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?

Most individuals that contemplate estate planning do so because they want to protect their family and provide for their loved ones.  Yet, how does an estate plan differ if your loved one is either physically disabled or has special needs?  Leaving a legacy behind for a disabled family member requires careful planning by a skilled estate planning attorney.  If not done properly an estate plan meant to protect a disabled individual can actually harm them.  These problems can be avoided by creating a Special Needs Trust.

Individuals with disabilities often qualify for government assistance.  They can likely qualify and benefit from Supplemental Security Income, Medicaid and subsidized housing to name a few.  However, leaving your loved one assets or a large sum of money by way of a Last Will and Testament or a Revocable Living Trust can actually cause them to lose these benefits as they would no longer qualify.  By creating a Special Needs Trust that holds the assets for their benefit you then protect their eligibility and secure their future.  A trusted individual or financial institution would act as Trustee and manage the assets on behalf of your disabled loved one.  Since the Trustee controls the money and not your family member the trust assets would be ignored when considering eligibility for governmental assistance.  The end result is your beloved family member enjoying the type of life you envisioned – benefiting from what you’ve left them while still receiving governmental assistance.

Don’t delay on securing your disabled love one’s future.  Call the South Florida Office of Wild, Felice & Partners at (954)944-2855 today for your free consultation.  For more information on Estate Planning, Asset Protection, Probate Administration and Elder Law, please visit our website at www.wfplaw.com.

It’s A Wild World.  Are You Protected? SM

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.

If you haven’t considered life insurance before then today should be the day you do!  Life insurance provides assurance for your family after you die.  Funeral expenses, business expenses, unpaid mortgages and other expenses can cause the surviving family members to suffer a great financial burden.  Life insurance can be a way to alleviate this stress.  However, since you own the life insurance it will contribute to your estate’s overall value upon your death which means your family may face unnecessary tax issues.  Luckily, this too can be remedied by seeking the help of a qualified estate planning attorney.

An Irrevocable Life Insurance Trust (ILIT) is an estate planning tool commonly used to remedy the above scenario.  By creating this type of trust, you allow your family to still benefit from the life insurance without the hassle of a possible tax issue.  The ILIT transfers the benefit into the trust and you relinquish all control of the life insurance policy.  Relinquishing control is required by the IRS if you wish to avoid estate taxes.  Doing so removes the life insurance from your estate and decreases the taxation your family may potentially face.  The end result is an increase in overall asset protection for the family.  When creating the ILIT you must designate an individual you trust to distribute the assets (a Trustee) as well as designate a beneficiary, which can be a spouse, child or any other appropriate individual.  You may also include detailed instruction with respect to how you wish your trust to be managed.  Once in place the terms of the ILIT cannot be changed.  Upon your death the ILIT will transfer the funds to your beneficiaries just as a Revocable Living Trust would but what they will inherit will fall outside the IRS.  This estate planning tool offers ultimate tax free protection for the family.  Whether you left a home with an unpaid mortgage or a business with a hefty overhead, your family will be able to tackle the financial burden with ease.

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

It’s a Wild World.  Are You Protected? SM

With all the media buzz over the recent passing of musical genius Prince you’re likely hearing a lot about Probate and may be wondering what the heck it is and why you should care.  Florida has one of the worst Probate systems in our country which is why it is so important to take the time to understand the process and plan accordingly.

What is it and why should I care?

If you pass away with assets left by Will then your assets must go through the Probate process.  Probate is the legal process of proving a Will in court.  The size of your estate will determine which type of probate administration will be necessary.  A smaller estate (one where the assets are valued at less than $75,000) will require a Summary administration.  Summary administration is less costly but may still last as long as a year, which means your beneficiaries will have to wait quite some time before receiving whatever is you left them (no matter how much they may need the assistance).  If your estate is worth more than $75,000, then your estate will require a full administration which is very costly and can take years before it is finished.  At a time when everyone should be focused on grieving and healing, they will instead be forced to deal with the judicial system and related stress that accompanies it.

Probate is time consuming, costly and offers no real benefit to the family members left behind which is why you should really consider avoiding it all together.

How can I avoid Probate?

Probate avoidance can be accomplished in a number of ways but the most favorable tends to be through a Revocable Living Trust.  By creating a Revocable Living Trust you not only ensure Probate avoidance but you remain in control of how your assets will be distributed.  If you die without an estate plan in place, you die intestate – which means that Florida intestate succession laws will decide who gets your assets.  By being proactive you remain in control of your assets, may be able to reduce estate taxes, can name guardians on behalf of your minor children and, of course, avoid probate.

For more information on Probate, Estate Planning, and Asset Protection, visit our website at www.wfplaw.com or call (954) 944-2855 for your free consultation.

It’s A Wild World.  Are You Protected? SM

Being married is great:  you have someone who is obligated to laugh at your jokes, compliment you from time to time and who will binge watch TV shows on Sundays with you.  Perhaps one of the best benefits from being married, however, is the Unlimited Marital Deduction.  The Unlimited Marital Deduction allows for one spouse to transfer an unlimited amount of assets at any time free from tax.  This means that whatever one spouse leaves to their surviving spouse at death will be transferred, tax free!  This is great news for everyone! Well, almost everyone.  Unfortunately, the marital deduction does not apply to noncitizen spouses.  A noncitizen spouses will have to pay taxes just as anyone else who may inherit from the decedent.  If your estate exceeds the federal exemption amount ($5.45 million) this can truly become a nightmare.  Have no fear, there is a solution!

Enter the Qualified Domestic Trust, or QDOT Trust.  A QDOT Trust is used for noncitizen spouses in this situation and provides relief by deferring the federal estate tax that would have been due at the time of their spouse’s death and, instead, leaves a large amount of money behind for their benefit.  When the first spouse passes away, their assets will go into trust instead of directly to the surviving noncitizen spouse.  While the noncitizen spouse will not own the assets they can enjoy benefits throughout the remainder of their life, such as any interest that the trust may generate.  At their death the assets will then pass on to the other listed beneficiaries.

If this scenario seems familiar, then call (954)944-2855 for your free consultation today.  Protect yourself and your family by providing ultimate peace of mind!

For more information on Estate Planning, Asset Protection and Probate please visit our website at www.wfplaw.com.

It’s A Wild World.  Are You Protected? SM