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Irrevocable Trust Agreement

Wed, 22 Sep 2021 16:39:16 GMT

What is an Irrevocable Trust?

An irrevocable Trust in Florida is a trust agreement that by its terms cannot be revoked or amended. The important part for the maker (settlor) of the Trust to understand is basically, once the trust is made and finished, it cannot be changed. You may not amend or change anything in your trust once it is completed and notarized. Your beneficiaries or successor Trustee(s) may only change an irrevocable trust in unusual circumstances.

Typically, irrevocable trusts are created for tax purposes, however irrevocable trusts can also be used in Medicaid situations or with Life Insurance.

In Discussing “Irrevocable Trusts” in this section we are referring to trust which are made with the intent of being irrevocable. Trusts may also become irrevocable by statute when a Settlor dies.

Irrevocable Trusts are infrequently used and should only be created after very careful consideration and consultation with an attorney.

Mistakes of the Rich and Famous: Doris Duke

Wed, 01 Apr 2020 18:05:06 GMT

Doris Duke. Mistake: Bad Choice of Executor

Doris Duke, the tobacco heiress who died in 1993, had an estimated estate of $1.3 billion. She inherited most of her money at the age of 12 when her father died. However, she responsibly managed this wealth over the course of her lifetime, increasing the inheritance value. Ms. Duke originally set up her Charitable Trust and Will with her longtime friend and physician as executor. However, months before her death, ill and secluded in her California home with only her butler, and she amended her documents and named her butler as the person to fulfill her wishes.

Following her death, the former executor of her estate, her longtime friend and doctor, contested the validity of her decision to change executors, believing that Ms. Duke was not of right mind when she executed the new will, and was a victim of elder abuse by her butler.

Contesting a will based on elder abuse is generally done for two reasons: (1) Lack of mental capacity of the testator (person signing) at the time of signing; (2) The person contesting believes that the testator was subject to undue influence at the time of signing.

Undue influence is a serious legal contractual defense and is generally defined as a contractual situation in which "one party to the contract is a person with weaknesses which make him likely to be affected by such persuasion, and that the party exercising the persuasion is someone in a special relationship with the victim that makes the victim especially susceptible to such persuasion;"[1][1] Many states have their own specific definitions within their statutes.

After three years of legal battles, utilizing 40 lawyers, and using $10 million dollars in legal expenses Doris's butler eventually agreed to take a payout in exchange for renouncing his seat on the Doris Duke Charitable Foundation board, and stepping down as executor.

Ms. Duke's situation is a two-fold lesson. The planner must be diligent in their estate planning and be aware of the risk of financial elder abuse as they age. Family members or close friends are often named as Personal Representative or Successor Trustee of estates, but if you are unconfident in their abilities, banks, credit unions, and even estate planning attorneys are able to serve in these capacities. Don’t make the mistakes that Doris Duke made when she changed her estate plan. Consult a local attorney to set up a Trust and to make sure that any amendments (changes) you make are in your best interest.

Mistakes of the Rich and Famous: James Gandolfini

Wed, 01 Apr 2020 17:25:31 GMT

James Gandolfini. Mistake: Not setting up a Marital Trust and Probate

“If someone owes you money, even if you gotta crawl, you get it” –Paulie Walnuts

Most people remember the iconic show “The Sopranos” where James Gandolfini played the Mob Boss, Tony Soprano. At the show’s conclusion, Mr. Gandolfini appeared in good health, but at the age of 51 he suffered a heart attack, resulting in his death.

When Mr. Gandolfini planned for the end of his life, he attempted to plan so that his assets would go to specific decedents. He decided to divide his estate between multiple beneficiaries through the use of a will; these included friends, two sisters, his son, daughter, and his most recent wife. What Mr. Gandolfini didn’t do while planning, was take proper steps to ensure that the IRS would not be the main beneficiary to his assets. He also didn’t protect his estate from probate.

By not setting up a marital trust, he missed his opportunity to establish an unlimited estate tax deduction for gifts to be made to a surviving spouse. Gandolfini left 20% of his estate to his surviving spouse and without the marital trust, the IRS collected close to $30 million of his $70 million estate. Additionally, his estate had to be probated, removing more money from his pool of assets.

In family situations where a parent remarries and there is the creation of a step-child/step-parent relationship, the biological parent may be reluctant to leave all of their estate to their new spouse. In cases involving children of previous marriages the use of a marital trust can usually take the advantage of the marital deduction while still ensuring that children will eventually receive most of the estate. A marital trust is a unique estate planning tool that allows the grantor to provide for both their spouse, while also ensuring that their children receive an inheritance. The underlying value to this type of trust is that you are protecting your assets from the claims or a subsequent spouse (should your living spouse remarry).

Don’t make the mistakes that James Gandolfini made when he created his Estate Plan. Consult an attorney to set up a Trust and to make sure that your Trust is the right fit for your and your family’s needs.

The Difference Between a Will and a Trust

Thu, 20 Feb 2020 21:14:00 GMT

Trusts and wills are two very necessary parts of Florida estate planning. Trusts and wills may look very similar, they both guard your assets at different different times. A last will and testament goes into effect after the death of the testator. A living trust goes into effect as soon as it’s signed. You can change your will or your revocable living trust right up until the time of your death as long as you remain mentally competent. A grantor who forms a revocable living trust typically names a successor trustee to take over management of the trust after his death.

A will can only cover the disposition of property possessed in your sole name at the time of your death, including interests you might have in property such as a tenancy in common. It CANNOT address assets that pass directly to a beneficiary by contract or by operation of law such as life insurance policies or joint tenants with rights of survivorship.

A living trust can govern and distribute any property it’s been funded with. The grantor transfers his assets into it after it’s formed. These can include life insurance policies as long as the trust and not the grantor owns the policy, as well as tenancy in common interest.

Property passing under the terms of a last will and testament requires probate to legally transfer to living beneficiaries. This includes property that’s directed to a testamentary trust because the probate process essentially forms this trust. Wills become a matter of public record when they’re submitted to the court for probate. The terms of a living trust remain private. Property passing under the terms of both revocable and irrevocable living trusts avoids probate. The trust’s terms are the mechanism by which its assets can move into a new, living individual’s ownership.

A trust can continue to hold property for the benefit of certain beneficiaries after the grantor’s death, such as minor children who cannot legally take ownership of their own property until they reach the age of majority or spendthrifts who might otherwise whip through their inheritances.

The successor trustee would simply keep the trust up and operating and distribute money or property to beneficiaries under the terms you set when you created the trust. A will does nothing to plan for mental disability because it doesn’t go into effect until the testator dies. Her loved ones would have to approach the court to ask that a conservator or guardian be appointed to handle her affairs if she were to become mentally incapacitated before that time. This can be both costly and stressful.

Provisions for disability can be written into a revocable living trust. The successor trustee the grantor has named to take over at his death—someone of his choosing, not the court’s—will also take over if he becomes incapacitated and unable to manage his own affairs.

What are Irrevocable Trusts in Florida?

Tue, 14 Jan 2020 21:36:59 GMT

What is an Irrevocable Trust?

Typically, irrevocable trusts are created for tax purposes, however irrevocable trusts can also be used in Medicaid situations or with Life Insurance.

Irrevocable Trusts are infrequently used and should only be created after very careful consideration and consultation with an attorney.

Helping the Elderly Make a Power of Attorney

Tue, 07 Jan 2020 21:40:57 GMT

Powers of attorney can bring peace of mind to both elders and their caretakers. Powers of attorney allow elders to empower a trusted person to make decisions about health care and finances on their behalf. Having such powers in place when a loved one loses the ability to make sound financial decisions can be priceless, especially if the person in need of help denies or is not aware of worsening physical or mental health. Here is your guide on how to get a power of attorney for elderly parents.

What Documents Will You Need?

If the person you’re caring for is still of sound mind (a little forgetful is okay, as long as they can understand the plans you suggest) and receptive to the idea of setting out medical wishes and naming someone to handle financial matters, that will make things much easier. You can help the person prepare and finalize both medical and financial powers of attorney. These documents will name someone perhaps you to oversee medical care and handle financial matters. Here’s a brief overview of both documents.

Medical power of attorney. This document often called a “durable power of attorney for health care” names a trusted person to make healthcare decisions for someone who can no longer do so, or simply does not wish to. Depending on the person’s state of residence, the health care representative may be called an agent, attorney-in-fact, health care proxy, health care surrogate, or something similar.

The health care agent X works with doctors and other health care providers to make sure the person who makes the document gets the kind of care they wish to receive. When arranging care, the agent is legally bound to follow the document maker’s treatment preferences to the extent that he or she knows what they are.

To make health care wishes clear, the person you’re caring for can use a second type of health care document often called a living will or a health care declaration to provide written health care instructions to the agent and health care providers.

To make it simple, some states combine a durable power of attorney for health care and living will into a single form, commonly called an advance health care directive.

Financial power of attorney. The financial power of attorney you’ll want to help your loved one prepare is called a “durable power of attorney for finances.” This document will let your family member or friend give someone else full authority to handle financial matters. The appointed person is usually called the “agent” or “attorney-in-fact,” though he or she most definitely doesn’t have to be an attorney.

The agent can handle mundane tasks such as sorting through mail and depositing Social Security checks, as well as more complex jobs like watching over retirement accounts and other investments, or filing tax returns. The agent doesn’t have to be a financial expert, just someone who is completely trustworthy and has a good dose of common sense. If necessary, the agent can hire professionals to help out with complicated tasks.

If Your Loved One Resists Your Help

If you think someone who needs help will resist your efforts, you need to carefully consider the way you approach the subject. This is what you need to know about how to get a power of attorney for elderly parents who are resistant to your help

Explain why powers of attorney are important. For some stubborn folks, it may be enough to explain why planning is important. Some people may be moved by a request to make powers of attorney because it will relieve anxiety and pressure for you and others who care about them, even if they don’t much care what happens or who makes decisions for them.

Others may be more inclined to make health care and financial documents if they understand that doing so is the best way for them to stay in control of their lives because whomever they name must follow their instructions in every way possible. (If they don’t name their own representatives in powers of attorney, a court may appoint someone to act without their input.)

Of course, when you talk with anyone who’s struggling with increasing frailty, you will have to tread gently around issues of deteriorating mental or physical abilities, perhaps underscoring that planning is a good thing for everybody to do, in case help is necessary someday.

Don’t force it. All that said, it’s just as important to remember that legally you can’t and of course, you shouldn’t force someone to follow a certain course just because you think it’s best. If you strong-arm or coerce someone into making powers of attorney and the documents are later challenged in court, you could find yourself in a lot of legal trouble. The same goes for faking signatures on any legal documents. Don’t do it. If your loved one doesn’t want to cooperate and you eventually have to ask a court for control over his or her affairs, that may be difficult, but it’s much better than being charged with fraud or forgery.

If It’s Too Late to Plan

If a family member is already incapacitated, you’ll need to ask a court to name a guardian or conservator to watch over his or her affairs. A court will usually name a spouse or other very close family member to this position, taking into account any evidence of what the incapacitated person would have wanted and other information about what’s in his or her best interest.

Things to Think About When Caring for an Elderly Parent

Thu, 19 Dec 2019 20:28:53 GMT

“Caregiving often calls us to lean into love we didn't know possible.”
-Tia Walker

It is essential to bring up a parent’s aging expectations and set goals together even though initial discussions may be uncomfortable. Often, an exploration into a parent’s future thoughts about health, finances, and residential plans can make the difference between reacting to a crisis or following an established plan that can bring both the parent and their children peace of mind. The sooner an identified caregiver begins a dialogue, the better the outcome for all involved.

It is common for an older parent to try and shield loved ones from some of their harsh realities – whether financial or health-related – because they are reluctant to accept help, embarrassed by their finances and don’t want to be a burden, or are hiding some critical health information. Even in the best of health circumstances an older parent’s ability to remain independent and manage their life can be challenging. Family caregivers are essential to the experience of aging in America and while individual care needs vary there are some general topics to address when helping an aging parent.

Safety issues are paramount. If there are assets and retirement plans in place, do not allow an aging parent to become financially vulnerable. In the most recent report released by the Department of Justice (DOJ) more than 2 million elderly Americans were defrauded out of more than 750 million dollars in one year. Get educated and learn systems that can protect parental assets. Physical safety must also be addressed to prevent accidental falls in the home. Technology can be adapted into the home to have environment lighting controls and other comforts that can keep a parent safer. Driving is also a topic that needs to be discussed. At what point is it best to remove a parent from behind the wheel to avoid unintended accidents that can be costly both financially and health-wise.

Activities of Daily Living (ADLs) and Instrumental Activities of Daily Living (IADLs) are the basic foundation of day to day functioning. IADLs include chores such as managing finances, transportation, home maintenance, shopping, and meal preparation. ADLs include eating, bathing, getting dressed, toileting, transferring and continence. The level of need in the described activities generally determines the sorts of care and housing arrangements a parent, caregiver, and family must consider.

Health and medical issues are pervasive as a parent ages. Many elder parents suffer from chronic conditions requiring medications, management, and monitoring. A caregiver may notice new health concerns that will need attention and routine visits to physicians to diagnose any new medical conditions. Dementia and other serious chronic illnesses can cause a parent to lose their ability to manage their health decisions or oversee their medical care. A medical power of attorney becomes necessary in the event a parent is no longer able to make sound decisions. All of these legal and financial issues that address health directives must be documented with the necessary legal paperwork. Legal designations such as a will, trust, and power of attorney are also essential to have in place. When the time becomes necessary, this documentation affords a designated power of attorney, and medical power of attorney the right to act on a parent’s behalf without the time-consuming need to address the courts for permission. Very often a caregiver is assigned these legal designations. Planning for a parent’s inevitable future decline, emergencies, and end of life care goes a long way to helping reduce stress, hassles and sometimes expense.

Housing issues are at the forefront of successful aging. Is a parent able to age in place, particularly with the aid of technologies that simplify their day to day living? If they are not, what sort of environment is best suited to their current needs? Do they need to move in with a family member or might they require assisted living? If so, is that financially viable? How does housing address the parent’s quality of life? Beyond the basic needs, a caregiver and family should want a parent to thrive, not just survive. It is essential to learn what matters most to the parent and what they would be willing to compromise on if the need arises. A parent’s desire for social connections, autonomy, dignity, and purpose must be considered to ensure a positive quality of life.

Finally, the management of family dynamics and relationships often brings many challenges and painful emotions to process. A caregiver deals with relationship stresses that can include physical exhaustion, financial depletion, and emotional burnout. A caregiver is only as useful to a parent as they are to themselves. While setting boundaries can be difficult, establishing frameworks that designate acceptable norms are healthy for all involved. A caregiver who puts their well being in jeopardy will also affect their ability to care for a parent. Some strategies for wellness in a caregiver’s life include: joining a support group, asking family members for help, learning to say no when needs outside established boundaries arise, and allotting time for themselves.

There is much to consider. Planning can become complicated as our emotions and relationships are involved when setting forth caregiving expectations and parent aging plans. Elder law attorneys help families navigate the aging process and plan for how to find and access appropriate care. Contact one today (preferably one that is Board Certified in Elder Law) and schedule an appointment to discuss how you can begin proper planning.

What is Estate Planning?

Tue, 03 Dec 2019 21:53:51 GMT

"By failing to prepare, you are preparing to fail."
-Benjamin Franklin

Estate planning is the process of planning for how your assets and estate will be distributed after your death or if you become incapacitated. Through estate planning, you can be certain that your assets will be protected, distributed to the correct people, and be subject to the minimum amount of taxes and costs on your estate. Even if you do not have a Ten-Million dollar estate, you should still contact a financial advisor or attorney to get a start on planning for your estate. Estate planning is something that you should get a head start on when you are younger. Most people think that this is something that you can wait on, but the sooner you start planning, the better your assets will be protected.

Estate planning is the series of preparing tasks that decide how your assets will be seperated and distributed once you pass or away or if you become incapacitated. Everything you own is apart of your estate, whether it's your car or your house or stocks or even your life insurance. Even things like joint accounts count as part of you estate too.

Estate planning entails far more than just creating a will. It may also include:

Assigning a power of attorney and healthcare proxy to make decisions on your behalf
Creating trusts
Establishing guardians for living dependents
Appointing or updating beneficiaries on life insurance plans and retirement accounts
Making funeral arrangement
Preparing for estate taxes, potentially by scheduling annual gifting

Whats you start your estate plan, make a list of all your assets, find the value of those assets, and then decided who you want to leave said assets to. After you have done that, you can begin the process of drawing up your trust.

Draw up your last will and testament. In it, you should name an executor, assign a legal guardian for any minor children and establish any necessary trusts.
Your will doesn’t account for everything. Now, you’ll need to review all your plans, accounts and shared assets to assign or update beneficiaries.
Assign a power of attorney and healthcare proxy to make financial and medical decisions on your behalf if you cannot.
Write a letter that includes any information that hasn’t been accounted for. This may include desired funeral arrangements or the bequest of sentimentally valuable assets.
Ensure that all documents are organized, properly notarized and stored someplace safe, like your attorney’s office or Safety Deposit Box. This includes a list of your digital assets and passwords.

Both a will and a Living Trust are estate planning documents that provide instructions on how your assets are to be distributed to your heirs. While both can achieve similar objectives, a trust gives you capabilities that a will does not. However, those extra options come at a higher price and often require greater effort to establish. You must also transfer assets into a trust for it to be beneficial, as a trust can only control assets that it contains.

One of the biggest benefits of a Revocable Living Trust over a will is that a trust allows you to avoid probate. For a will to be enforced, it must go through probate, which can be costly and makes your personal affairs a matter of public record. Another major advantage of a living trust as opposed to a will is that a trust makes it possible to plan for the possibility of your own incapacity, in addition to your death.

Ultimately, there’s a lot to weigh when considering the pros and cons of a will vs. a living trust. You can always opt for both, so a will can deal with any property not included in your trust. You should talk to an estate planning professional and do further research before making your decision.

Another big piece of the process is estate taxes. If you don’t plan accordingly, taxes can take a big bite out of your estate. Your assets can be taxed in two ways: estate taxes and inheritance taxes. With estate tax, the tax is taken out of the estate before it’s divided up and distributed to beneficiaries. Inheritance tax, on the other hand, is levied after the inheritance is distributed to beneficiaries. While estate tax is taken directly out of the estate, beneficiaries are responsible for paying inheritance tax.

Inheritance tax is only levied by states, but both the federal government and states may collect estate tax. As of 2018, the federal estate tax only applies to estates that are worth more than $11.2 million. Twelve states and the District of Columbia levy their own estate taxes, and it often only applies to estates over a certain value. Only six states still impose an inheritance tax: Iowa, Kentucky, Maryland, Nebraska, New Jersey and Pennsylvania.

There are steps you can take to mitigate estate tax so more of your assets go to your beneficiaries. For instance, you can gift portions of your estate to your family ahead of time instead of waiting until you die to give everything away. Other tactics include setting up an irrevocable life insurance trust making charitable donations, establishing a family limited partnership and funding a qualified personal residence trust.

Stanek, Becca. “Estate Planning: What It Is and What You Need to Know.” SmartAsset, SmartAsset, 19 July 2019, smartasset.com/retirement/estate-planning.

What is Probate?

Mon, 11 Nov 2019 20:25:22 GMT

What really is probate?

Probate is initiated by the estates executor or the attorney incharge of the estate. During the probate process, a probate court validates your will and then authorizes your executor to distribute your estate to your beneficiaries as you wish, as well as pay any taxes that you may owe on the estate.

If there is no will, a even lengthier administrative proceeding will be held to determine how your estate will be divided. If this happens, the court will name an administrator for your estate who will follow the probate judge’s instructions on how to distribute your property.

Why Should You Avoid Probate?

Although probate is often straightforward, many people want to avoid it. The reasons can vary, but there are some common complaints about the process:

It can be slow. In some cases, it can take years for a probate court to finalize an estate, especially if it’s complicated or involves a contested will.

It can be costly. Costs vary from state to state, but probate generally entails executor fees, attorney costs and other administrative expenses, such as appraiser’s fees. In some cases, these charges can accumulate quickly. The expenses are exacerbated if the process drags on for a while.

It is public. Since it is a state legal proceeding, what goes on in probate court does not stay there. All the material in the probate process goes into the public record

How Can You Avoid Probate?

Regardless of why you want to avoid probate, there are steps you can take to do just that.

Have a small estate. Most states set an exemption level for probate, offering at least an expedited process for what is deemed a small estate. In some cases, “small” actually can be quite large. Check your state’s probate estate limits.

Give away your assets while you’re alive. You might be able to get your estate to a simplified or exempt probate position by reducing its value while you are still here. Instead of leaving your assets to family and friends after you die, give them the items before then. Not only can this reduce the amount of your estate that goes through probate, it also might help trim or even eliminate future federal and state estate taxes.

Establish a living trust. Trusts are appealing when it comes to avoiding probate because property held in trust is not part of your estate upon your death. The reason? A trustee, not you, controls the trust property, and is obligated to distribute it under the terms of the trust agreement.

Make accounts payable on death. Bank and other accounts that are payable on death go directly to your designated beneficiary without going through probate. Some states also allow such transfers of real estate.

Own property jointly. Making your spouse or someone else a joint owner facilitates the transfer of the asset without the need for probate. Some ways to hold such assets include joint tenancy with right of survivorship, tenancy by the entirety and community property with right of survivorship.

How to Apply for Medicaid

Tue, 05 Nov 2019 20:56:17 GMT

Do you qualify for Florida Medicaid?

To qualify for federal funding, state Medicaid programs are required to cover certain populations, such as low-income children and pregnant women. States can also choose to cover optional coverage groups, like low-income adults without dependents.

Each state sets its own income limits for qualification, based on minimum levels set by the federal government. Florida has set below-average limits for the mandatory coverage groups, and since the state has not accepted federal funding to expand Medicaid, the eligibility rules have not changed with the implementation of the ACA. Able-bodied, non-elderly adults who don’t have dependents are not eligible for Medicaid in Florida, regardless of how low their income is.

Florida’s eligibility standards as of April 2018 are:

Children up to 1 year old: 206 percent of the federal poverty level (FPL)

Children ages 1-5: 140 percent of FPL

Children ages 6-18: 133 percent of FPL

Pregnant women: 191 percent of FPL

Young adults, ages 19 and 20: 29 percent of FPL

Adults with dependent children: 29 percent of FPL

People who qualify for Supplemental Security Income (SSI) automatically qualify for Medicaid in Florida. See more information in the SSI-Related Programs Financial Eligibility Standards.

How do you sign up for Medicaid?

If you’re eligible for Medicaid, you can enroll at Healthcare.gov.

You can also apply online at ACCESS Florida, or fill out a paper form. Use this application for low-income children, pregnant women, families, and aged or disabled individuals who are not currently receiving Supplemental Security Income (SSI).

Use this application to apply for food or cash assistance in addition to Medicaid. You should also use this form if you currently receive SSI or if you are applying for home-based and community services, hospice care, or nursing home care.

Paper applications can be submitted by mail, fax or in person to a local service center.

For help with the application process, call 1-866-762-2237.

Source: https://www.healthinsurance.org/florida-medicaid/

Home Care for the Elderly: What is it?

Thu, 24 Oct 2019 18:18:36 GMT

“To care for those who once cared for us is one of the highest honors.”

Home care for the elderly. What exactly is it?

Home care for the elderly, or HCE is a program put in place by the florida government to help care for the elderly population in a different manner than traditional nursing homes. The HCE is a program that supports care for Floridians of the age of 60 and older in family type living arrangements within private homes.

A basic subsidy averaging $106 per month is given to all program participants. Special subsidies are authorized for some consumers. These subsidies are used for: Incontinence supplies, Medications, Medical Supplies, Wheelchairs, Assistive Devices, Ramps and home accessibility Modifications, Nutritional Supplements, Home health Aide, Home Nursing, and other services to help maintain the individual in their home.

The Department is responsible for planning, monitoring, training, and technical assistance for the program. Unit rate contracts are established by Area Agencies on Aging for local administration of the program within each Planning and Service Area. Services include more than 150,000 subsidy checks issued annually.

To be considered eligible, individuals must be age 60 or older, have income less than the Institutional Care Program (ICP) standard, meet the ICP asset limitation, be at risk of nursing home placement, and have an approved adult caregiver living with them who is willing and able to provide care or help arrange for care.

Florida Bankruptcy

Wed, 02 Oct 2019 20:26:51 GMT

Filing for bankruptcy can help you take control of your financial life. But finding the information you need to get your Florida bankruptcy case started can be confusing.

In this blog post, you’ll learn how to find much of the information you’ll need, including:

lists of property you can exempt
official bankruptcy forms
income-qualifying (means testing) data
credit counseling providers
your local Florida bankruptcy court.

Something people always wonder is “Will I lose everything?” which in reality, you might not lose anything! In chapter 7 bankruptcy the trustee appointed to your case will sell off your property to the benefit of the creditors, while in chapter 13 bankruptcy You must pay the nonexempt property value to your creditors through the three- to five-year Chapter 13 repayment plan.

Here are some commonly used Florida property exemptions (spouses filing together can double the amount on any property owned together, except the homestead exemption).

Florida Homestead Exemption. Filers can protect an unlimited amount of equity in a residential home. larger than half an acre in a municipality or 160 acres elsewhere. (Florida Statutes Annotated § 222.01-02.)
Florida Motor Vehicle Exemption. A debtor can use this exemption to protect up to $1,000 in one motor vehicle. (Florida Statutes Annotated § 222.25(1).)
Florida Wildcard Exemption. Filers who don’t use the homestead exemption can protect any property of their choice valued up to $4,000. (Florida Statutes Annotated § 222.25(4).)

Official bankruptcy forms. Before the Florida bankruptcy court wipes out qualifying debt, you must disclose all aspects of your financial situation—income, expenses, property, debt, and property transactions—on official bankruptcy forms. These forms are free. After filling out the bankruptcy forms online on the U.S. Bankruptcy Court forms web page, you’ll file your paperwork in your local bankruptcy court (more below) along with a filing fee or fee waiver. Bankruptcy filing fees or fee waiver. You’ll pay a filing fee when you file your paperwork with the court unless you qualify for a fee waiver. Bankruptcy lawyer fees. The cost to hire a lawyer varies depending on the area.

The Difference Between Dissolution and Divorce

Wed, 25 Sep 2019 20:00:22 GMT

What Even is a Dissolution?

Whether you get a dissolution or a divorce, the product is the same. The differences between the two are usually what happens before the marriage is officially ended. A dissolution is when you legally end your marriage with you spouse without having to go to trial. A dissolution may be used when a husband or wife is filing for a dissolution of marriage, and the husband and wife have marital assets and/or marital liabilities but they do not have any dependent children, nor is the wife now pregnant. You and/or your spouse must have lived in Florida for at least 6 months before filing for a dissolution in Florida.

If you and your spouse agree on all issues and both can attend the hearing, you may want to file a simplified dissolution of marriage petition, Florida Family Law Rules of Procedure Form 12.901(a). However, you cannot file for a simplified dissolution of marriage if any of the following are true:

You disagree about property, debts, or other matters and wish to have a judge settle them for you. Either you or your spouse is seeking support (alimony).
You would like to ask questions and get documents concerning your spouse’s income, expenses, assets, debts, or other matters before having a trial or settlement.
You would like to reserve your rights to have any matters reconsidered or appeal the judge’s decision.

A dissolution of marriage process may eliminate much of the divorce process and expense. Unlike a divorce, fault grounds are not at issue. Dissolution is often thought of as no-fault divorce.

A dissolution petition is not filed with the court until the parties have reached an agreement on all the issues that must be addressed in a divorce matter. Designation of a residential parent, parental rights, visitation, child support, spousal support, division of property, payment of debts, and payment of attorney fees must be considered in either case.

While the parties are negotiating, there is no subpoena power available, so the parties must voluntarily trade information. Professionals can, however, be hired to evaluate property, etc.

When an agreement is reached and filed with the court, a hearing must take place within 30 to 90 days. Both parties must appear and testify that they are satisfied with the agreement; that they have made full disclosure of all assets and liabilities; that they have voluntarily signed the agreement; and that they both want the marriage dissolved. The court must also approve the parties' agreement.

Because there is no court involvement until an agreement is reached, all the temporary orders and possible hearings that might occur in a divorce case are avoided. The end result of both a divorce and a dissolution of marriage is the same: the marriage is terminated.

Naming Your Trust as an IRA Beneficiary: A Do or a Don’t?

Tue, 17 Sep 2019 20:30:40 GMT

Most people choose to name their spouse, children, and/or grandchildren as beneficiaries on their POD (pay-on-death) accounts; this isn’t necessarily a bad decision. As the spouse, you have the ability to roll your deceased spouse’s IRA funds into your own IRA or wait to receive the funds. As the child or grandchild, you could receive the money outright.

Consider this: Naming your trust as an IRA beneficiary allows you to control the post-death benefits that the intended beneficiaries would receive; this is especially important for beneficiaries who may not be able to handle a large inheritance.

Below are a couple scenarios to consider for naming your trust as a beneficiary:

Minor is a beneficiary;

Beneficiary is unable to handle monetary responsibility;

First, if a minor is a beneficiary on your POD accounts, the probate court is likely to appoint a guardian, if you have not already done so. This means you will have to go through the lengthy and expensive Guardianship process.

Second, picture this: Leaving $100,000 to an 18-year-old, or even a 21-year-old. I imagine, you just made some sort of face, and I wouldn’t blame you. While I would have considered myself a responsible 18 or 21-year-old, I cannot attest that if I were given that much money in a lump sum I wouldn’t have made some real dumb decisions. By leaving the trust as the beneficiary, you can control how and when this money is distributed to that 18 or 21-year-old, planning not only for your future but for their future as well.

Additionally, if one of the listed beneficiaries is not physically or mentally capable of managing funds, regardless of their age, naming your trust as the beneficiary may be the smart choice, as your successor-trustee will be responsible for distribution and you can include language delegating how they are left their inheritance.

Recently, there was an article in the Tampa Bay Times discussing when it makes sense to name a trust as an IRA beneficiary. While it was a helpful article, what the article didn’t stress enough is: that THERE MUST BE SPECIAL LANGUAGE IN THE TRUST TO AVOID ADVERSE TAX CONSEQUENCES. Merely placing your Trust as the beneficiary does not avoid adverse tax consequences. Please consult an attorney before making this change to your accounts to decide which option fits your needs and to make sure that your trust includes this special language, if necessary.

Risks of Listing Joint Owners on Your Accounts

Tue, 17 Sep 2019 20:19:26 GMT

“Sometimes convenience comes at a high price.” –Unknown

Nowadays, it is common for someone to “add” another individual (their child, caregiver, sibling, or trusted friend) to his/her bank account for a matter of convenience. Most people name an individual on their bank accounts as joint holders so that if they were to become incapacitated, that person would still have access to their liquid assets to pay their bills and manage their affairs. While, this idea falls into my previous blog about planning for the future, this specific route puts you, and the joint holder, at risk.

The obvious risk here is that sometimes, people make bad decisions because of the circumstances that they have fallen into; good people may result to taking a little here and a little there out of your account. Another risk, subjecting yourself to another person’s creditors, can be best explained through the example below:

Let’s say that Mom has a daughter named Susan. Mom is around 60 and decides that since Susan is well-versed in finances, trustworthy, and is a responsible adult, she will add her to her bank accounts so that Susan can take care of her and access her money if she needs to. So far, this sounds like a plan. But, what Mom doesn’t realize is that by doing this, she is putting herself AND her daughter at risk to an attack by creditors and family conflicts.

Both holders are owners of the assets; this is called a joint-tenancy. Let me explain: By being a joint holder of an account, for purpose of creditors, all of the money in that account is viewed as yours. So, on one hand, all of the money is Mom’s and on the other hand all of the money is Susan’s.

Susan, who hasn’t contributed a penny to Mom’s bank account is actually entitled, as a joint holder, to the entire balance. Mom and Susan have a close mother and daughter relationship, so Mom isn’t worried about Susan’s access to the funds; of course Susan won’t steal from her Mom.

But here’s the creditor risk: Let’s say Susan, the daughter, is in an at-fault car accident and the other driver sues her, personally, for pain and suffering. Mom’s account, and the balance of this account, is now subject to the lawsuit as one of Susan’s assets because Susan is a joint-account holder.

Likewise, if Susan is married and enters into a divorce, this account may be subject to the divorce litigation. All of this causes unnecessary stress, litigation, and, of course, expense.

A third risk involves distribution of assets once you pass-away. What you may not have considered is that, while you have diligently planned out how your assets will be split among beneficiaries, the joint-holder of the account may have a right of survivorship to the joint account once you pass away. This means, that the funds in the account that you previously shared are not split among the other beneficiaries, which can create a point of contention and litigation issues among family members.

So, how do we minimize risk while still giving a person the legal right to act on your behalf? Well, there are several ways to lessen your risk:

Create a:

Revocable Living Trust;

Power of Attorney; and/or

Durable Power of Attorney

Creating a Power of attorney, whether a regular Power of Attorney or Durable Power of Attorney, is another estate planning tool that you should have in your tool belt when planning for your future. If Mom creates a Durable Power of Attorney, listing Susan, then Susan will have access to Mom’s accounts should Mom become incapacitated. Susan will be in the exact position that Mom initially intended for her to be – she can use the assets to manage Mom’s affairs and take care of her mother.

Risks involved in naming an individual as a joint holder on your account involve theft, creditor action, divorce actions, and family feuds. Consulting an attorney on the best alternative to a joint-account holder is smartest way to execute your desires while maintaining a sound interest in your assets.

Mistakes of the Rich and Famous: Michael Jackson

Tue, 17 Sep 2019 20:09:10 GMT

Michael Jackson. Mistake: Failed to Fund his Trust.

Planning for the future of your loved ones through the creation of a Trust is ideal. However, after the creation of the Trust, the job isn’t over. You must fund the trust (place your assets into the name of the trust.)

Michael Jackson understood the importance of planning for the future of his children. He created a Trust in 1995, amended in 2002, to protect his massive estate for the benefit of his three children and mother. He obviously thought about the future, understanding that young adults are not necessarily capable of handling mass amounts of money; he outlined that chis children would receive specific amounts at ages 21, 20, 35, and 40.

However, he failed to fund the Trust. “Funding the trust” is the process of transferring your assets from you to your trust. In order to fund the Trust, you must physically change the titles of your assets from your individual name, or if married, your joint names, into the name of the Trust.[1] For example, you need to inform the Bank that you have created a Trust and change the name of your checking and savings accounts to the name of the trust so that they avoid probate. In Mr. Jackson’s case, he left his entire estate out of the Trust. Therefore, all of his assets, including the Neverland Ranch, had to proceed through probate.

When used and funded properly, a Trust keeps your affairs private and out of court. Funding a trust is an ongoing process; every time you acquire a new asset, it should be placed into the Trust’s name. The result of an unfunded Trust or an asset not in the Trust is probate. Unfortunately, Mr. Jackson’s three children, and their guardian were unable to access his funds as instructed in his Trust. Instead, the presiding Judge dictated the amounts they were allowed to receive over the lengthy court process.

Unfortunately, Mr. Jackson, who took steps to protect his assets, preparing a future for his children, didn’t complete the final step in creating a trust: funding the trust. As demonstrated above, this is one of the most important pieces to planning for your future and the future of your loved ones. Don’t make the mistake that Michael Jackson made when he created his Estate Plan. Consult an attorney to set up a Trust and to make sure that your Trust has been funded properly.

[1] https://www.estateplanning.com/Understanding-Funding-Your-Living-Trust/

Mistakes of the Rich and Famous: Aretha Franklin

Tue, 17 Sep 2019 20:03:41 GMT

Aretha Franklin. Mistake: Not creating an Estate Plan; probate and disabled descendant.

One of the biggest problems that we face in everyday life, when it comes to estate planning, is that we are so busy; often we never stop to consider what will happen if we keep putting off our planning for another day. A 2017 survey by Caring.com indicated that only 4 out of every 10 adults have a Will or a Trust.

Aretha Franklin, the singer who became famous with hits such as “Respect,” “A Natural Woman,” and “I Say a Little Prayer,” delayed making any plans for the future of her estate. Ms. Franklin died on August 16, 2018, intestate (without a will). One might think that with the publicity surrounding the death of Prince and his lack of estate planning, his peers would be encouraged to plan. However, Ms. Franklin was advised several times by her long-time attorney to create an estate plan, but it was “just something that she never got around to.”

Ms. Franklin died unwed and with four children, one of whom is disabled. This requires her estate to be subjected to the intestate succession laws of Michigan (the state where she died). Michigan laws would leave the estate equally to her four children. Now, while many of you may think that this is likely what she would have wanted, consider this: her estate is now subjected to probate, removing a substantial amount of money from the estate to cover the probate process and attorney’s fees. Plus, she has one disabled son, and this inheritance will likely negatively affect him – conflicting with government benefits he receives; all of this could have been prevented had she planned ahead.

Ms. Franklin should have prepared a Trust, instructing how she wanted her assets distributed. To follow the thinking that she wanted her estate distributed equally among all of her children, she could have created a “Qualified Special Needs Trust,” which would have provided financial management for her disabled son. Creating this type of trust would have ensured his continued eligibility for any means-tested government benefits or state waiver programs which provide housing, socialization, workforce training, and other benefits to disabled persons. However, because Ms. Franklin didn’t create this Trust, the costs of his specialized care could exhaust his inheritance.

The financial damage that can be caused by a lack of Estate Planning Documents can be significant – and for those of us with a more modest estate, the damage can be more severe. It is extremely important for you to plan for the end of life, because if you don’t, someone else will dictate how and when your assets are distributed. Consult an attorney in the creation of a Will or Trust to protect not only yourself, but your family.

Condominium Law: Cautions When Purchasing

Tue, 27 Aug 2019 18:18:24 GMT

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.” -Theodore Roosevelt

In Florida, Condominiums are common among all age groups, but most people aren't aware of the cautions they should take prior to purchasing their condominium. One of the most important elements in the decision to purchase a condominium is through the study of the prospectus (a fancy legal term for a printed document that describes the property).

The prospectus gives the vital information about the terms of sale, description of the property, and legal documents about the property. It will advise you of a potential roof or termite problem and gives dates of recent repairs to such items. It will document and list all pertinent information concerning the condominium and the associated risks along with maintenance costs.

The prospectus is required, by law, to be given to the potential buyer. Buyer beware: you will probably be asked to sign a document saying that you received the prospectus; like any document, don't sign until you have received and reviewed the prospectus.

Maintenance Costs. No one likes that phrase. The prospectus should be be extremely helpful in your decision to purchase your condominium unit. The age of the building and the equipment are important here because buyers who have to replace an elevator or roof could be caught short. Low maintenance fees could be a warning of potential traps for unsuspected buyers.

Other areas to watch out for when deciding whether to purchase are rules governing living arrangements and pets, information on the background of the developer and other persons involved in the project, and the guarantees that are being offered with the sale of the property.

NOTE: 55+ communities can be beneficial; they may be quiet and surround the residents with people of like age, providing an active community. However, the units may be more difficult to sell considering the age restriction or other restrictions, for example the visitation of grandchildren and how long they can stay.

In the areas of financing for the purchase of a condominium, you should always make your condominium purchase contingent upon financing if you are unsure of loan availability. The balance due at closing and the amount of down payment should be closely scrutinized and discussed with your attorney.

ALWAYS schedule a walk-through prior to closing as you would in any real estate closing. Do this before you sign the contract closing the transaction.

Minor cautions, but important issues to consider in condominium purchasing are parking privileges, outdoor cooking privileges, and definitions of your interest in common areas of the condominium.

One of the most important documents in condominium purchasing is the prospectus. Often, it is several hundred pages long, and thus undesirable to read. However, it should be read with deep scrutiny. Consult your attorney, who can review the prospectus for you, and analyze any potential problems that may arise.

Special Needs Trust: What are They, and How They Can Help

Thu, 25 Jul 2019 19:52:57 GMT

I praise you because I am fearfully and wonderfully made.
Psalm 139:14

The amount of people with intellectual or physical disabilities in the United States is approximately 12.8% of the United States entire population. Many people wonder What is going to happen to their child when they are no longer there to take care of them. This is a problem that can usually be settled with a Special Needs Trust.

Special Needs Trusts are used to make sure that your child or other family member who will need special care will be taken care of thoroughly. The special needs trust is a way to make sure that your family member will still get the care they need. A SNT is a legal arrangement where a person or financial institution will become the trustee and will manage the funds for the person in need, also known as the beneficiary. The trustee’s job is to make sure that the beneficiary is well taken care of and comfortable in his/her life.

How is the SNT funded? Let’s say that Robert has a son, Jack, who has a developmental disorder. Robert passes away without doing any planning, so Jack ends up inheriting $500,000. Jack qualifies for a SNT because he is under the age of 65, and has a disability according to the SSA. The trust must be established by his trustee and the inheritance that Jack received can be transferred to the trust. Jack will remain eligible for SSI and MA if the trustee distributes the funds for the sole benefit of the beneficiary. Once Jack passes, all the leftover funds from the SNT will be used to pay back the state for all of Jack’s medicaid cost paid on the behalf of Jack over the years.

What can the trustee use the fund in the SNT to buy for the beneficiary? The guidelines for what can and cannot be purchased. The bottom line for a SNT is that the trustee’s job is make sure that the beneficiary lives a happy life and is provided for and comfortable in how they live.

The Special Needs Alliance is a national non-profit comprised of attorneys who assist individuals with special needs, their families and the professionals who serve them. For more information on Special Needs Trust, please contact the SNA, or Attorney Joseph Pippen at (727) 586-3306

Letters of Instruction: Making Death Easier on Your Family

Thu, 25 Jul 2019 19:33:04 GMT

“You never really leave a place or person you love, part of them you take with you, leaving a part of yourself behind.” -unknown.

Creating an estate plan, whether through will or trust, is the way to plan for your future and the future of your loved ones. Your death will be extremely difficult on your family and friends and they will look for guidance, trying to determine what to do next. Assuming that your will and/or trust are in order and you have properly planned to eliminate or reduce estate taxes, a “Letter of Instructions” kept with your will and/or trust will be extremely helpful.

The letter should cover the following:

The location of your important papers, including where the original will and/or trust may be kept.

An explanation of the assets and how they are used for the surviving spouse.

A listing of names, addresses, and telephone numbers for reference, including accountant, attorney, broker, banks, relatives, and friends.

As much information as possible about bank accounts, CD’s, checking accounts, safe deposit boxes, business affairs, and other contracts.

A list of life insurance policies and company pension benefits and who to contact concerning these.

The location of separation or divorce agreement as well as birth certificates, adoption information and the like.

The location of income, gift, and other tax returns, and any information necessary regarding tax returns and forms to be filed.

A list of credit cards and all other credit arrangements so that such arrangements can be immediately cancelled or changed.

Instructions as to club memberships, dues paid annually, and to whom club files and records should be returned.

List of the addresses and telephone numbers of all of the beneficiaries.

Many Florida wills authorize a “separate writing.” A separate writing is an itemized list of personal effects such as clothing, collectibles, jewelry, furniture, guns etc., which you desire to be passed to a particular person.

Separate writing sheets can be utilized to give all of a collection to a specific person, or to split the collection among several different people (e.g. your children). This is a good way to effectively pass your family heirlooms down the family line.

Be specific when filing out these separate writing sheets. Emotions are heightened at the time of one’s passing, so, great care should be taken to avoid conflict, disagreements and disputes at the time of death. Often controversy begins over very small items, and then the beneficiaries find they cannot agree on anything.

Wills, trusts, letters of instruction, and separate writing sheets should be reviewed at least every two years and sometimes annually depending on the circumstances. Tax laws change, and anyone with a will or trust that refers to a prior tax act should have their documents reviewed. Consult your local attorney to make sure that your documents and separate writing sheets are valid.

Medicaid: Proper Planning to Qualify

Thu, 25 Jul 2019 19:28:53 GMT

Medicaid, a federal program, is managed by state agencies. In Florida, The Florida Department of Children and Families (DCF), The Agency for Healthcare Administration (AHCA), and The Florida Department of Elder Affairs (DOEA) are responsible for handling Medicaid.

Often, individuals find that qualifying for Medicaid assistance can be difficult because of Medicaid’s strict asset and income limitations. However, with proper planning, even individuals whose assets and income greatly exceed the limits for Medicaid can qualify for benefits.

Applicants must meet all requirements of the following tests to qualify for Medicaid in Florida:

The Medical Test

The Asset Test

The Income Test

The Medical Test helps the State of Florida determine whether a nursing home resident, or an assisted living resident, qualifies medically for Medicaid assistance. Note: A person who resides in a nursing home or assisted living facility does not automatically qualify. Medicaid assistance is for the applicant who has an actual need to be in a nursing home or assisted living facility. The DOEA determines if the individual qualifies for the medical need.

A person would most likely qualify for medical need if they are unable to do any of the following on their own – without assistance.

Bathe

Eat

Dress and undress

Move around

Get into and out of bed

Use the toilet

The second test, the Asset Test, evaluates your “countable” and “non-countable” assets. First, understand that the term “assets” covers everything of real value that a person owns (e.g. a home, cars, money). A countable asset is one that counts toward the asset limit and a non-countable asset is one that does not count toward the asset limit.

Under current law, a single Medicaid applicant is allowed no more than $2,058 in countable assets. If both spouses are applying for Medicaid, then countable assets may not exceed $3,090. If the applicant is married, the applicant’s community spouse (spouse not applying for Medicaid) is allowed to have up to $123,600 in countable assets.

The following are currently considered primary non-countable assets:

One home in Florida with a value up to $572,000. The home can be a traditional house, condominium, or mobile home.

One car although multiple cars can be exempt if the other cars are seven years old (or older) and are not luxury vehicles.

Household items, furnishings, and personal effects.

Clothing

An irrevocable funeral service contract or cremation contract.

One burial plot for each spouse

Life insurance with no cash value.

The third and final test is the Income Test. The following items are considered income by the State of Florida:

Social Security Payments

Pensions

Interest

Dividends

Annuity Payments

Rent

Florida has an income limit, referred to as an “income cap.” The income cap limit is tied to the Federal Supplemental Security Income (SSI) monthly benefit for the year. In October 2018, the SSI benefit level was $750.00. The income cap limit is 300% of the SSI benefit level. Currently, the Medicaid income cap is $2,250 in gross (prior to taxes or deductions) monthly income. Anything in excess of that amount, even if it is just a penny, will cause the applicant to fail this portion of the test. Elder law attorneys can assist in structuring your assets so that you may qualify for Medicaid. One way, would be creating a Qualified Income Trust (an irrevocable trust), also known as an “Income-Only Trust.” Creating one of these trusts requires compliance with both federal and state laws.

Meeting with an attorney to plan for Medicaid may help you deal with issues like owning a second home or having countable assets/income in excess of the allotted amounts. This blog post is intended to give a general overview of the Medicaid qualification process; each test has its own intricacies. It is best to consult an attorney who practices elder law to see how you can structure your assets so that you qualify for Medicaid.

Rights of a Surviving Spouse

Thu, 25 Jul 2019 19:18:00 GMT

“The more you invest in a marriage, the more valuable it becomes.” -Amy Grant

Probate can occur if a person dies with or without a will. The smartest way to avoid probate is to set up a Trust. Under Florida Law, spouses are entitled to certain shares of the deceased spouse’s estate if that estate goes through probate. This may be of particular importance to you, especially is this marriage is not your first marriage and you have children from a prior marriage, regardless of if you are the decedent or surviving spouse.

Under Florida Law (Fla. Stat, 732.102), if a spouse dies without a will (intestate), a surviving spouse may be entitled to either the entire estate or half of the estate, depending on the shared descendants (e.g. children). The shares of the estate are as follows:

If all descendants (children) of both spouses are shared between said spouses, the surviving spouse will obtain the entire estate;

If one or more of the surviving descendants is not a lineal descendant of the surviving spouse, the surviving spouse is entitled to one-half of the estate;

In this situation, think step-children.

If there are one or more children of the deceased spouse, all of whom are shared by the surviving spouse, and the surviving spouse has one or more children who are not descendants of the deceased spouse, the surviving spouse is entitled to one-half of the estate.

Real property is also subject to the Florida Probate Code. Keep in mind, that while Florida Statute outline the shares that the spouse will take, there are still probate fees involved based on the entire value of the probate estate.

If a person (testator) marries AFTER making a will, and the spouse survives the testator, the surviving spouse is entitled to what they would have received if there had been no will, unless:

There was a prenuptial or postnuptial agreement;

(can create a release of spousal rights to the homestead or other assets)

The surviving spouse is provided for in the will; or

The will specifically outline that the surviving spouse has been intentionally left out.

To touch briefly on this topic, Florida also allows spouses to take an elective share, which makes it nearly impossible to disinherit a spouse from an estate (unless there is a pre- or post-nuptial agreement.) The elective share is permitted EVEN IF the estate does NOT go through probate. The elective share is an amount equal to 30% of the elective estate, which is comprised of the deceased spouse’s assets. These assets include the probate estate, life insurance policies, pay-on-death accounts, and revocable Trusts. Opting for an elective share must be done within 6 months of receiving notice of administration of the estate or within 2 years of the decedent’s death.

While Florida probate laws are much more complex and extensive than outlined above, the above summary gives insight into what a surviving spouse may be entitled. Consult a local attorney to understand your options and create a plan that will distribute your assets as you intend.

Naming Your Trust as an IRA Beneficiary: A Do or a Don’t?

Thu, 25 Jul 2019 19:14:00 GMT

This is a subtitle for your new post

Below are a couple scenarios to consider for naming your trust as a beneficiary:

Minor is a beneficiary;

Beneficiary is unable to handle monetary responsibility;

Power of Attorney v. Durable Power of Attorney: Making the Right Decision

Thu, 25 Jul 2019 19:09:40 GMT

“To care for those who once cared for us is one of the highest honors.” – Tia Walker

Creating a Power of Attorney means that you are creating a legal document that gives another person the authority to act in your legal capacity to manage your affairs, including financial transactions.

There are two types of Power of Attorney documents that you can have in your estate planning tool belt;

The (regular) Power of Attorney; and

The Durable Power of Attorney.

The main difference between the two lies in the time that the agent’s powers terminate; the agent (also known as attorney-in-fact) is the person that you have assigned to be your power of attorney.

It is a common misconception that once you pass-away, the individual that you have elected to act as your power of attorney (whether regular or durable) still holds the authority to manage your affairs. Under Florida law, upon death or incapacitation, the agent no longer holds any power. This leaves the Personal Representative (will), the Successor Trustee (trust), or the courts to determine who is to disburse or manage yours funds.

Florida statute 709.2109 dictates that a power of attorney terminates when the principal (the creator of the power of attorney) becomes incapacitated or dies. The difference, in Florida, between the (regular) Power of Attorney and the Durable Power of Attorney is also prescribed by Florida’s statutes. A person holding the regular Power of Attorney loses their given powers when you become incapacitated. Whereas, a Durable Power of Attorney is still valid if you, the principal, were to become incapacitated.

Holding a Durable Power of Attorney allows you to give the authority to another individual to continue to manage your affairs and continue to take care of you if you are still living but unable to do so. However, if you were to become incapacitated at some point and only created the regular Power of Attorney, the person you elected to become the Power of Attorney would be unable to act, causing Guardianship proceedings to begin.

NOTE — In this blog, the term “incapacitated” references a person’s inability to care for themselves; this could be, for example: the inability to remember to take certain medications, maintain regular hygiene, or properly manage finances.

Guardianship proceedings go through the regular court process, meaning that it is time consuming and costly. In this proceeding, the court will appoint an individual to care for you, should you be declared incapacitated. This process can be avoided by creating a Durable Power of Attorney. By creating a Durable Power of Attorney, the powers that you grant your agent (“the attorney-in-fact”) are effective upon execution of the document.

Advantages to Durable Power of Attorney:

No guardianship proceedings;

Protects against costly court proceedings;

Provides the ability to choose who will make the decisions for you;

The agent can step into your shoes and make important financial decisions.

Don’t be overwhelmed with the fact that you are granting legal powers to another individual. There are two different kinds of powers that can be granted; specific and general. Consult with your attorney to decide which powers, and type of document, best suit your needs.

For those of you reading that have already executed these documents – job well done! In 2011, Florida enacted changes to the Power of Attorney Act. Remember, it is a good idea to have your attorney re-examine these documents about every 3-5 years as Florida laws and statutes change.

Avoiding Probate: The Ugly, Time Consuming, and Expensive Process

Thu, 25 Jul 2019 19:00:21 GMT

“Death is not the end. There remains the litigation over the estate.” – Ambrose Bierce

Probate is a court-supervised legal process that occurs after you die if your assets are left solely in your name. Typically, this occurs when you die either with or without a will. The probate process is time consuming, expensive, and court-ordered, in order to sort out the inheritance (assets minus bills/creditors and taxes) that the deceased person (decedent) has left behind to their beneficiaries. Additionally, if you have passed-away without a will, the probate court will follow Florida Statutes to determine who receives your remaining assets.

Examples of assets often caught in the cross fires are:[1]

Bank accounts or investment accounts in the sole name of the decedent;

Life insurance policies, annuity contract, or individual retirement accounts payable to the decedent’s estate;

Real estate titled in the sole name of the decedent, or in the name of the decedent and another person as tenants-in-common.

Now, at this point you may be saying to yourself, “Wait a minute, I made a will and named a personal representative to handle the distribution to my beneficiaries.” You would be correct in saying and thinking this. The common misconception, however, is that because you have created a will, your estate will avoid probate and your loved ones will receive their distribution immediately. This is inaccurate. A will is ineffective to pass ownership of probate assets without going through the process of probate. So, your named beneficiaries will still inherit what you have left behind, minus all of the costs of the probate process, personal representative fees, and attorney fees.

Florida Statute 733.6171 outlines the amount of compensation that attorneys are entitled to when handling a probate estate. Remember, this is ONLY attorney fees and does not include the personal representative’s fee or court costs. Currently, for an estate having a value of $40,000 or less , the starting fee is $1,500. Once the estate’s value is in excess of $100,000, fees are determined by a percentage of the estate.

The duration of the probate process depends on the estate itself. According to the Florida Bar, “even the simplest probate estate must be open for at least the three-month creditor claim period.”

Generally, life insurance proceeds, retirement accounts and funds held in a payable-on-death (POD) account do not go through probate so long as there are listed beneficiaries on these accounts.

Creating a Living Trust can avoid probate. By placing your assets into the Trust (often called funding the trust), the names of the asset change from the name of the individual to the name of the Living Trust. Now, don’t be startled. This has no effect on how you own your assets. They are still 100% yours to use freely and do as you wish. When you pass-away, however, the assets will not be titled in your name and thus will not have to go through the probate process to re-title them into someone else’s name. Instead they are in the name of the Trust and pass freely to your named beneficiaries.

Creating an estate plan, or neglecting to create a plan at all, that causes your assets to pass through probate creates a variety of issues:

Beneficiaries must wait to collect;

Money is taken from your estate by the courts, personal representative, and attorneys handling the case;

Make strategic decisions. Plan not only for your future but the future of your loved ones. Consult an attorney to decide what options you have to avoid probate.

[1] http://www.flcourts.org/resources-and-services/family-courts/family-law-self-help-information/probate.stml

Planning For the Future

Thu, 25 Jul 2019 18:52:26 GMT

“The future is already here – it’s just not evenly distributed.” – William Gibson

Planning for the future may sound like a daunting task. Often, people are overwhelmed looking at finances, thinking about death, and trying to determine who will assist them if they need help. If this is you, you are not alone. However, creating an estate plan isn’t necessarily as complicated as it sounds and it will save you, and your loved ones, from future headaches.

Estate plans are NOT just for the elderly or the wealthy. The reality is that estate planning, whether a simple or complex plan, is a must for everyone. We can’t control all of life’s events; accidents, illnesses, and major life events happen. What you can control is how the assets that you have worked so hard to accumulate will be used and, later on, distributed. Creating a comprehensive life-plan, an estate plan, ensures that your estate is protected during your lifetime and properly distributed at your death, all while protecting you personally as you age.

A properly executed estate plan can protect your money and assets, plan for long-term care, incapacity and end-of-life concerns, and proactively help you control what will happen to you and your assets.

At this point you may be wondering, what is an estate plan? Simply put, they are legal documents designating your wishes for the future. Estate plans may consist of a:

Trust;

Will;

Powers of Attorney;

Durable Powers of Attorney;

Guardianship;

Health Care Surrogate; and

Living Will.

Depending on the size of your estate, type of assets, and personal preferences/situations, you may find yourself with all or some of these documents.

If I were writing to my mother or grandmother, I would tell them to go see an attorney. I wouldn’t want them to be in a position where they were incapacitated and had to wait for the court system to determine who could act on their behalf, nor would I want to watch my mother go through the painful, expensive, and time consuming probate process should my grandmother pass. As a parent, with minor children, it is also imperative to plan out guardianship; if something were to happen to you while your children were minors, you have already designated who, in your opinion, is the best fit to take care of your children.

While there are websites that offer estate planning documents for a small fee, these documents are not sculpted to individual needs. Rather, these websites use cookie-cutter forms and provide a false sense of security.

Everyone makes mistakes – unfortunately, this includes attorneys. However, relying on a fillable-form website, without being able to express your needs, needs that you may not even realize you have, greatly increases the chances for mistakes. The same is true for trying to write a will yourself; if the documents do not follow the strict Florida Statutes and contain specific information and language, the documents may be considered invalid, placing you in the position of never having the document in the first place.

Most attorneys offer a free consultation, where they are happy to answer questions and help direct you down the right estate plan. Having someone there who is well versed in this subject makes the process a lot less stressful. When you have a moment, sit back and think about what you want your life to look like from this point forward, and then, go make a plan.

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Irrevocable Trust Agreement

Mistakes of the Rich and Famous: Doris Duke

Mistakes of the Rich and Famous: James Gandolfini

The Difference Between a Will and a Trust

What are Irrevocable Trusts in Florida?

Helping the Elderly Make a Power of Attorney

Things to Think About When Caring for an Elderly Parent

“Caregiving often calls us to lean into love we didn't know possible.” -Tia Walker

What is Estate Planning?

"By failing to prepare, you are preparing to fail." -Benjamin Franklin

What is Probate?

How to Apply for Medicaid

Home Care for the Elderly: What is it?

“To care for those who once cared for us is one of the highest honors.”

Florida Bankruptcy

The Difference Between Dissolution and Divorce

What Even is a Dissolution?

Naming Your Trust as an IRA Beneficiary: A Do or a Don’t?

Risks of Listing Joint Owners on Your Accounts

“Sometimes convenience comes at a high price.” –Unknown

Mistakes of the Rich and Famous: Michael Jackson

Michael Jackson. Mistake: Failed to Fund his Trust.

Mistakes of the Rich and Famous: Aretha Franklin

Aretha Franklin. Mistake: Not creating an Estate Plan; probate and disabled descendant.

Condominium Law: Cautions When Purchasing

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.” -Theodore Roosevelt

Special Needs Trust: What are They, and How They Can Help

I praise you because I am fearfully and wonderfully made. Psalm 139:14

Letters of Instruction: Making Death Easier on Your Family

“You never really leave a place or person you love, part of them you take with you, leaving a part of yourself behind.” -unknown.

Medicaid: Proper Planning to Qualify

Medicaid, a federal program, is managed by state agencies. In Florida, The Florida Department of Children and Families (DCF), The Agency for Healthcare Administration (AHCA), and The Florida Department of Elder Affairs (DOEA) are responsible for handling Medicaid.

Rights of a Surviving Spouse

“The more you invest in a marriage, the more valuable it becomes.” -Amy Grant

Naming Your Trust as an IRA Beneficiary: A Do or a Don’t?

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Power of Attorney v. Durable Power of Attorney: Making the Right Decision

“To care for those who once cared for us is one of the highest honors.” – Tia Walker

Avoiding Probate: The Ugly, Time Consuming, and Expensive Process

“Death is not the end. There remains the litigation over the estate.” – Ambrose Bierce

Planning For the Future

“The future is already here – it’s just not evenly distributed.” – William Gibson

“Caregiving often calls us to lean into love we didn't know possible.”
-Tia Walker

"By failing to prepare, you are preparing to fail."
-Benjamin Franklin

I praise you because I am fearfully and wonderfully made.
Psalm 139:14