When you’re 40, chances are you’re not the same person you were at 20, and your estate plan should reflect the changes you’ve experienced. Here’s a rundown of the estate-planning tools you should have if you’re just beginning your life’s journey, midway through or approaching the final leg.

Young, single and carefree
If you’re over 18 and unmarried, execute four documents to make sure your loved ones can carry out your wishes:
1. A general durable power of attorney enables you to designate who will control your finances if you become incapacitated, whether it’s your parents or another loved one.
2. A health care proxy allows you to designate who will make medical decisions on your behalf in the same situation.
3. A living will lets you lay out your wishes regarding life-sustaining medical treatment.
4. Finally, a Health Insurance Portability and Accountability Act, or HIPAA, release allows your designated agent to discuss your medical condition without violating patient privacy laws. Without those documents, your loved ones may be forced to go to court to seek guardianship over you to assert those controls.

Single, but committed
If you’re in a long-term relationship but unmarried, you need to create a will or trust if you want your life partner to inherit your possessions.

We’re engaged!
A prenuptial agreement isn’t only for people who have a lot of money; it’s essential for everybody. A lot of people divorce because they’ve never had conversations about money. A prenuptial agreement forces people to engage in this financial conversation.

Just married
Revise your durable power of attorney, health care proxy and HIPAA release if you want there to be no question that your spouse should control your financial and medical decisions if you become incapacitated. If you don’t already have one, this is also the time for a will or trust. Rather than risk a fight between your spouse and parents over who should inherit, have a will or trust definitively state who should receive your assets. Also, if you own a home, you should purchase a term life insurance policy that will pay off your mortgage if one spouse dies.
Finally, change your beneficiary designations on such things as health insurance and investment plans so they pass to your spouse. A lot of people think when they get married, those things change on their own, and they don’t.

Children
If you have children, update your will to nominate a guardian to step in if you and your spouse pass away. You should also include provisions in your will or a separate revocable trust so that your child doesn’t inherit everything at the age of 18. A revocable trust allows you to appoint a trustee to handle any money your child inherits. The trustee can use it to support your child as the child grows up, and you can specify at what age your child can receive the money, along with any reasons your child should get it before that age, such as starting a business or buying a house. You can also specify that the trustee can withhold money if your child has a gambling problem, is in the midst of a divorce, or there’s another situation that makes it inappropriate to inherit.
You’ll also need a separate guardianship nomination — sometimes called an emergency guardianship proxy — that nominates a guardian to care for your child if both parents are incapacitated. That’s helpful in simpler situations as well, such as when both parents take a vacation and a child needs emergency medical treatment.
Each time you have another child, be sure your estate planning documents address all of your children, and don’t forget to increase your life insurance. You need about $1 million to care for a child from birth to college. If you have a special-needs child, you should have your attorney set up a special-needs trust, which allows you to provide for your child without disqualifying the child from government benefits.

Divorce and Second-Marriages
If you’re separating or divorcing, you probably don’t want your spouse to still have all the authority to make decisions on your behalf and access your medical and financial information. You should revoke those documents, including beneficiary designations, or sign new ones. A divorce decree doesn’t magically change those things.
If you remarry, revise your will and trust documents to reflect the proper beneficiaries. Most people want to share with their new spouse but also want to provide for their separate children at their death.

Middle-Ages
As you reach your 40s and 50s, you should consider purchasing long-term care insurance, which covers the cost of long-term care or a nursing home.

Retirement
Review designations on your durable power of attorney, health care proxy, and HIPAA release to be sure the people you’ve named are still in your life and willing and able to serve in that role. A lot of people at this stage also start planning their funeral to make sure that’s in order.

No matter what your age or asset level, you need to have some sort of estate plan in place. Please take the opportunity to call our office and schedule a free consultation to discover how best to protect yourself, your assets, and your family.

A Special-Needs Trust is a trust established for the benefit of a disabled beneficiary who is entitled to receive governmental assistance.  The intent of the trust is to provide for the beneficiary above-and-beyond the supplemental assistance without accidentally turning that Federal aid “faucet” off.  The correct drafting of this type of trust is very important since errors can result in the loss of government assistance or trust income. 

The payment of income and principal should be entirely left to the discretion of the trustee and the beneficiary should never be given the option to act as their own trustee.  In addition, cash payments should never be made directly to the beneficiary.  Instead, the trust should simply pay for the items that are needed by the beneficiary.  This is important because any money the beneficiary receives may reduce their Supplemental Security Income or may even cause a total loss of Medicaid benefits.

The beneficiary, or their guardian, will ask the trustee to make a distribution.  The trustee will consider whether or not he or she is permitted to make the distribution and whether making the distribution is in the best interest of the beneficiary.  If the trustee agrees to the distribution, the trustee will pay for the good or service directly from the trust account to the vendor. 

Protective wording should be inserted in the trust to clarify that the trustee is to expend income and principal only after Federal, state, and local public assistance is received and exhausted.  The income and principal should only be used for the benefit of the beneficiary.  A spendthrift clause should also be included in the trust to avoid the possibility of the government’s attaching the trust property to be reimbursed for its public assistance payments.

Choosing an attorney to draft a Special-Needs Trust is not always an easy task.  Drafting a Special-Needs Trust is highly specialized and you want someone who is experienced in this area.  Choose someone whom you can trust and you feel comfortable with because the Special-Needs Trust will last for the lifetime of the beneficiary and your attorney will be a crucial part of your financial team. 

Michael D. Wild is a Florida attorney specializing in the areas of estate planning and asset protection.  For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation.  Protecting what you value most.

Congress hasn’t renewed the Economic Growth and Tax Relief Reconciliation Act of 2001, otherwise known as E. G. T. R. R. A. consequently the estate tax will go back to 55% again next year. Even small estates will have to expect a possible estate tax at death. With this in mind, it becomes imperative that individuals planning their estate, incorporate, in combination with basic revocable trust planning, several of the more advanced estate planning strategies.

 While the the estate tax related reasons for proper estate planning are certainly valid, they should not be your sole motivation. Even while the E. G. T. R. R. A. was in effect, the more successful estate planning attorneys learned that proper estate planning was justified for reasons beyond purely tax savings.  In the interim, while we await the decisions of our leaders we experience a continued uncertainty.

The estate tax will continue to be a hot political issue beyond 2010. There are way too many winners and not enough losers if EGTRRA is allowed to sunset.  Let’s examine the players in this, and see just what it is they have on the line:

Democrats – Increased revenues may help offset continued increasing budget deficits.

Republicans : Campaigning for a repeal of the estate tax continues to be an effective fundraising issue. A permanent resolution of the estate tax issue would “kill the Golden Goose.”

Insurance Companies – Use of ILITs funded by life insurance policies will again become a favorite estate planning tool to pay for the estate tax and preserve the estate.

Charities – estate tax motivated charitable planning will again become popular.

As for the States, they are counting on the return of the estater tax to boost dwindling revenues.

Losers, should the estate tax return: Those with a vested interest in seeing a permanent end to to the estate tax are the heirs of those people who have failed to plan.

The political posturing of the estate tax issue has changed from the early Bush years of calls to repeal the “unfair and unjust death tax” to “not giving a tax break to the very wealthy.” It is unlikely that we will see bipartisan political agreement on any meaningful long-term “estate tax reform” in the near future.

What this means to you is continued uncertainty about the pending return of the estate tax. For those people lucky enough to live in South Florida, the estate planning attorneys of Wild Felice & Pardo can effectively create an estate plan that will protect your beneficiaries from any possible estate tax and make certain to avoid probate entirely.

Michael D. Wild is a Florida attorney specializing in the areas of estate planning and asset protection. For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation. Protecting what you value most.

Everyone needs a basic estate plan. This involves putting the documents in place that will take care of you in case you become disabled and will take care of your loved ones once you pass away. However, there are certain circumstances where additional planning is necessary. This is where Advanced Estate Planning comes in. Here are some of the areas Advanced Estate Planning covers:

1) Tax Planning: If your estate is large enough, you’ll need to work with your estate planning attorney to minimize or reduce estate taxes and generation skipping transfer (GST) taxes.

2) Asset Protection Planning: Your estate planning attorney can help you structure the way you hold title to your property so as to limit creditors’ ability to access it.

3) Planning for Disabled Beneficiaries: A Special Needs Trust can help you leave money to a disabled beneficiary without interfering with his or her government benefits.

4) Planning for Beneficiaries with Special Circumstances: If you have a beneficiary with trouble handling finances or may be in a rocky marriage, your estate planning attorney can help you establish a trust that will allow that beneficiary access to money or property without leaving him an outright distribution. This will help protect his or her legacy in case of divorce proceedings or creditors’ claims.

5) Business Succession Planning: If you’re the owner of a closely held business, special planning is required to smooth the transition of ownership in the event of your disability or death. Your attorney can help you anticipate potential problems and tailor solutions to meet your needs.

For more information about estate planning and asset protection techniques and to schedule your free consultation with one of our attorneys, please contact the attorneys of Wild Felice & Pardo at 954-944-2855 or via email at info@wfplaw.com.  Protecting what you value most.