No Time To Take A Knee: Your Estate Plan Needs A New Formation

Estate Planning is never just “set it and forget it.” No matter what the scoreboard says, it is always important to have your estate plan reviewed by an estate planning attorney every three to five years.

Even when you are halfway through the game, and in the lead, you would never just take a knee and rely on your winning position. This applies in estate planning as well, because even when you are prepared and in a winning position, you have to keep up with the game in order to ensure your “win.” There are a variety of life events that can create a need for new strategies, which is why it is so important to have your estate plan reviewed to ensure that your game plan is still effective. There is no specific time for when you need to have your estate plan reviewed, but generally every three to five years is sufficient. However, if there is any particular life event that takes place that will affect your relationships or distributions, you may want to have your plan reviewed for alterations. Such life events include the following:

Marriage & Divorce: if you have recently married or divorced, you will want to take your current estate plan to your attorney to determine whether these life events are addressed in the documents. Furthermore, you may want to change your Personal Representative, Trustee’s, Guardian’s, etc.

Children: Sometimes your Will & Last Testament will provide for after-born children, but you should take the document to your estate-planning attorney to ensure that your little bundle of joy is provided for. Additionally, you may want to set up a trust, a 529- college plan, alter beneficiary designations in your will, and nominate a legal guardian.

Estate Size Increase: You want to make certain that your estate plans are tailored to your estate size. Therefore, when your estate increases, you may want to make some changes in terms of tax and estate planning. Furthermore, if you have an estate plan that is set up to avoid probate, and acquire new property, you will want to assign that property to your living trust. You also may want to consider a variety of estate planning strategies, anywhere from setting up an LLC to protect certain assets from lawsuits, to reducing the size of your estate for tax purposes.

Settling for “3” Instead of Going for “7” Wills vs. Trusts

Each game plan is incorporated as a means of constructing a distinct strategic advantage. The same is true for wealth management and asset protection plans. While a Last Will & Testament is an essential component of any winning game plan, it is often necessary to tackle your goals with the incorporation of a Living Trust. Look to the following game plans to determine which supplies the best strategic advantages for your asset protection goals.

Will & Last Testament Game plan: Control of Your Assets

A Will is crucial in any estate plan. This is the document that will be used to determine your intent regarding the distribution of your property. Thus, without it, all of your assets will be distributed according to State statute, which may be a departure from your own personal wishes. Furthermore, if you have any minor children, you can designate a legal guardian, thereby communicating your wishes to the court when the time comes for a guardian to be appointed. As you can see, this is the foundation of your game plan.

Will Coupled with Trust Game Plan: Control & Protection of Your Assets

This game plan combines your testamentary wishes with further protection by having the Will pour-over into a Trust. The will coupled with a trust effectively bypasses probate, which is the validation of the will — a process that is often incredibly time consuming and often expensive. The pour-over will takes all of the property that passes through the will, and funnels it into the trust. Said property is then distributed to the trust beneficiaries pursuant to the terms of the trust. A pour-over will functions to ensure that all of the decedent’s property is transferred to trust. Think of the pour-over will as a safety net that catches all of the assets that were not properly transferred into trust. All the contents of the net are then poured into the trust, ensuring that all of the property is ultimately distributed through the living trust. Furthermore, all of the decedent’s property is distributed by the terms of one document alone (the trust), allowing for simplicity and clarity.

You need a Last Will & Testament in every winning succession game plan; however, combining it with a Living Trust may be one of your most important strategic advantages! It’s a Wild world. Are you protected?

Estate Planning For The College Student

For parents and students, the commencement of a new school year is much like what January 1st is to everyone else: Looking back on the recent life events and choices, while looking forward to the lofty ideals of what lays ahead – a fresh start to the “new” year. In the inception of the new school year, it is time to consider whether you are sporting an old, and less effective, estate plan. Explore your current status, and determine if you are properly prepared for tomorrow. Estate planning isn’t just for the “old & wise.” In fact, the “young and foolish” can start their ascent into wisdom by taking a look into the future, and being prepared for what is looking back! Clearly, the last thing on a young adult’s mind is designating a personal representative, and deciding whom to give their borderline non-existent fortune to. However, at such a young age, the goals of estate planning are not ripe, they are just different. For example, Junior should be less concerned with who will be inheriting his baseball card collection and Xbox, and more concerned with how his digital assets will be treated (preserved, closed, etc.), or who will be his power of attorney and/or Healthcare Surrogate. Standard college student estate planning goals can be achieved with the following documents. Durable Power of Attorney (DPA): this document is going to designate someone to take care of “business” in the event of incapacitation or death. Any financial decision or situation where the college student’s authority is necessary will require a power of attorney to step in their shoes. Furthermore, it can be useful for convenience alone. Lets just say the college student is studying abroad, and wants her parents to take care of her affair while she is gone. When Junior reaches the age of a legal “adult,” he has to authorize his parents to make decisions for him. Combination Living Will & Designation of Healthcare Surrogate: this is a very important issues for young adults, as many are surprised to hear that their parents may not be able to make health care decisions for them or access their health records. Therefore, the college student will want a living will & designation of healthcare surrogate in place, as well as HIPPA authorization, to ensure that a trusted person or parent(s) can make medical decisions on their behalf. Digital Assets Will: Today’s college student will have a lot of digital assets (social media accounts, banking accounts, school accounts, etc.). Therefore, it is often helpful to have a will in place that directs the proper administration of such accounts and assets. For monetary accounts, you may want to leave specific instructions, including the account information, and how you want the account to be closed or maintained. For sentimental accounts (social networking, photos, blogs, etc.), your main concern will be minimizing the hassle associated with loved one’s accessing your accounts, or having them closed in a manner that will preserve your privacy. Furthermore, the college student may want to consider a basic pour-over will and living trust to avoid the hassle and time associated with probate. A lesson to those who are proceeding down the path of collegiate wisdom – plan ahead!

New School Year May Require a New Estate Plan

For parents and students, the commencement of a new school year is much like what January 1st is to everyone else: Looking back on the recent life events and choices, while looking forward to the lofty ideals of what lays ahead – a fresh start to the “new” year. In the inception of the new school year, it is time to consider whether you are sporting an old, and less effective, estate plan. Explore your current status, and determine if you are properly prepared for tomorrow. A lot can happen in a year: children get older, family relationships change, or the size of your estate increases. Let us take a look at possible life events that can warrant a revised estate plan:

Marriage & Divorce: If you have recently married or divorced, it is important to go back through your current estate plan to see whether these life events are addressed in your will or trust documents. First and foremost, marriage does not revoke a will. Divorce, however, may have an effect on the validity of the will. When you fail to amend your will following a divorce, and unless there is a provision within it that states otherwise, the will is treated as if the former spouse died upon divorce (wishful thinking, right?). As an alternative, the divorce or dissolution of marriage judgment can contain such language stating that the provisions in the will regarding the former spouse are valid, notwithstanding the divorce. Therefore, if you no longer want your former spouse to be the beneficiary of any portion of your estate, you need to check the language of your current will. If you get married following the execution of an estate plan, your spouse is entitled to an intestate share (in Florida, this is “per stirpes”) of your estate by statute, unless the new spouse waives the right, or the document itself provides otherwise (intent not to provide for new spouse, or provision providing for spouse in contemplation of marriage). Also, you may have had your former spouse designated as a Power of Attorney, or health-care surrogate. Thus, it is very important to ensure that your estate plan is consistent with your wishes following a divorce or marriage.

Children: if you have a new child following the creation of your estate plan, it is important to ensure that your new bundle of joy is provided for. You may want to set up a trust, a 529-college plan (see “Student Tax Holidays & Savings,” above), alter beneficiary designations in your will, and nominate a legal guardian.

Estate Size Increase: You want to make certain that your estate plans are tailored to your estate size. Therefore, when your estate increases, you may want to make some changes in terms of tax and estate planning. Furthermore, if you have an estate plan that is set up to avoid probate, and acquire new property, you will want to assign that property to your living trust. You may want to consider a variety of estate planning strategies, anywhere from setting up an LLC to protect certain assets from lawsuits, to reducing the size of your estate for tax purposes.

The death rate in Florida is 100%, which means NO ONE can completely avoid the probate process. The term probate generally refers to the method by which your estate (the totality of the assets in your personal name at death) is administered and processed through the legal system after you die.  The probate process helps you divide and assign parts of your estate in an orderly and supervised manner. Your estate must be divided according to the specifics of your Will, if you die with a Will, or according to statute if you die intestate or without a Will. (Your debts and taxes must be paid before your beneficiaries receive their inheritance, for example).

If you have creditors at death, those debts must be satisfied before dividing the remainder of your assets, additionally there may be taxes due and those must be paid before distribution as well.  This means that the process of finding your creditors and paying those debts can take months and the distribution of the remainder to your heirs may become complicated.  There are legal methods that allow a person to make the process of distributing assets after death more efficient and less costly, which is an advantage to your family and loved ones and a wise investment.  Planning for the future will save your family members additional grief and possibly avoid conflict among family members and other beneficiaries.

Having a Will is a solid first step in the right direction to ease the probate process, but that is not all you need.  Placing your property in Trust to protect it from creditors, drafting a Power of Attorney, a Living Will and a Designation of Healthcare Surrogate are other methods to ensure that nothing is left to chance, that your family will be protected and that somebody you trust will make legal decisions for you when you are no longer able to make them yourself.

An attorney that specializes in estate planning can help explain the legal tools that are available to each individual depending on their financial situation and their specific needs.  Common methods that are utilized to avoid probate are Revocable Trusts which allow your property to be protected from creditors and susceptible to probate.  By scheduling a consultation an attorney can better explain the additional benefits of creating a revocable trust and how this can save you time and money in the long run.

It is important to note that you do not have to have a large estate to take advantage of the benefits of having your assets in a trust or any other legal estate planning tools.  This is a common misconception, but having an estate plan is something that everyone should give serious consideration to.  Additionally, it is also important to mention that although having an estate plan may not seem like a priority to most people, you need to be prepared for any eventuality.

Nobody likes to think about death or incapacity, but these are facts of life and it can happen to any of us at any given time.  If you have a family and if you have small children you should plan for their care in case you can no longer care for them and this is something that an estate planning attorney can help you with.

It’s a Wild world. Are you protected? SM

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.

When Relationships End…

Over the Fourth of July weekend we found out that it’s over for Scott Disick and Kourtney Kardashian.  Kardashian, 36, and Disick, 32, shared nine years and three children together despite the fact that their relationship was frequently strained by Disick’s drinking problem, partying ways, and his regular stays in rehab including one earlier this year. I bet we all saw that one coming!

The early stages of a romantic relationship and marriage are usually of joy and happiness.  When a couple gets married there is little time to contemplate the possibility that maybe someday the relationship may fail, but it can! (Just ask Kourtney Kardashian). Nobody likes to think about that possibility and for the most part, couples trust each other with everything including their assets, even when those assets that are non-marital, that is, the spouse owned the asset before entering into the marriage.  The act of mixing non-marital and marital assets (like joint accounts or transferring title of solely-owned property to the marriage) is called “co-mingling”.

The problem that arises when one co-mingles marital with non-marital assets is that in the event that the relationship does fail, equitable distribution may be required and this may mean that a person who did not intend to give up ownership of non-marital assets may end up losing half of their interest in them because he or she failed to keep them separate.  Don’t make this rookie mistake!

Failing to keep non-marital assets free from mixing with marital assets creates a presumption that a gift was intended to the other spouse and the burden is on the person that co-mingled non-marital funds to overcome this presumption.  Establishing a trust and transferring to it assets that are non-marital, is a great way to keep them protected from the reach of an ex-spouse and by managing it in such a way that marital assets are never transferred into the trust. A Prenuptial Agreement is another commonly used and effective method to protect non-marital assets.

There are other alternatives to ensure that your non-marital (and marital) wealth is protected, but you must seek legal counsel to make sure you can take advantage of all the options available to you. Our firm specializes in wealth and asset protection and can help by providing you with more detailed information and tailored strategies to meet your individual needs.

It’s a Wild world. Are you protected? SM

For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Partners, P.A. at 954-944-2855 to schedule your free consultation.