will or trust estate planning health care directives power of attorney

Estate Planning Tips During COVID-19

When it comes to COVID-19, there is so much that feels beyond our control.  With estate planning (wills or trusts and more), there are things that you CAN control. Here is a list of things you can do (from an estate planning perspective) that may help you feel a little more in control:

#1 During this COVID-19 crisis, who are your emergency health care decision makers?  

Talk to your loved ones about your wishes regarding your medical care. First, who would you want to step up to advocate for you during a health care crisis? The two parts of Health Care Directives are the Designation of Health Care Surrogate and Living Will. With the Designation of Health Care Surrogate, you nominate someone you trust to make health care decisions for you in the event that you are unable to communicate those decisions yourself. With a Living Will, you can include directions regarding end of life decisions, as well as other decisions about your care and treatment.

#2 Look for your HIPAA Authorization.

Your Health Care Directives should also include a HIPAA Authorization.  HIPAA Authorization language follows the requirements Health Insurance Portability and Accountability Act (HIPAA) to authorize your designated patient advocate to receive information about your health condition and status.  Without one in place, a hospital, medical office, or third-party medical provider may not be able to release medical records or other medical information to your designated patient advocate.

#3 Update or create a Durable Power of Attorney.

A Durable Power of Attorney for Finances lets you designate an Agent to access your assets and make financial decisions on your behalf. A Durable Power of Attorney’s scope can be as broad or as narrow you wish.  Some of the more common powers an Agent may need in emergency situations include handling financial transactions, dealing with bank accounts, transferring funds, paying bills, filing taxes, funding a trust, updating beneficiary designations, and addressing insurance claims.

Learn more about a power of attorney here.

#4 Review your Will or Trust

A Last Will & Testament and Revocable Living Trust Agreement address how you want your estate to be handled upon your passing. It is important to review your existing estate plan if your goals, family or financial situation has changed since you last had your estate plan prepared.  If you do not have a basic Will or Revocable Living Trust Agreement in place, now is a good time to begin the estate planning process. Because if you don’t do anything and you pass away, your family will be stuck with the state’s intestacy laws, which could result in distributions that are contrary to your wishes.

Learn more about Wills here.

Learn more about Trusts here.

How do you know if you need a Will or a Trust?

#5 Check your guardian designations for your minor children.

If you have minor children, you need to designate guardians. In Florida you can do this in your Will and in a separate document. Above all, if you don’t legally nominate guardians for your kids. Your family members could end up in court fighting over who gets to raise them (and control their inheritance).

#6 Check beneficiary designations and asset titling.

Life insurance, annuities and retirement plans pass according to their beneficiary designations, regardless of what your Will or Trust provides.  It is important to coordinate the beneficiary designations with the rest of your estate plan.  Make a list of your assets.  For example, do your accounts show a joint owner?  If you have a trust, does the account statement show the trust name?  Check the beneficiary designations for life insurance and retirement plans. If you need to update these, contact your financial advisor to get your beneficiary forms. If you’re not sure how your accounts fit in with your estate plan, contact your estate planning lawyer.

Avoid these common life insurance mistakes.

#7 Update your passwords list and digital information. This is part of your estate plan.

We live in a digital world!  First, create an inventory of your online accounts and digital files,. Second, note your login IDs and passwords. Remember to note the answers to any security questions and what type of two-factor authentication is in use.  Third, identify all of your devices. For example, make a list of your smartphones, tablets, smart speakers ( like Alexa), laptops, desktop computers. Also, note their passwords, along with the passwords for any important apps. Finally, inventory the other electronic records you use, own or control.

Here’s an article about password managers.

#8 What are your family financial needs?

The COVID-19 pandemic has hurt many families financially.  Therefore, you may want to make gifts or loans to family members.  The annual gift tax exclusion amount is currently $15,000 per person.  For loans to family, the IRS requires that you charge the Applicable Federal Rate (“AFR”). That rate is based on the length of the loan.  You should carefully document gifts and loans to avoid misunderstanding and confusion in the future.  Note that family gifts and loans may affect eligibility for Medicaid benefits.

#9  Remember that you’re not alone! Check in with the experts that you know for help.

There’s a ton of news about health care, finances, state and federal government orders.  Ask your professional advisors for help. We’re trained to sift through what’s important and applies to your situation. Finally, check in with your advisor team and ask for advice. We’re here to help.

revocable living trust avoid probate

How do you know if you need a Will or Trust?

Do you need a Will (Last Will and Testament) or Revocable Living Trust? How do you choose?

Are you interested in a will or revocable living trust? Wills and trusts are useful estate planning tools. They serve different purposes and can even work really well together. First, let’s go over key differences between wills and trusts.

Will characteristics:

  • A will goes into effect only after you die.
  • It only covers property that is in your name at your death.
  • A will passes through a court process called Probate. The Probate court oversees the will’s administration and ensures the will is valid and that the property gets distributed the way the deceased wanted.
  • Because a will passes through Probate, it’s a public record.
  • A will lets you name a guardian for your minor children.

There is a good chance that if you care about how beneficiaries use what you’re leaving them or want someone else to manage it, you’re going to need some type of trust.

The two main types of trusts are testamentary trusts and revocable living trusts. One type of trust is inside your will and the other type of trust is a stand-alone document, called a trust agreement.

Testamentary trust characteristics:

  • A testamentary trust is a trust that you create through your will. A will is only “activated” after you die and after your will goes through Probate. Therefore, a testamentary trust only goes into effect after your death.
  • For our clients with young children who are using a will instead of a revocable living trust, we recommend a testamentary trust inside the will.  That is because children can’t inherit directly while they are minors. And even if they’re not minors, it’s not a good idea to let an 18-year old inherit a lot of money at once!  With a testamentary trust, your trustee (the person you trust to manage money for your children) can provide for your children’s healthcare, education, maintenance and support while your children are minors.
  • You can include provisions in your trust to allow your beneficiaries to inherit at ages and stages, all at once, or for the funds to stay in the trust for that beneficiary’s care and support.
  • Funds that go inside the testamentary trust first have to go through the Probate court process before they wind up inside the trust.
  • The will (and the testamentary trust that’s inside it) is filed with the Probate court.

Revocable living trust characteristics:

  • A revocable living trust is a trust that you create during your lifetime. It is  “revocable” because during your lifetime, you can make changes to it or even revoke it.
  • You can use a trust to manage property during your lifetime, at your death or afterwards.
  • A trust covers only property that you transfer into it during your lifetime, or after your death (via beneficiary designations).
  • Property that passes through your trust avoids the Probate court process.
  • The revocable living trust stays private because it’s not filed with the Probate court.
  • You can include provisions in your trust to allow your beneficiaries to inherit at ages and stages, all at once, or for the funds to stay in the trust for that beneficiary’s care and support.

So if you have a revocable living trust, do you still need a Will?

Yes, you still need a will, a pour-over will. That is generally a very streamlined will that basically “pours” everything that needs to go through Probate to your revocable living trust. We also call this a “just-in-case” will, in case there is property you forget to transfer to your revocable living trust.

Also, if you have minor children, you can use your pour-over will to legally  nominate guardians for your children, in case you and their other parent dies when they are minors.

OK so do you need a will, will with testamentary trust provisions or a revocable living trust?

It depends on different factors and on your priorities such as:

  • Do you want to maintain privacy for your beneficiaries?
  • What is your budget for estate planning? (A revocable living trust costs more to set up than a will).
  • Do you want to avoid Probate?
  • Do you prefer everyone to stay out of Probate court as much as possible?

We can help you sort this out so that you can have peace of mind.

Call us at (813) 902-3189. Schedule a valuable Planning Session at no cost to you.

Learn more about wills, trusts and guardianships here.

You can also learn more about revocable living trusts here.

revocable-living-trust-funding

Why did Carrie Fisher’s Estate Plan fail?

Do you have a revocable living trust? Will your family have to go to court and lose their valuable privacy? Whether you own a little or a lot, you need to be careful with your revocable living trust.

Do you have a revocable living trust as part of your estate planning? A solid estate plan can mean the difference between an expensive time in court or a smooth transfer of property for your family. When a high-profile celebrity passes away, we can learn a lot about the value of careful planning. Let’s take a look at what trust funding is and why it’s important.

This failed estate plan is an excellent example of why you need properly transfer property to your revocable living trust.

In our opinion, Carrie Fisher’s plan failed, because it didn’t keep her assets out of court and they didn’t pass privately to her daughter. While Carrie Fisher had a revocable living trust, she didn’t transfer all of her assets to her trust.  That is why her Trustee had to file a petition in probate court seeking to have her assets transferred into her trust.

This actually happens a lot! We see clients all the time who come in with trusts from other lawyers. Unfortunately, many of those documents won’t work the way they were designed to. That’s because nobody took the time to inventory the assets or transfer them to the trust.

With a Trust, you can keep your family out of Court and keep your affairs private.

“Funding” is the the legal term for making sure you transfer your assets to your trust.

Because Fisher’s Trust was unfunded, all of her assets and who will receive them became public.  As a result, we know that Fisher left her estate to her daughter.  The estate included cash accounts, several LLCs, real estate, a life insurance policy, personal belongings, and intellectual property rights. Because this information is now public, that leaves Fisher’s daughter at risk.  Unscrupulous parties now have access to details they wouldn’t otherwise know.

This is exactly why a key part of our trust planning process is a thorough inventory of your assets. If you choose an estate plan that involves a revocable living trust, we guide you through the trust funding process. And we offer a review of your assets and planning documents at least every three years, if not annually.

Proper estate planning can keep your family out of court and save your family precious time and money. Call us to create a comprehensive estate plan or to review your existing plan.

We don’t just draft documents, we help folks make informed and empowered decisions about life and death, for themselves and their loved ones. To schedule a Planning Session, call us at (813) 902-3189.

Click here to learn more about trusts and wills.

Here is an article about the Court case. 

last will and testament - trust - beneficiaries

What should you know about naming beneficiaries?

Do you have a beneficiaries in your Last Will and Testament, Life Insurance and Retirement Accounts? Here are some important things you need to know.

Beneficiaries of a Last Will and Testament have to wait.

First, you use a Will (Last Will and Testament) to give assets to your beneficiaries, your beneficiaries don’t inherit automatically. Those beneficiaries will need to wait until the probate court process is over before they can inherit. In some cases, this can take many months or even years. If the estate is complex, the legal fees can deplete that inheritance.  If avoiding probate is a top priority, consider a Revocable Living Trust as part of your estate plan.

Go here to learn more about wills and trusts.
Go here to learn more about avoiding probate.

Your Last Will and Testament does not control your retirement plan and life insurance policy benefits. 

Second, assets in a life insurance policy or retirement plan pass to your beneficiaries directly, bypassing your Will (Last Will and Testament).  Your beneficiaries will receive these assets after completing a claim form.

Minor children should not inherit directly. Consider a trust.

Don’t name a minor child as the beneficiary of a life insurance policy or other assets. That is because minor children cannot inherit assets directly. Instead, the wise move is to create a trust to hold these assets for the benefit of a minor child. Name a trustee to oversee the management and distribution of the funds in a way that complies with your wishes.

Go here to learn more about trusts.

Be careful how you name retirement plan beneficiaries.

Unfortunately, most beneficiaries of a retirement plan take the cash immediately, which may not be your intention.  Don’t name your estate as a beneficiary.  That is because that may not allow your spouse or younger beneficiary to take advantage of an IRA rollover or some provisions that could allow your IRA to grow tax-deferred over many years.

If there are multiple beneficiaries, name them.

Finally, if there are multiple beneficiaries for an insurance policy or retirement plan. Don’t make name one person, assuming he/she will distribute to other beneficiaries.  Instead, designate a separate share for each beneficiary.  Does a beneficiary have special needs? If so, create a trust for their share so any inherited assets don’t disqualify them from important government benefits.

Call our office today at (813) 902-3189 to schedule a time for us to talk about an Estate Planning Session.
how-much-does-an-estate-plan-cost

How much does an estate plan cost?

There is a lot more than just price that goes into choosing legal documents or the lawyer that will help you.

When you’re comparing our fees to your other options, I encourage you to really understand what you are actually getting for that price. If you use an online form, you might actually cause your family a lot of headache and heartache down the road. So you want to find a lawyer that can draft you excellent legal documents in accordance with the state laws that captures everything that you want to see about how your assets go to your loved ones under what circumstances, who’s in charge.

In my office, we create relationships with my clients instead of just a transaction.

That is because your estate planning should stay up to date with your life and with the law as it changes. So that your documents, so that when it matters most, your documents work. In my office, we analyze our client’s situation and goals and what we need to do to get them there.

We charge a flat fee agreed to in advance. That way there are no surprises. We offer “a la carte” options and packages.

Many times we find that it works best for our clients to offer them packages for their estate planning so that they are covered not just after their death but during their lifetime as well. So when it comes to which estate plan package might be right for you, we help you figure out what’s right for you during our first meeting. On average, our will plan starts at $2,000 and our trust plan start at $4,000. Those prices are not for just one document. It’s a series of documents and strategy that is customized to your specific situation. We design our plans to make things as easy as possible for yourself and your family in the event that you become incapacitated or die.

What if you’re thinking? Oh I just need something simple. I just need one document. OK, maybe you do. We won’t really know what you really need until we meet in person and review your specific situation.

Sit down with me for a Planning Session. It’s a no obligation Planning Session. That way you can go over your situation and what options work best for you so that you can be on tract to make things as easy as possible for yourself and your family in the event that you become incapacitated or die.

Call us at (813) 902-3189 to schedule your Planning Session.

Check out our video about how much an Estate Plan costs.

Will These Life Insurance Mistakes Hurt You?

Life insurance is an important part of estate planning and taking care of the people you love after you pass away. Here are some common mistakes that you should avoid.

1. Not naming a beneficiary

Too many people forget to name a beneficiary or backup beneficiaries. Those mistakes can result in your life insurance proceeds having to go through the probate court process. That can tie up your money for months and even open up the life insurance proceeds to your creditors. And that can wipe out your funds.

2. Naming an individual as beneficiary to take care of that money for someone else

You might be tempted to list someone you know and trust as beneficiary of your life insurance, with the understanding that he or she would use that money to take care of another person that you have in mind. This could result in a number of problems. For example, you list your sister as beneficiary of your life insurance so that she can take care of your daughter.

3. Not keeping your beneficiaries up to date

Too many people forget to update their beneficiary designations.  You should review your beneficiary designations at least once a year so that you can make sure you update them upon events like divorce, deaths, and births.

4. Naming a minor as beneficiary

We see this ALOT. And it can result in expensive and time consuming complications for your family. That is because in Florida, minor children can’t directly inherit assets over $15,000. If a minor is listed as the beneficiary, the proceeds of your insurance will be distributed to a court-appointed custodian (guardian of the property), who will be in charge of managing the funds (often for a fee) until the age of majority, at which point all benefits are distributed to the beneficiary outright.

Instead of naming a minor as beneficiary, consider setting up a trust to receive the insurance proceeds, and name a trustee to hold and distribute the funds to a minor child you would want to benefit from your insurance proceeds. By doing so, you get to choose not only who would manage your child’s money, but also how and when the funds are distributed and used.

5. Naming an individual with special needs as beneficiary

If a loved one has special needs, chances are you want to help provide for a lifetime of care and protection. But if you leave the money directly to someone with special needs, it could disqualify that individual from receiving much-needed government benefits. Consider creating a “special needs trust” to receive the insurance proceeds. That way the money won’t go directly to the beneficiary upon your death, but it would be managed by the trustee you name and dispersed according to the trust’s terms, without affecting benefit eligibility.

You owe it to your loved ones to get this right.

Naming life insurance beneficiaries might seem pretty straight forward. But if you mess this up, you can create pretty big problems for the people you love.  But don’t worry, we can support you in planning for the people you love, whether it’s through life insurance or other tools such as wills or trusts.  Schedule an estate Planning Session to get started.

Call us at (813) 902-3189.

pet-trust-estate-planning

How can you use estate planning to take care of your pet?

If you have a pet, he or she probably feels like part of your family.  So it makes sense to take care of your pet if you become incapacitated or pass away. Because if you don’t make any plans, your beloved companion could end up in an animal shelter or worse.

The law looks at pets as personal property. So you can’t just name your pet as a beneficiary of your will or trust without some careful planning.

Be careful with your Will.

Since you can’t name your pet as a beneficiary, you might consider leaving your pet and money for its care in your will to a trusted person who would be your pet’s new caregiver. But your pet’s new caregiver would not be legally required use the funds properly. In fact, your pet’s new owner could legally keep all of the money for themselves and drop off your beloved friend at the local shelter.

You’d like to think that you could trust someone to take care of your pet if you leave him or her money in your will to do so. But it’s impossible to predict what circumstances might arise in the future that could make adopting your pet impossible.

Also, a will has to go through the court process known as probate, which can last for months. That can leave your pet in limbo for a while.  And remember that a will only goes into effect upon your death, so if you’re incapacitated by accident or illness, it would do nothing to protect your companion.

Consider a pet trust.

A pet trust in a revocable living trust in order to be completely confident that your pet is properly taken care of and the money you leave for its care is used exactly as intended.

This way, you can lay out detailed, legally binding rules for how your pet’s chosen caregiver can use the funds in the trust. And unlike a will, a pet trust does not go through probate. So it goes into effect immediately and works in cases of both your incapacity and death.

Also, a  pet trust allows you to name a trustee. That trustee is legally required to manage the trust’s funds and carry out your wishes. And to provide a system of checks and balances to ensure your pet’s care, you might want to name someone other than the person you name as caregiver as trustee.

Do right by your pet.

With Myrna’s guidance and support, you’ll have peace of mind knowing that your beloved pet will receive the kind of love and care it deserves when you’re no longer around to offer it. Contact us today to get started.

Call us at (813) 902-3189.

How Will The Coming Wealth Transfer Affect Your Family?

Whether it’s called “The Great Wealth Transfer,” “The Silver Tsunami,” or some other catchy-sounding name, it’s a fact that a tremendous amount of wealth will pass from aging Baby Boomers to younger generations in the next few decades. In fact, it’s said to be the largest transfer of inter-generational wealth in history.

Because no one knows exactly how long Boomers will live or how much money they’ll spend before they pass on, it’s impossible to accurately predict just how much wealth will be transferred. But studies suggest it’s somewhere between $30 and $50 trillion. Yes, that’s “trillion” with a “T.”

A blessing or a curse?

And while most are talking about the benefits this asset transfer might have for younger generations and the economy, few are talking about its potential negative ramifications. Yet there’s plenty of evidence suggesting that many people, especially younger generations, are woefully unprepared to handle such an inheritance.

An Ohio State University study found that one third of people who received an inheritance had a negative savings within two years of getting the money. Another study by The Williams Group found that inter-generational wealth transfers often become a source of tension and dispute among family members, and 70% of such transfers fail by the time they reach the second generation.

Whether you will be inheriting or passing on this wealth, it’s crucial to have a plan in place to reduce the potentially calamitous effects such transfers can lead to. Without proper estate planning, the money and other assets that get passed on can easily become more of a curse than a blessing.

Get proactive

There are several proactive measures you can take to help stave off the risks posed by the big wealth transfer. Beyond having a comprehensive estate plan, openly discussing your values and legacy with your loved ones can be a key way to ensure your planning strategies work exactly as you intended. Here’s what we suggest:

Create a plan

If you haven’t created your estate plan yet—and far too many people haven’t—it’s essential that you put a plan in place as soon as possible. It doesn’t matter how young you are or if you have a family yet, all adults over 18 should have some basic planning vehicles in place.

From there, be sure to regularly update your plan on an annual basis and immediately after major life events like marriage, births, deaths, inheritances, and divorce. We maintain a relationship with our clients long after your initial planning documents are signed, and our built-in systems and processes will ensure your plan is regularly reviewed and updated throughout your lifetime.

Discuss wealth with your family early and often

Don’t put off talking about wealth with your family until you’re in retirement or nearing death. Clearly communicate with your children and grandchildren what wealth means to you and how you’d like them to use the assets they inherit when you pass away.

When discussing wealth with your family members, focus on the values you want to instill, rather than what and how much they can expect to inherit. Let them know what values are most important to you, and try to mirror those values in your family life as much as possible. Whether it’s saving money, charitable giving, or community service, having your kids live your values while growing up is often the best way to ensure they carry them on once you’re gone.

Communicate your wealth’s purpose

Outside of clearly communicating your values, you should also discuss the specific purpose(s) you want your wealth to serve in your loved ones’ lives. You worked hard to build your family wealth, so you’ve more than earned the right to stipulate how it gets used and managed when you’re gone. Though you can create specific terms and conditions for your wealth’s future use in planning vehicles like a living trust, don’t make your loved ones wait until you’re dead to learn exactly what you want their inheritance used for.

If you want your wealth to be used to fund your children’s college education, provide the down payment on their first home, or invested for their retirement, tell them so. By discussing such things while you’re still around, you can ensure your loved ones know exactly why you made the planning decisions you did.

 Secure your wealth, your legacy, and your family’s future

Regardless of how much or how little wealth you plan to pass on—or stand to inherit—it’s vital that you take steps to make sure that wealth is protected and put to the best use possible.

Call our office today at (813) 902-3189 to schedule a  Planning Session and mention this article to find out how to get this $500 session at no charge.

Part 2: The real cost of not planning

This article is part of a series discussing the true costs and consequences of failed estate planning. The series highlights a few of the most common—and costly—planning mistakes we encounter with clients. If the series exposes any potential gaps or weak spots in your plan, meet with us to learn how to do the right […]