incapacitated; and/or
Naming the people you choose to care for your minor children, if something should happen to you and your spouse.

If that sounds like a lot to accomplish, you’re right. However, with the help of a trusted estate planning attorney, an estate plan can provide you with the peace of mind that comes with having all of the above.

If those decisions and designations are not made by you while you are alive and legally competent, the state law and the courts will determine who will get your assets, raise your children and how much your estate will pay in death taxes to the government. You can avoid that with an estate plan.

Here are the five key things about estate planning:

It’s more than a will. The estate plan includes creating Durable Powers of Attorney to appoint individuals who will make medical and/or financial decisions, if you are not able to do so. The estate plan also contains Medical Directives to communicate your wishes about what kind of care you do or do not want, if you are so sick you cannot do so for yourself. The estate plan is where you can create Trusts to control how property passes from one person or one generation to the next.

Estate planning saves time, money, and angst. If you have a surviving spouse, they are usually the ones who serve as your executor. However, if you do not and if you do not have an estate plan, the court names a public administrator to distribute assets according to state law. While this is happening, no one can access your assets. There’s a lot of paperwork and a lot of legal fees. With a will, you name an executor who will take care of and gain access to most, if not all, of your assets and administer them according to your instructions.

Estate planning includes being sure that investment and retirement accounts with a beneficiary designation have been completed. If you don’t name a beneficiary, the asset goes through the probate court. If you fail to update your beneficiary designations, your ex or a person from your past may end up with your biggest assets.

Estate planning is also tax planning. While federal taxes only impact the very wealthy right now, that is likely to change in the future. States also have estate taxes and inheritance taxes of their own, at considerably lower exemption levels than federal taxes. If you wish your heirs to receive more of your money than the government, tax planning should be part of your estate plan.

The estate plan is also used to protect minor children. No one expects to die prematurely, and no one expects that two spouses with young children will die. However, it does happen, and if there is no will in place, then the court makes all the decisions: who will raise your children, and where, how their upbringing will be financed, or, if there are no available family members, if the children should become wards of the state and enter the foster care system. That’s probably not what you want.

The estate plan includes the identification of the person(s) you want to raise your children, and who will be in charge of the assets left in trust for the children, like proceeds from a life insurance policy. This can be the same person, but often the financial and child-rearing roles are divided between two trustworthy people. Naming an alternate for each position is also a good idea, just in case the primary people cannot serve.

Estate planning, finally, also takes care of you while you are living, with a power of attorney and healthcare proxy. That way someone you know, and trust can step in, if you are unable to take care of your legal and financial affairs.

Once your estate plan is in place, remember that it is like your home: it needs to be updated every three or four years, or when there are big changes to tax law or in your life.

Reference: Business Insider (Jan. 14, 2021) “Estate planning is an important strategy for arranging financial affairs and protecting heirs—here are five reasons why everyone needs an estate plan”

What’s Involved in the Probate Process in Florida?

Estate Planning, Personal Representative, Probate, Trusts, Wills / Beneficiary Designation, Estate Planning, Personal Representative, Probate Court, St. Petersburg Estate Planning Attorney, Trusts, Wills

SWAAY’s recent article entitled “What involved in the Probate Process in Florida?” says that while every state has its own laws, the probate process can be fairly similar. Here are the basic steps in the probate process:

What's involved in the probate process in Florida — The basic steps involved in the probate process are similar in most states.

The family consults with an experienced probate attorney. Those mentioned in the decedent’s will should meet with a probate lawyer. During the meeting, all relevant documentation like the list of debts, life insurance policies, financial statements, real estate title deeds, and the will should be available.

Filing the petition. The process would be in initiated by the executor or personal representative named in the will. He or she is in charge of distributing the estate’s assets. If there’s no will, you can ask an estate planning attorney to petition a court to appoint an executor. When the court approves the personal representative, the Letters of Administration are issued as evidence of legal authority to act as the executor. The executor will pay state taxes, funeral costs, and creditor claims on behalf of the decedent. He or she will also notice creditors and beneficiaries, coordinate the asset distribution and then close the probate estate.

Noticing beneficiaries and creditors. The executor must notify all beneficiaries of trust estates, the surviving spouse and all parties that have the rights of inheritance. Creditors of the deceased will also want to be paid and will make a claim on the estate.

Obtaining the letters of administration (letters testamentary) obtained from the probate court. After the executor obtains the letter, he or she will open the estate account at a bank. Statements and assets that were in the deceased name will be liquidated and sold, if there’s a need. Proceeds obtained from the sale of property are kept in the estate account and are later distributed.

Settling all expenses, taxes, and estate debts. By law, the decedent’s debts must typically be settled prior to any distributions to the heirs. The executor will also prepare a final income tax return for the estate. Note that life insurance policies and retirement savings are distributed to heirs despite the debts owed, as they transfer by beneficiary designation outside of the will and probate.

Conducting an inventory of the estate. The executor will have conducted a final account of the remaining estate. This accounting will include the fees paid to the executor, probate expenses, cost of assets and the charges incurred when settling debts.

Distributing the assets. After the creditor claims have been settled, the executor will ask the court to transfer all assets to successors in compliance with state law or the provisions of the will. The court will issue an order to move the assets. If there’s no will, the state probate succession laws will decide who is entitled to receive a share of the property.

Finalizing the probate estate. The last step is for the executor to formally close the estate. The includes payment to creditors and distribution of assets, preparing a final distribution document and a closing affidavit that states that the assets were adequately distributed to all heirs.

Reference: SWAAY (Aug. 24, 2020) “What is the Probate Process in Florida?”

5 Good Reasons to Update Your Estate Plan

Estate Planning, Guardian, Protecting Children, Tax Planning, Trusts, Wills / Beneficiary Designation, Estate Planning Attorney, Guardian, Long-Term Costs, minor children, Retirement Plan, St. Petersburg Estate Planning Attorney

Most people already know that there are lots of good reasons to update your estate plan, and every estate planning attorney will tell you that they meet with people every day, who sheepishly admit that they’ve been meaning to update their estate plan, but just haven’t gotten to it. Let the guilt go.

Attorneys know that no one wants to talk about death, taxes or illness, says Wicked Local in the article “Five Reasons to Review Your Estate Plan.” However, there are five good reasons to update your estate plan and even an appearance before the Queen of England has to come second.

You have minor children. An estate plan for a couple with young children must do two very important things: address the care and custody of minor children should both parents die and address the management and distribution of the assets that the children will inherit. The will is the estate planning document used to name a guardian for minor children. The guardian is the person who will determine where your children will live and go to school, what kind of health care they receive and make all daily decisions about their care and upbringing.

If you don’t have a will, the court will name a guardian for you. You may not like the court’s decision. Your children might not like it at all. Having a will takes care of this important decision.

Your estate is worth more than $1 million. While the federal estate plan exemptions currently are at levels that remove federal tax from most people’s estate planning concerns, there are still state estate taxes. Some states have inheritance taxes. Whether you are married or single, if your assets are significant, you need an estate plan that maps out how assets will be left to your heirs and to plan for taxes.

Your last estate plan was created before 2012. There have been numerous changes in state estate planning laws regarding wills, probate and trusts. There have also been big changes in federal estate taxes. Strategies that were perfect in the past, may no longer be necessary or as productive because of these changes. While you’re taking the time to update your estate plan and making these changes, don’t forget to deal with digital assets. That includes email accounts, social media, online banking, etc. This will protect your fiduciaries from breaking federal hacking laws that are meant to protect online accounts, even when the person has your username and password.

You have robust retirement plans. Your will and trust do not control all the assets you own at the time of death. The first and foremost controlling element in your asset distribution is the beneficiary designation. Life insurance policies, annuities, and retirement accounts will be paid to the beneficiary named on the account, regardless of what your will says. Part of a comprehensive estate plan review will also cover beneficiary designations on each account.

You are worried about long-term care costs. Estate planning does not take place in a vacuum. Your estate plan needs to address issues like your plan, if you or your spouse need care. Do you intend to stay in your home? Are you going to move to live closer to your children, or to a Continuing Care Retirement Community? Do you have long-term insurance in place? Do you want to plan for Medicaid eligibility?

All of these issues are great reasons to update your estate plan. If you’ve never had an estate plan created, this is the time. Put your mind at ease, by getting this off your “to do” list and contact an experienced estate planning attorney.

Reference: Wicked Local (Aug. 29, 2019) “Five Reasons to Review Your Estate Plan”

Your Will Isn’t the End of Your Estate Planning

401(k), Estate Planning, IRA, Probate, Trusts, Wills / 401(k), Beneficiary Designation, Community Property, Inheritance, Inter Vivos, IRA, Joint Tenancy, Pension, Probate Court, Revocable Trust, St. Petersburg Estate Planning Lawyer, Tenancy by the Entirety, Tenancy in Common, Trust Living Trust, Wills

Even if your financial life is pretty simple, you should have a will. And once you have a will, that’s not the end of your estate planning. There’s still some work to be done to make sure your family isn’t left with an expensive mess to clean up. Assets must be properly titled, so that assets are distributed as intended upon death.

Your Will is only one piece of your estate planning.

Forbes’ recent article, “For Estate Plan To Work As Intended, Assets Must Be Properly Titled” notes that with the exception of the choice of potential guardians for children, the most important function of a will is to make certain that the transfer of assets to beneficiaries is the way you intended.

However, not all assets are disposed of by a will—they pass to beneficiaries regardless of the intentions stated in the will. Your will only controls the disposition of assets that fall within your probated estate.

An example of when a designated beneficiary controls the disposition of a financial asset is life insurance. Other examples are retirement accounts, such as a 401(k) or an IRA. When there’s a named beneficiary, assets will be distributed accordingly, which may be different than the intentions stated in a will.

The title of real estate controls its disposition. When property is jointly owned, how it is titled determines if the decedent’s interest in the property passes to the surviving partner, becomes part of the decedent’s estate, or passes to a third party. Titling of jointly owned property can be complicated in community property states.

In the same light, a revocable trust is an inter vivos or living trust that’s created during the grantor’s life, as part of an estate plan.

Such a trust can be used to ensure privacy, avoid the expenses and delays in the probate process and provide for continuity of asset management. A critical part of the planning is that the grantor must transfer (or retitle) assets to the trust.

Wills are very important in estate planning. To ensure that your estate plan fulfills your intentions, talk to an estate planning attorney about the proper titling of your assets.

Reference: Forbes (May 20, 2019) “For Estate Plan To Work As Intended, Assets Must Be Properly Titled”

Does Your Estate Plan Match Your Life Right Now?

Asset Protection, Estate Planning, Probate / Asset Protection, Beneficiary Designation, Estate Planning Lawyer, Inheritance, Joint Tenancy, Power of Attorney, Probate Court, Wills

If you love your family, you’ll keep them in mind when considering whether to make an appointment to update your estate

Remember to update your estate plan, especially if your life includes events like new kids, a new marriage or the death of a loved one.

If you love your family, you’ll keep them in mind when considering whether to make an appointment to update your estate, as you go through the inevitable changes of life. Not doing so can create financial and emotional burdens. That’s probably not how you want to be remembered.

According to a recent Newsday article, “Make sure your estate plan keeps up with life changes, experts say,” estate planning may seem overwhelming and depressing because it deals with issues of aging. Some people believe that estate planning is just for the very rich.

That’s not right. Estate planning is for everybody. Make a plan to do it now, in order to avoid consequential fumbles.

Let’s look at what you need to do.

Estate planning is a set of legal documents that state who will receive your assets and property when you pass away. It also specifies who you want to make medical decisions, and who should make financial decisions, if you are unable to do so yourself.

This should make everything easier for your heirs at this stressful time, when they most need it.

Remember that estate planning isn’t a one-and-done proposition. It’s wonderful that you finally got your will finished and signed, and you have your medical directives in place along with a designated individual to have your authority via power of attorney.

However, that’s not the end of it. Your estate planning documents must keep pace with change.

It’s critical that you update the contingent (secondary) beneficiaries on life insurance policies after the first spouse dies.

The birth or adoption of a child and divorce are similarly important life events that will require you to review and update your estate planning documents.

Don’t assume that establishing joint tenancy (sharing ownership in personal property, like your family home) or joint ownership over financial accounts is enough to protect your assets.

Finally, be certain to work with an experienced estate planning attorney who has the insights and legal knowledge to create a plan that aligns with your goals. An online will has the potential to create more problems than it solves. You might save some money, only to cost your heirs thousands of dollars to undo the damage.

Reference: Newsday (March 4, 2018) “Make sure your estate plan keeps up with life changes, experts say”

Do We Need Estate Planning?

What’s Involved in the Probate Process in Florida?

5 Good Reasons to Update Your Estate Plan

Your Will Isn’t the End of Your Estate Planning

Does Your Estate Plan Match Your Life Right Now?

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