Civilized Will Preparation in South Florida

In South Florida, something as personal a preparing a will often turns into a battle of wills for too many couples and families.  The creation or updating of an estate plan necessitates the contemplation of money, death and extended family.  These are topics that can cause fighting in even the strongest of families. To avoid any conflict with your partner or spouse over the planning of your estate, here are a few tips to following when discussing the subject.

Try not to be too critical of your partner’s family members. Many fights that arise over the drafting of a will arise out of perceived attacks on relatives rather than which relative will receive what after the testator dies.  If you have strong feelings that one particular relative should be left out of your will or you disagree with your partner’s choice of South Florida executor, you need to be very diplomatic and describe your position without speaking negatively about the specific relative.  For example, you may explain that you wish to give a particular relative less than an equal share of your estate because other descendants need the money more or will put it to better use.  Be sure not to tell your partner that you believe this person does not deserve the money, even if they really don’t.  You should explain that you are not disagreeing with your partner’s choice of executor or trustee because there is something wrong with this person (even if there is), but because you think that there is someone else even better equipped to handle the task.

Propose compromises rather than arguing for one side or the other. There is a greater likelihood of fights occurring when one partner or spouse feels like his or her voice is not being heard by the other.  One preemptive solution to this problem is to listen to your partner’s positions and look for some kind of middle ground, even if you completely disagree with their decision.  For instance, if you disagree about how to break up the estate among relatives due to some of the relatives being less deserving than others, you may leave this less-than-worthy descendant a family heirloom of sentimental value, even if it has very little financial value.  Another solution could be to establish a South Florida charitable trust that provides for the family as one partner wishes but later donates whatever remains to charity, as the other wishes.

Another possible compromise with re-married couples might involve giving a small percentage of the estate to a partner’s children from a former marriage rather than shut these descendants out entirely.  It might also be a good idea to include a statement in your will explaining that the descendants who received less are no less loved.  If you and your partner or spouse cannot agree on a South Florida executor for your will, you might each name your ideal candidate for executor and make them co-executors rather than selecting one over the other or even name a mutual friend or a South Florida bank as executor rather than argue over which family member to select.

Discuss any issues that are potential landmines with your partner or spouse before meeting with your estate planning attorney. Visiting your South Florida estate planning attorney just so you and your partner can argue in front of him will increase everyone’s tension level and waste your time and the attorney’s time.  Instead of waiting to discuss these situations at the attorney’s office, you should set up a time to sit down with your spouse or partner before the meeting and discuss who should be executor, who should be responsible for any minor children, and who should receive what from each of your estates.  Even if you cannot compromise on every issue, this pre-meeting discussion will allow you to clearly and calmly discuss any disagreements with your attorney at the free consultation.  At that time, he may be able to offer some acceptable solutions.

Discuss each of your goals and come up with one primary objective. What do you and your partner most want your will to accomplish?  If you can agree on one primary objective, you will be less likely to bicker over the smaller details.  If you have minor children, you and your spouse can likely agree that the primary goal of your will is to ensure that the children are taken care of.  Both spouses will be mainly concerned that the children are raised properly.  If your partner protests that giving one of your family members custody of the children will anger or disappoint members of their family, simply remind your partner of the primary goal and explain why living with your choice of guardian would be in the best interests of the children.

Remember to continuously use the term “for now.” You and your partner should have your estate plans revised every time there is a change in your family or in the estate tax law.  Your will can and will be amended in the future.  Reminding your spouse or partner that the decisions made today are not necessarily permanent can remove some of the emotion from the discussion.  For example, if your partner wishes to make her sister the guardian of the children but you would prefer them being raised by your brother because he is married and she is single, you can assure your spouse that the topic can be revisited should her sister get married.

For more information on successfully discussing your estate plan with your partner or spouse, please contact the South Florida estate planning attorneys of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com.  Let us protect what you value most.

Estate Planning Information for Cohabitating Unmarried Couples

Living together while remaining unmarried has never been more popular. Over 6.4 million opposite-sex unmarried couples currently live together.  This translates into 12.8 million people. There are an additional 750,000 same-sex unmarried couples in the United States which translates to an additional 1.5 million people. This is a whopping 92% increase since 1990. Over half of all unmarried households have children. If you are part of a cohabitating unmarried couple, it may be comforting to know that you have plenty of company. However, this doesn’t mean that you can ignore how the law affects your relationship. Here are some tools that unmarried and same-sex couples can use to avoid the “grave” danger of intestacy.

Domestic Partnership Agreements: Domestic partnership agreements set out the parameters of a relationship and specify the rights and responsibilities of each partner. They are similar to prenuptial agreements and are well-advised for unmarried couples who live together, be they same-sex or opposite sex.

Last Will and Testament: When you die without a formal will, the state of Florida will provide a will for you and distribute your assets as they see fit. This is known as “intestate succession” and it provides the least amount of protection to your family. Same-sex or unmarried couples are not recognized by Florida intestacy statutes. Thus, upon your death, your partner will have no rights to your estate. The chance for a will contest may be greater in same sex and unmarried relationships, as family members may not understand the choices you have made.

Revocable Living Trust: A living trust may be a good option for same-sex or unmarried couples, due to its private and expeditious nature. A living trust also helps to avoid probate in multiple venues if you own property in more than one state. A living trust can hold both individual and shared property and goes into effect as soon it is funded. In a revocable trust, you (as the “grantor”) retain control over the trust and its assets while you are alive. If you do not wish for creditors to access the trust assets, an irrevocable trust is a better option. A pour over can supplement a living trust and should be used to distribute any property not previously placed into the trust.

Durable Power of Attorney: A power of attorney for legal or financial matters allows you to appoint your partner to manage your affairs, should you become unable to do so. It is also helpful as evidence of your testamentary intentions and the nature of the relationship, in the event of a will contest.

Living Will and Health Care Surrogate: A living will specifies your wishes for medical care and artificial life support. Without specifically declining artificial life support through a properly executed living will, the hospital must keep you alive by any means necessary, no matter how much it costs or what your true desire is. A health care surrogate designation should accompany the living will because it appoints someone to make medical decisions on your behalf in the event that you are unable to communicate your wishes and specifies your wishes regarding artificial nourishment. It is crucial to have the health care surrogate in place because your partner will have no legal rights regarding your care without one.

Joint Tenancy: Same sex and unmarried couples can benefit from owning real estate together as joint tenants with rights of survivorship, which means that when one partner dies the other can take sole ownership of the property even without a will. This designation can avoid estate taxes, capital gains taxes, gift taxes, and probate.

For more information about the legal rights and protections of unmarried couples, please contact the estate planning attorneys of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com.  Let us protect what you value most.

Many people are under the false impression that if you write down what you have and who you want it to go to when you die, you are covered and don’t need an official will.  This is a dangerous misconception.  Holographic wills are not valid in the state of Florida.  So what exactly is a holographic will?  While the name might lead you to believe that it has something to do with a third dimension, a holographic will is a will that is entirely in the testator’s handwriting and signed by the testator.

In Florida, according to section 732.502 of the Florida statutes, in order for a will to be valid it has to be signed (or acknowledged) at the end by the testator in the presence of two witnesses who must be in the presence of the testator and the presence of each other when signing.  If there are two witnesses, but each sign separately, and do not see both each other and the testator sign, then the will is invalid.  Moreover, the will must then be notarized by a licensed Florida notary that witnesses the testator sign the will and then witnesses the witnesses sign the will.

Some states have a rule that if a will is executed by a resident of another state and that will would have been valid in that other state at the time it was executed, then it will be valid in the new state too. Florida has a similar rule.  According to Florida Statute 732.502, “Any will, other than a holographic or nuncupative (oral) will, executed by a nonresident of Florida, either before or after this law takes effect, is valid as a will in this state if valid under the laws of the state or country where the will was executed.”

In other words, even if a Holographic will would have been valid in another state, it still will not be accepted in Florida. Of course, if the will is properly witnessed and notarized, then it is valid in any state.  A “nuncupative” will is an oral will.  They are not valid in Florida either, even if videotaped or put on YouTube for the world to see.

For more information about creating a valid will and protecting your family after you are gone, please contact the law offices of Wild Felice & Pardo, P.A. at 954-801-4635 or via email at info@wfplaw.com.  Let us protect what you value most.

While the benefits received from a life insurance policy are not treated as income for tax purposes, if the life insurance policy was owned by the deceased within three years of his death, the estate of the deceased will be taxed on any amount of the insurance proceeds above the estate tax threshold.  Okay, now in plain English.  If you take out a life insurance policy on your own life, fund the policy during your life, and leave the proceeds to your spouse or other family member, they will owe big time taxes.  So what can you do to avoid this tax?

Creating an Irrevocable Life Insurance Trust (or “ILIT”) will protect your family from the burden of estate taxes upon receiving the benefits of the life insurance policy.  This estate tax savings can be accomplished either by the insured establishing an ILIT and giving existing life insurance policies to the trust, or by the trust itself purchasing a new policy on the insured’s life.  The insurance will be excluded from the insured’s estate because the insured will not own the policy at the time of death.

There are three requirements: (1) the insured must not own or retain any incidents of ownership in the insurance, (2) the proceeds must be payable to the trust rather than the estate, and (3) if policies are given by the insured to the trust, the insured must survive the gift by 3 years.  To avoid any gift tax consequence, simply borrow against the existing life insurance policy for the amount of equity/value already attained by the policy since instituting it.

An ILIT also provides the benefit of instructing who gets the money, at what age they get the money, and under what conditions they can get the money.  For instance, you wouldn’t want your 7 year old to inherit $2 million in one lump sum.  How much candy and video games do they actually need?  Instead, the ILIT can name a trustee and pay for the needs of the child until the child reaches a suitable age for inheritance, such as 18, 21, or 25.  You can see that your child is cared for but not given the opportunity to frivolously spend away the inheritance.

For more information on the benefits of life insurance and your ability to save your family hundreds of thousands of dollars in estate taxes, please contact the attorneys of Wild Felice & Pardo for your free consultation at 954-944-2855 or via email at info@wfplaw.com.

Although the name sounds like a description for a poorly drafted trust, a Crummey trust is actually an estate planning tool that allows the settlor to utilize the annual gift tax exclusion when gifting into the trust.  The trust beneficiary must have notice of the gift into the trust and retain the right to withdraw the gift from the trust.  However, this right can expire after a reasonable length of time, usually 30 or 60 days.

The Crummey trust allows the buildup of a large trust fund over a number of years if the beneficiary does not withdraw the annual gifts into the trust.  Another good use of the Crummey trust occurs when the trustee purchases life insurance on the life of the settlor and pays the premiums with the annual gift into the trust.  This creates the potential that a large trust fund will be created when the insurance is paid to the trust on the settlor’s death.  Because the Crummey Trust is irrevocable, the trust is not considered part of the settlor’s estate and thus is not subject to the Federal estate tax.

To learn more about the Crummey Trust and other estate planning techniqes that can be implemented to preserve your wealth, please contact our estate planning attorneys at 954-944-2855 or via email at info@wfplaw.com.

Florida Residents: Protect Your Assets