It is more than likely that the reason for establishing your estate plan is to ensure that your family is financially secure after you are gone. Estate planning for families with minor children can present challenges and difficult choices to parents. The challenges originate from the minor’s legal restrictions on ownership of property and by the parent’s desire to gift assets to a minor but to defer the minor’s actual possession until the minor reaches some level of maturity or at least the age of majority. Additionally, planning for minors also involves planning for the custody of the minor in the event both parents die before the minor reaches the legal age of majority. Once appointed, the guardian has a significant impact on the child’s value system, religious beliefs, education and, in general, the child’s development to adulthood.

Once a guardian is chosen, the most effective way to make sure that each of your children receives the necessary financial support to ensure that they are well taken care of is to establish your Revocable Trust and draft a provision that would create Separate Share Trusts upon your death. A “Separate Share Trust” is called that because a separate trust is created for each of your children. This can make it easier for the parents to account for the differences in the needs and propensities of each child. If one child has special medical or education needs, or if there is a wide gap in the children’s ages, parents can establish the appropriate portion of the estate, and can establish the terms of the distribution accordingly. Thus, by using Separate Share Trust, you can ensure that each child is cared for according to their specific needs.

In Separate Share Trust the parent/grantor can decide under what circumstances and at what age each child has the maturity sufficient to take possession of the assets. This will ensure that children will not recklessly waste the funds when they turn 18. However, one disadvantage to using “separate share” trusts with multiple children is the difficulty in administration. Depending on the provisions of the trust agreement, the trustee (which does not have to be the legal guardian) may have to account to each beneficiary separately and may have to maintain records of the distributable net income attributable to each beneficiary for income tax purposes.

A grantor need not have a large estate to create a trust. The assets you will leave your children can add up faster than you think. If you add the value of your home, savings and investment accounts, you may find that you are well over $75,000. In these cases a trust is usually the best solution. In addition, the trust could be funded by life insurance policies which can push the value of their estate much higher. Once established, the trust would provide for the children’s care and education and make money available to them as they reach certain ages indicative of maturity 18, 21, 25, 30, 35 or any other age you specify. You’ve worked hard to provide for your family a bright future. Plan accordingly and make sure that your work creates the best opportunities imaginable for your children.

Yes! If you dont deed your home to your trust, your home will be forced into the probate process after the deaths of both you and your spouse. Real estate is one of the most difficult assets to probate, so you definitely want to assure that ALL of your real estate is owned by your trust or by your LLC. Your home should always be owned by your revocable trust.

Some of my clients are concerned that the transferring of their homestead into their revocable trust will forfeit their homestead protection. It will not affect any homestead rights you currently have. Trust ownership has always provided for the continued tax advantages and creditor protection that home owners are afforded in Florida. Florida’s Third District Court of Appeals affirmed this understanding in their Octobet 27, 2010 ruling in the case of Aronson v Aronson.

There should now be no question as to the title of your homestead. It should always be owned by your revocable trust.

A difference between a corporation and an LLC is that a creditor of an owner may directly levy on the debtor/shareholder’s stock in a corporation and thus take all the rights that compose the stock share, such as voting rights, right to elect directors, etc. By contrast, a creditor of an LLC is usually limited to a lien against the debtor/member’s economic right to distributions only until the judgment is paid, but the creditor usually takes no other of the debtor/member’s rights in the LLC. (This is often referred to as a “charging order lien” from the form of the relief usually specified in the RULPA/RULLCA).

Keep in mind that one can have an “S-LLC” by the simple expedient of checking the box for the LLC to be taxed as a corporation instead of a partnership, and then making the S-election for the LLC.

Although the ruling in the Olmstead case subjected single-member LLC assets to liability tied to its single member, this may be held to be a bad ruling in the future. It certainly goes against the purpose and spirit of the LLC laws. In any event, this potential adverse result may be easily avoided by interjecting a second member in any Florida LLC until the law is further clarified. Another significant problem with an S Corp is that they are, by far, the worst structure for advanced planning purposes. The limitations imposed on financial planning and estate planning and the limitations against international shareholders are major impediments to using S corps, particularly in an increasingly more complicated estate and tax environment and a world that is quickly globalizing.

Too many attorneys and CPAs don’t seem to know that you can make the S election for the LLC; in general I much prefer the LLC for estate planning and asset protection purposes (although the single-member issues can be a concern if their are not two viable members to include in the LLC). While S corporations still have some effective uses, their use in the future as business entities will be far more limited, and LLCs will continue to be the vehicle of choice for privately-held and family businesses.

Divorce and second marriages present special challenges in estate planning. These challenges are common where the spouses have children from prior marriages. The emotions and people involved require a delicate balancing between the needs of the surviving spouse and those of natural children. The surviving spouse will want to insure a continuation of the lifestyle they enjoyed while both spouses were alive and children from a prior marriage may require support for education and maintenance until they are mature.

Multiple marriage spouses cannot afford to procrastinate or put off the issue for later. Some believe that the best approach to estate planning is to put everything into joint ownership with the new spouse and expect that person to be fair and honest. This rarely works; the messiest probate battles almost always involve step parents, step children and step siblings. Don’t be the person who left a legacy of hurt feelings and anger. Inheritance battles will permanently divide families. The feud between families can go on for a very long time because the expensive and emotionally draining probate litigation process can go on for years. If you love your family, don’t leave them to sort out your mess. With proper planning, the estates of multiple marriage spouses can be administered in an orderly, mature fashion, with provision made for all interested parties.

One convenient and effective solution is the Revocable Trust. In a Revocable Trust only the Grantor can amend the agreement. Upon the death, the Trust becomes irrevocable, since the only person who had the right to amend it is unable to do so. In order to ensure the welfare of the children of the prior marriage, each spouse’s Revocable Trust should be funded with that spouse’s separate assets. Separate assets funded in each spouse’s separate Revocable Living Trust, and subsequently maintained in that Trust during the course of the marriage, often remain separate in a subsequent divorce. The Grantor can name anyone they wish as Trustee to manage and distribute the trust assets. The trust will specify all the provisions necessary to ensure that the Grantor’s wishes are met. In contrast to a will there is no probate process and a trust will not be contested.

The needs and wishes of couples in second marriages vary widely, depending on the age of the spouses, their net worth, the length of their marriage, the age of their children, and their relative contributions to the marital estate. A heartfelt and mature conversation must take place to discuss what is best for the family. Consulting an experienced Estate Planning Attorney is a good starting point. The result of establishing the Trust is that the Grantor may provide for his or her surviving spouse, and be assured that the Grantor’s children will also be taken care of.

If you die without a trust in place and leave all of your assets to your minor child, that child’s surviving parent will be able to manage the entire estate on behalf of the child. If you die while happily married, there is no issue. However, if you die while divorced, your ex-spouse will end up with ALL of your assets. The only way to prevent this from occurring is to set up a Separate Share Trust for your child, to be funded by your Living Trust at the time of your death. Don’t leave everything to your ex; leave it to your child. Get a trust in place immediately.