The Estate Planning Documents That Everyone Should Have

Posted by on Oct 28, 2010 in asset protection, estate planning, Family Law, Legal News, Real Estate, tax, Trusts, Wills |

People hear the word “estate” and think that end of life financial planning is just for the extremely wealthy. They could not be more wrong. The extremely wealthy have the knowledge to surround themselves with attorneys and accountants that shield them from the perils of an improperly planned estate. The people most harmed by the probate process and the estate tax are the middle-class of this country.

I am married and I have a daughter who is almost two years old. I like in a house that used to have equity in it but it is mostly mortgage today. I lease my car, own a small business, and pay student loans for my wife and myself. We are a two-income household with a little bit of money in the bank but neither of us will be able to retire any time soon. If this scenario sounds similar to yours, you probably need a similar estate plan to the one I currently have in place. My estate plan includes the following:

Two Revocable Living Trusts – You and your spouse will both be co-trustees of each other’s trust. You will have the same access to your assets as you do right now. When the first spouse passes away, the maximum allowable tax-free distribution for the year of death will fund a newly created Bypass Trust. The remainder of the assets in the deceased spouse’s trust will fund a newly created Marital Trust. The surviving spouse will have access to all of the assets in the spouse’s own Living Trust, as well as the newly formed Bypass and Marital Trusts. By setting the trusts up in this manner, when the surviving spouse dies, we will be able to pass all of the assets to the children while only paying half (if any) of the estate tax. Using this technique will save your children over $500,000 in estate tax. In addition, the trust will avoid probate completely (saving tens of thousands of dollars) and provide your children with complete asset protection, which means that no one will be able to touch the assets you leave them, including divorce, creditors or even litigation.

Two Assignments of Property Into Trust – This document helps to fund the trusts. For all real estate, we will sign and record deeds. For all bank and brokerage accounts, we will change the title of the ownership. For personal property, however, we don’t have written title so we get the property into the trust and avoid probate by using an Assignment of Property into Trust.

Pour-Over Will – There are many negatives to distributing assets through a Will. First, all of the assets must be probated. Second, the Will offers no control over the distribution of the assets and offers no asset protection to your beneficiaries. Another disadvantage is that a Will becomes public record as soon as the person dies. Since the Will will be recorded and everyone will be able to view it, we like to make it as vanilla as possible. We simply state that a trust exists and that the distribution will be handled by the trustee. We also state that any assets that you forgot to put into the trust during your life should “pour over” into the trust immediately. The Will will also be used to name the guardian of your children.

Financial Power of Attorney – If you become incapacitated, either unconscious or mentally unaware, you need to determine who you want to handle your financial affairs. This document is very important to have on file considering that most married couples travel and vacation together. If an accident occurs for one of them, it usually occurs for both.

Designation of Health Care Surrogate – In a similar line of thought as the Financial Power of Attorney, if you become incapacitated, either unconscious or mentally unaware, you need to determine who you want to handle your medical decisions. In addition, the Designation of Health Care Surrogate should also state if you wish for your Surrogate to be able to view your medical records. Without this HIPAA language, the hospital will not allow your surrogate to view your records and make the informed decision.

Living Will – If you are in an “end-of-life” condition, meaning that you are only being kept alive by machines, the hospital will continue to keep you alive artificially no matter what your wishes are and no matter how much it costs your family, unless you have a correctly executed living will which would allow your health care surrogate to give the doctor the authorization necessary to “pull the plug.”

Execution and Funding – The biggest mistakes I see when I review plans drafted by other attorneys are will execution and funding. I will be there to make certain that all of your documents are correctly executed. I will have my staff act as the witnesses and I will act as the notary. After the documents are signed, I will scan them and keep them on my computer, as well as on my offsite server, so that you can get a copy of them whenever you should need to. I will also help you fund the trust. Creating the trust is similar to building a safe; it can only protect what you put inside of it. I will draft the deeds necessary and walk you through the transferring of personal accounts into trust accounts.

So many people wait until it’s too late. Tomorrow isn’t promised to any of us. If you truly care about your children and want to protect them both financially and emotionally after you are gone, it is imperative to get your estate plan in place as soon as possible.

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at to schedule your free consultation. Let us protect what you value most.

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The Importance of Small Business Planning

Posted by on Oct 19, 2010 in asset protection, corporate formation, estate planning, Family Law, Legal News, tax, Trusts, Wills |

Having a good business plan is like having a detailed map for a long road trip: if you make the right turns and anticipating detours, the trip can go more smoothly. Part of that business plan should include proper legal preparation, but many small businesses today lack this key element. If you set up your business correctly, you can limit your exposure to liability now and avoid losses to your business and family in the future. Any business venture comes with a litany of legal issues and it is imperative that you seek the advice of a business attorney.

Most business owners think they’re too busy to plan for the day they will leave the business and consequently put off succession planning. Leaving business succession for another day may prove fatal. Illness, incapacity, or death can come at any moment. This can be devastating to a business because it is difficult to make rational decisions in emotional times. Establishing a succession plan should be a top priority for any business regardless of its size. Like a well-run relay race, the handing over of a company should be a carefully planned and strategized transition. It must be well executed if it is to be successful.

At Wild, Felice & Pardo, PA, we are able to provide a full range of legal services to our business clients. Whether buying a new business, selling an old business, or operating a current business, our lawyers are trained to examine all aspects of business planning and see to it that all possible issues are addressed. We pride ourselves on providing accurate advice for your specific business needs. For more information on how to shield your business from risk and liability, contact our South Florida law firm for a free consultation.

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Estate Planning For The Many Stages of Your Life

Posted by on Oct 6, 2010 in asset protection, estate planning, Legal News, tax, Trusts, Wills |

When you’re 40, chances are you’re not the same person you were at 20, and your estate plan should reflect the changes you’ve experienced. Here’s a rundown of the estate-planning tools you should have if you’re just beginning your life’s journey, midway through or approaching the final leg.

Young, single and carefree
If you’re over 18 and unmarried, execute four documents to make sure your loved ones can carry out your wishes:
1. A general durable power of attorney enables you to designate who will control your finances if you become incapacitated, whether it’s your parents or another loved one.
2. A health care proxy allows you to designate who will make medical decisions on your behalf in the same situation.
3. A living will lets you lay out your wishes regarding life-sustaining medical treatment.
4. Finally, a Health Insurance Portability and Accountability Act, or HIPAA, release allows your designated agent to discuss your medical condition without violating patient privacy laws. Without those documents, your loved ones may be forced to go to court to seek guardianship over you to assert those controls.

Single, but committed
If you’re in a long-term relationship but unmarried, you need to create a will or trust if you want your life partner to inherit your possessions.

We’re engaged!
A prenuptial agreement isn’t only for people who have a lot of money; it’s essential for everybody. A lot of people divorce because they’ve never had conversations about money. A prenuptial agreement forces people to engage in this financial conversation.

Just married
Revise your durable power of attorney, health care proxy and HIPAA release if you want there to be no question that your spouse should control your financial and medical decisions if you become incapacitated. If you don’t already have one, this is also the time for a will or trust. Rather than risk a fight between your spouse and parents over who should inherit, have a will or trust definitively state who should receive your assets. Also, if you own a home, you should purchase a term life insurance policy that will pay off your mortgage if one spouse dies.
Finally, change your beneficiary designations on such things as health insurance and investment plans so they pass to your spouse. A lot of people think when they get married, those things change on their own, and they don’t.

If you have children, update your will to nominate a guardian to step in if you and your spouse pass away. You should also include provisions in your will or a separate revocable trust so that your child doesn’t inherit everything at the age of 18. A revocable trust allows you to appoint a trustee to handle any money your child inherits. The trustee can use it to support your child as the child grows up, and you can specify at what age your child can receive the money, along with any reasons your child should get it before that age, such as starting a business or buying a house. You can also specify that the trustee can withhold money if your child has a gambling problem, is in the midst of a divorce, or there’s another situation that makes it inappropriate to inherit.
You’ll also need a separate guardianship nomination — sometimes called an emergency guardianship proxy — that nominates a guardian to care for your child if both parents are incapacitated. That’s helpful in simpler situations as well, such as when both parents take a vacation and a child needs emergency medical treatment.
Each time you have another child, be sure your estate planning documents address all of your children, and don’t forget to increase your life insurance. You need about $1 million to care for a child from birth to college. If you have a special-needs child, you should have your attorney set up a special-needs trust, which allows you to provide for your child without disqualifying the child from government benefits.

Divorce and Second-Marriages
If you’re separating or divorcing, you probably don’t want your spouse to still have all the authority to make decisions on your behalf and access your medical and financial information. You should revoke those documents, including beneficiary designations, or sign new ones. A divorce decree doesn’t magically change those things.
If you remarry, revise your will and trust documents to reflect the proper beneficiaries. Most people want to share with their new spouse but also want to provide for their separate children at their death.

As you reach your 40s and 50s, you should consider purchasing long-term care insurance, which covers the cost of long-term care or a nursing home.

Review designations on your durable power of attorney, health care proxy, and HIPAA release to be sure the people you’ve named are still in your life and willing and able to serve in that role. A lot of people at this stage also start planning their funeral to make sure that’s in order.

No matter what your age or asset level, you need to have some sort of estate plan in place. Please take the opportunity to call our office and schedule a free consultation to discover how best to protect yourself, your assets, and your family.

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