Labor Day has been around since the late 1800s after it was deemed a federal holiday in 1894. Labor Day has pretty much always been observed the first week in September. The holiday celebrates the achievements of the American labor force, and citizens get a day off to reflect on how hard they have worked. 

You’ve worked diligently to get where you are, and you need to ensure that you are protecting your assets and accomplishments. The legal system provides documents and tools to serve as asset safeguards. In this article, in honor of Labor Day, we’ll discuss the protections that estate planning offers your hard work. 

Estate Planning 101

While estate planning is a way to prepare for the distribution of your assets after you die, that’s not all this legal field is about. There is another side to estate planning that is just as important: the protection and preservation of assets. This includes minimizing tax obligations on your assets so that your heirs get the most out of your estate after you’re gone. 

Estate planning helps you protect your assets by providing a framework in the event that you’re incapacitated. Though estate planning is vital after death, it also is important during life. 

Asset Protection 

An estate planning attorney can help you minimize your tax obligations (legally) by navigating the tricky tax code. There are loopholes and maneuvers that a savvy attorney will recognize, but it takes a lot of experience to minimize taxes to the full. 

Asset protection also comes in the form of protection against lawsuits. This does not mean protection against getting sued (lawsuits are common in a litigious society like America’s), but estate planning can help take your assets out of the reach of a lawsuit. There are legal vehicles (trusts, for example) that take the assets out of your name and protect them. Once that money or property is beyond reach, there is also a chance that someone’s motivation to sue you might drop.

Wills

Let’s start with one of the most common documents associated with estate planning: a will. A will is a legally enforceable document. This document spells out how you want your assets—whether personal or financial—distributed when you die. The will sets the parameters of and parties to which the property will transferred. This is the easiest and cheapest way to start an estate plan. 

However, a will is, by no means, the be-all, end-all of estate planning. Even with a valid will, you still have to go through the drudgery and expense of probate court. A trust is one way to avoid probate court. 

Trusts

Trusts are three-party fiduciary relationships that involve you (the donor), the person to whom you want to transfer property (the beneficiary), and a third party who holds the property/asset until you want the beneficiary to have it (known as the trustee). There are many, many different types of trusts, but two of the big ones to know are: inter vivos and testamentary. 

Inter Vivos Trust

As you may have guessed (if you have a rudimentary knowledge of Latin), this trust is created while you are still living. You transfer your assets into the trust, and this protects your money while you’re alive. If you choose to make your inter vivos trust revocable, it can be changed, amended, or even cancelled. But, if protecting your assets is the #1 priority, you consider making the trust irrevocable. An estate planning attorney will help determine which is best. 

Testamentary Trust 

Conversely, a testamentary trust is created when you die. In a trust document, you express your wishes as to how you want your property distributed upon your death. When you die, those wishes are honored. A trust is not only a great way to protect assets from legal challenges, it also can help you avoid probate court. 

This brief overview has hopefully helped you realize that estate planning and asset protection offer a lot of protections to conscientious workers looking to safeguard what they have worked their whole life to have.

Visit our website and learn more about estate planning. 

When it comes to the ongoing coronavirus pandemic, we never know how quickly things will change. Many states are still debating whether to send kids back to school, while others have already made the choice to reopen the schools, albeit with some precautions. Whatever the outcome, one thing is clear: you need to make sure your kids are protected for the upcoming school year and beyond. 

There are several different ways in which estate planning and its related legal fields can help you plan for your child’s future and protect them from harm. This article will serve as a guide to the basic legal strategies for keeping your kids safe. 

Trust Funds 

When you think of trust funds, you might assume that they are just for the ultra-wealthy. Images of Ivy League schools and mansions may come to mind. However, that is a misconception, as trust funds are for everyone. 

A trust fund involves three parties: the beneficiary (your kid[s]), the donor (you), and a neutral third party, called a trustee. The donor, which is also called a grantor in some states, will create a trust fund, which holds and manages the grantor’s assets on behalf of the beneficiary. The trustee oversees the fund. The grantor sets the terms and conditions for distribution of the trust fund, as well as how the assets are to be held or invested.

Trust funds can take the form of a simple bank account, where the grantor deposits money that is owned by the trust, as opposed to an individual person. Over time, the fund will grow. You don’t just have to place cash in the trust fund—you can also put other assets like real estate or stock into the fund. 

In order to set up a trust fund, you will need to meet with an attorney. You and the attorney will set up stipulations and name beneficiaries. Examples of stipulations include monthly payments to beneficiaries or restrictions on how beneficiaries can spend the money. You, as the grantor, get to decide these parameters. 

Guardianship 

Next on our list is guardianship. If something happens to you while your kids are still young, the state will need to ensure that a guardian is chosen for the children. By setting up guardianship papers now, you can be the one to make this decision (as opposed to the government). 

The kids’ guardian can be a relative or close friend. The guardian should, obviously, be someone responsible, who can attend to the kids’ day-to-day needs. Above all, make sure that you consult with your proposed guardian before naming them as such.

Tax-Advantaged College Savings Plans

It goes without saying that college is very expensive. Even scholarships don’t always cover every financial expense your child will run into while in college. The IRS offers tax-advantaged college savings plans (known as 529 plans or “qualified tuition plans”) that let you put aside money for your kids’ education. 

These college saving plans often have a lower tax rate, which makes them preferable when compared to other means of saving money. These 529 plans are sponsored by educational institutions, state agencies, or state governments, so they will differ based on where you live and where your kids are planning to attend college.

Review Life Insurance 

If you’re a new parent who has life insurance, make sure your life insurance policy allows your kids to be the beneficiaries if you die. Even if you’re not a new parent, you should check that your life insurance policy is structured in the most advantageous way possible. (And, of course, if you don’t have life insurance, you should absolutely consider buying it).

Again, this list is by no means the be-all, end-all of keeping your kids protected. When it comes to estate planning, there are a lot of ways that you can help your family’s specific situation. Contact an estate planning attorney today and find out more about our services. 

Shark Week is fast approaching, beginning on August 9th and ending on August 16th this year. Shark Week is not canceled, contrary to what some rumors are saying, and Discovery Channel apparently has some awesome new footage for us to enjoy (while safe on our couches, of course). 

Shark Week has us thinking about some of the legal “sharks” we might run into. Luckily, unlike a Great White in the ocean, the law gives you ways you can protect yourself against these not-so-nice characters, as long as you act fast. Here is an overview to protections that are in place in estate planning to keep your and your loved ones’ health and finances safe. 

Protection Against a Bad Power of Attorney 

In some ways, the power of attorney role in estate planning is one of the most dangerous. A bad power of attorney can be considered the “Bull Shark” of misconduct—it doesn’t get the headlines the way the Great White does, but it is responsible for the most attacks. 

A power of attorney is the person in charge of someone’s finances and healthcare when the person is too incapacitated to make these decisions on his or her own behalf. The POA has a lot of power. Luckily, state and federal governments have realized the need to protect citizens—especially elderly, vulnerable people—against power of attorney misconduct. 

Failure to Comply

Perhaps the most common type of power of attorney misconduct is failure to comply. When a power of attorney makes a decision or acts in a way that is not in the best interest and/or is against the wishes of the donor (the person who appointed the POA), that should be brought immediately to the attention of the court. 

For example, if the POA spends the donor’s money on a new car for him- or herself, this is blatant misconduct and theft. By bringing this to the attention of an attorney or elder advocate, the POA can be revoked. The abusive POA can also face criminal charges and/or a civil lawsuit. 

Coercion in Creating the POA 

Another type of power of attorney abuse has to do with the formation of the POA. If a person is forced or coerced into appointing someone as power of attorney against his or her will, that can be brought to the attention of the court and revoked.

There are several ways that a POA can be abusive—colloquially, a POA has even been nicknamed a “license to steal”—but, luckily, contacting an elder advocacy organization such as the AARP or a state ombudsman can put a stop to misconduct. The state can also even bring criminal charges against the bad actor. 

Bad-Faith Will Contests 

A will contest in “bad faith” occurs when someone attempts to challenge or overturn a will without acting fairly and honestly. Perhaps the person knows that the will is valid, but he or she is bringing the contest as a way to pressure the beneficiaries into settling it out of court and giving him or her something to avoid the legal hassle. 

In Florida, if a court finds that you are contesting a will in bad faith, the law explicitly requires the bad-faith party to pay attorney’s fees for the other side. This applies even if your claim was based on law or in fact—bad faith is bad faith.  

Good-Faith Will Contests 

On the flip side, contesting a will in good faith is a valid way to fight misconduct in a will through the legal system. Perhaps you believe that some part of a will is fraudulent. In Florida, you can contest a will through probate court. Usually, you must submit your challenge to the will before the probate process is over. 

Early Prevention: Spotting the Warning Signs

The AARP is an advocacy organization dedicated to helping the elderly. On the organization’s website, the AARP has listed several signs of financial abuse against the elderly. One big “red flag” is when an elderly person starts to show a lack of knowledge about important financial matters. For example, the person might have been sharp and engaged before, but, now, when asked about a large withdrawal from their checking account, he or she is nonplussed. This is a sign that something might not be right. 

Elderly people who are physically frail and/or isolated are at a high risk for elder abuse. Pay attention to “new friends” who pop up out of nowhere. Also, keep an eye on questionable behavior by family members, especially those who have a history of substance abuse, mental/physical ailments, financial problems, and/or lack of employment. According to the New England Journal of Medicine, these perpetrators are most likely adult children or spouses (though they can be anyone). 

Keeping wary of the “sharks” in our lives and the lives of our elderly/disabled loved ones is vital. There are people who may—intentionally or negligently—try to take advantage of those in vulnerable positions. By being attentive and bringing problems to the attention of the court immediately, you can prevent abuse or misconduct.  

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As any cursory glance at the news will tell you, Florida does things a little differently when compared to the other 49 states. Probate court in Florida is no exception. 

One major difference is that you’re almost always going to need a lawyer. In other states, executors of a will (the people charged with managing a deceased person’s estate) can fill out the paperwork themselves and rely on the court clerk’s office to help them. This is not the case with Florida. In Florida, the courts are not staffed to help you with this particular task—you need to hire a probate attorney. 

For executors, this article will serve as a guide to the FAQs of Florida probate court, but this guide cannot replace actual legal advice.

When Don’t You Need a Lawyer?

As you may have noted, we used “almost always” when describing your duty to contact an attorney as an executor. There is an exception. When you’re dealing with a very small estate, you can go through “disposition without administration.” 

Disposition without administration comes into play when the person who paid for the medical bills and/or funeral of the deceased wants the deceased’s assets (of which there are few) released to them. If the person requesting disposition without administration is not the same one who paid the funeral/medical bills, there are consent requirements before such disposition can happen. The catch-22 is that you will likely need to hire a lawyer to figure out whether you can qualify for disposition without administration.

Can’t I Just Change the Title to the Property in the Will? 

If property is the main asset in the estate, you might be thinking that simply changing the title to the property listed in the will is enough, if you record the will. However, title insurance underwriters in the state of Florida won’t recognize this legal maneuver as a valid way to convey title. 

First, the underwriters don’t know if this change is fraudulent. The deceased person is, well, deceased, so they don’t get to affirm that the change in title is what they really wanted. Secondly, there are certain situations where property cannot pass this way—and these situations almost always involve creditors.

Can’t Find the Heir—Now What? 

A “missing heir” is the term used to refer to a person who is listed in the will as the beneficiary but is now unavailable and cannot be found. Under Florida law, the executor can deposit the missing heir’s share of the proceeds into the court’s registry after selling the property. 

Note that the missing heir is not the same thing as a missing owner of record. If the latter is not dead/has not been declared dead, then Florida probate code is inapplicable. The situation gets much more complicated, and it’s quite likely that a conservator will be appointed. 

Summary Administration

Let’s say that the estate didn’t qualify for disposition without administration. There is a chance that it might qualify for summary administration, which requires a lawyer but is also faster and cheaper. Florida has a definition of “homestead” that allows unlimited value. So, if the estate has a very expensive homestead property but little to nothing else, this estate can go through summary administration. 

Another reason an estate could qualify for summary administration is if the deceased has been dead for over two years. In Florida, there is no deadline by which probate must be started. You could start probate fifty years after the deceased’s date of death (however, that isn’t exactly ideal). 

Do I Have to Go Down to Florida to Appear? 

It’s understandable, during the current pandemic, that you would not want to travel down to Florida. Luckily, your physical presence is almost always not required for probate unless there is a dispute that requires an actual hearing. Generally, probate can be done via email, “snail mail,” phone, and other digital means. 

If this seems confusing, don’t worry, as your lawyer will be able to explain in layman’s terms what you need to do in order to wrap up an estate quickly and efficiently. Contact a probate attorney for further guidance, even if you believe your estate could fall into the “disposition without administration” category.

Read more about Florida probate. 

For a while, the idea of a “trust” or “estate” was thought of as a tool of the wealthy who had large mansions and companies. However, estates and trusts are for everyone, and trust administration is a top that can (and likely will) come up for every family, regardless of financial status. In this article, we will give you an overview of trust administration. This is not intended to replace the advice of an attorney, as every family is different and has their own specific needs. 

What is a Trust? 

A trust is a tri-party fiduciary relationship. The first person is called a “trustor.” A trustor transfers the property to the second party, who is called a “trustee.” The trustee holds the property for the benefit of party #3, who is known as the “beneficiary.” The trustee will hand over the property to the beneficiary at a date predetermined by the trustor. Usually, the beneficiary gets the property after the turn a certain age or upon the death of the trustor. 

What is Trust Administration? 

Trust administration refers to the rights and duties of the second party—the trustee. The trustee must manage the trust according to the terms and conditions of the trust document that the grantor has written. The trustee must manage the trust for the benefit of the beneficiary. A trustee is always encouraged to work alongside an attorney in order to make the management process easier and clearer. 

Who Can be the Trustee? 

It is possible to name the same individual to the position of trustee and the position of executor of your estate. There are some who recommend that two different people be the trustee and executor, as a way to put checks and balances in place. But, if you name the trustee and executor as the same person, it will minimize legal expenses, as the lawyer only has to communicate with one person. 

However, placing the same person in both roles requires a massive amount of trust in the individual. The individual must be responsible, as he or she is personally liable for the trust in certain situations. 

Personal Liability 

Trustees are obliged to strictly abide by the trust’s terms. If the trust prohibits or mandates something, the trustee must do everything in his or her power to stick to the terms of trust. 

A big taboo in trust administration is using trust assets for your own benefit. This and other trust-related wrongdoing will lead to a court holding the trustee accountable, whether the court mandates repayment or strips the trustee of their title. A trustee who commits wrongdoing can even be sued in a court of law for restitution and damages. 

Can You Decline an Appointment? 

Both offices have a lot of responsibility. If you are appointed to either and don’t feel that you can take on that responsibility, you are in luck, as declining is perfectly legal. If you are offered the job of executor and decline, the court will name someone else in your stead. If you decline the job of trustee, the grantor can just replace you with someone else. Trust administration can get complicated, so there is no shame in declining the position if it seems outside your wheelhouse. 

Trust administration has the potential to either be very simple or very complex (like everything in law, really). Trusts and trust administration are topics about which you should contact an attorney, as opposed to going on DIY legal sites. It’s important to ensure the trust is done correctly to avoid any unintended results.