Estate Planning FAQ
Boca Raton Estate Planning Attorney: Your Questions Answered
What is estate planning?
Estate planning is a process by which a person designs a strategy and prepares documents to conserve, protect, and distribute estate assets before and after death for the benefit of loved ones and charities, taking into consideration the effect of state and federal tax and administrative laws and regulations. It can also involve planning for the use of your assets for your care if you become unable to manage your affairs during your lifetime.
On the financial side, a good estate plan coordinates what would happen with your home, your investments, your business, your life insurance, your employee benefits (such as a 401K plan), and other property in the event you became disabled or when you die.
On the personal side, a good estate plan includes directions to carry out your wishes regarding health care matters, so that if you ever are unable to give the directions yourself, someone you select would do that for you, and know when you would want them to authorize or refuse heroic measures.
What is an estate?
An estate consists of all the property a person owns or controls, whether in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust, and all other monies that would be generated on the person’s death, such as through life insurance.
An estate includes:
- Life insurance, pension benefits, annuity contracts, IRAs, all debts and obligations owed to others real property and things attached to it (houses, buildings, barns, etc.);
- All personal property (including automobiles, bank accounts, stocks and bonds, mutual funds, stock options, cash, furniture, jewelry, art, collectibles, etc.);
- All businesses and business interests (sole proprietorships, partnerships, corporations, joint ventures, and the goodwill, inventory, tools and equipment, accounts receivable, and other business property, etc.);
- Powers of appointment (the right to direct who gets someone else’s property); and,
- Claims you have against others.
Do I need an estate plan?
You should have an estate plan if you:
- Care about who inherits your property;
- Care about your health care treatment;
- Are the parent of minor or disabled children; and/or you want to avoid the public proceedings of a possible guardianship and probate.
A properly designed estate plan may:
- Provide instructions for your care and that of your loved ones in case of your disability;
- Be effective if you move to or own property in another state;
- Avoid probate;
- Keep your affairs private and confidential;
- Control all your property, including pensions and life insurance;
- Allow you to leave explicit instructions for the care of your loved ones;
- Create protective trusts for your young children, special needs children, adult children, and grandchildren; and,
- Provide federal estate tax planning and save professional fees and court costs.
With the help of a Boca Raton estate planning attorney at the Walser Law Firm, you can create an estate plan that will protect you and your family from guardianships, probate, and that will allow you to do valuable tax planning.
If my estate is small and my assets are worth less than the federal estate tax threshold, then why do I need more than a basic will?
Even though you may not have a multi-million dollar estate, you may want to protect your loved ones through an estate plan. Family situations in which there is the potential for discord (such as second marriages when there are children by the first marriage) call for the use of more advanced estate planning techniques including trusts. Those techniques are also useful if you desire to have a dispositive plan that does more than simply divide your assets and leave them outright to each beneficiary.
The Walser Law Firm can assist you with creating an estate plan that is tailored for your situation and that will give you peace of mind.
What is a will?
A will declares who shall inherit an individual’s assets (the beneficiaries) and who shall be responsible for distributing them to such beneficiaries (the personal representative). For young parents and couples, a will can also be used to appoint a guardian for their minor children and a trustee to manage the children’s money until they are old enough to handle it themselves. A will only becomes effective upon your death, and after it is admitted to probate.
What is a pour-over will?
A will used in conjunction with a Revocable Living Trust to dispose of any property titled in the decedent’s name alone at the time of death which was not transferred to the trust. The pour-over will also revokes all prior wills, but unlike traditional wills it does not contain detailed dispositive provisions; rather it directs distribution of all individually owned property to the trustee of his or her trust. The trust instrument contains detailed instructions relating to the distribution of the property. Like all wills, a Pour-Over Will must be admitted to probate to be effective.
What if I have a will that was made in another state?
Wills are governed by state law. You should have your out-of-state will reviewed by a Florida estate planning attorney to be sure it will operate effectively in Florida.
What happens if I die without a will?
If you die without leaving a will, you risk that your property will not be distributed as you desire. Your assets will be distributed according to the rules of your state’s “intestacy” statute, not by how close one was to you. Therefore, longtime friends or caretakers will not receive any of your estate.
Even when the heirs at law are the same as you would have selected yourself, there is no advantage dying without a will. For example, you lose the opportunity to designate a personal representative, trustee, guardian for minor children, and to do valuable tax planning.
With a well-drafted will you can avoid legal pitfalls, name a personal representative of your estate, name a guardian for your children, establish trusts, and minimize probate-related costs by providing for independent administration. Dying without a will may cause unexpected costs and delays and undesired results for the decedent’s family.
When should I start my estate plan?
The only time that you can prepare and implement an estate plan is while you are alive and have legal capacity to enter into a contract. If you are unable to manage your own affairs or suffer from a disability which affects your legal capacity, your estate plan may be effectively challenged by those who assert that you lacked capacity at the time the documents were created, that you were subjected to fraud, coercion or undue influence during the creation and implementation of your plan.
The best time to start an estate plan is now, while you have the capacity to do so.
What information do I need to provide a lawyer to create a will or trust?
First, you will need to provide your family details, such as your current marital status, the names and ages of your children and the other beneficiaries of your estate, if any. These are the persons or organizations who will inherit your estate. If you plan to leave property to your children, you will need to decide at what ages the children will actually receive the property they inherit. You also must decide the shares of your estate that each beneficiary will receive.
If you have minor children then you must choose a guardian. This is the person who will take care of your children should you and your spouse die before your children become adults. The guardian will raise your children and manage their money.
You also need to provide a list of your assets and their approximate values in order to determine the most effective documents, such as the type of trust or trusts, to use in your estate plan.
What are some of the decisions that I will have to make in order to set up my estate plan?
An estate plan consists of one or more documents that set forth instructions. Some documents are used to control health care decisions, others control your property in the event of your incapacity, and still other documents will control the distribution of your property in the event of your death.
The first thing that must be decided is who you would like to appoint as your attorney-in-fact to make health care decisions and as your attorney-in-fact to handle your financial affairs. They may be the same person or persons, or different people on each document. Two people may be appointed to make decisions together on your behalf, or you may choose to have alternates.
Next, it must be decided who you would like to inherit your estate, also called beneficiaries, and in what shares under your last will and testament or trust. Consideration should also be given as to how the beneficiaries receive their inheritance. Should everyone receive his or her entire bequest in one sum, or should some individuals receive distributions over time? Also, if you have concerns about creditors or saving estate taxes for a beneficiary, it may be beneficial to leave bequests in further trusts for beneficiaries. As part of your last will and testament you must also appoint a personal representative or co-personal representatives who will administer your estate. This includes hiring an attorney to represent the estate, collecting your assets, paying your debts and taxes and distributing your assets to the beneficiaries. If you create a trust then you must appoint a trustee or co-trustees who will make discretionary distributions of income and principal to your loved ones.
What are some of the common estate planning documents?
Several of the following documents are typically used as part of the estate planning process:
- Simple or Complex Will
- Pour-Over Will
- Revocable Living Trust
- A-B Trusts
- Irrevocable Gift Trust
- Spendthrift Trust
- Durable Powers of Attorney Health Care Surrogates
- Living Wills
- Beneficiary Designations under retirement accounts and insurance policies
Please contact the Walser Law Firm when you are ready to create an estate plan that is customized for you and the needs of your loved ones.
When should I change my estate plan?
An estate plan should be updated when there are changes in the testator’s beneficiaries, property, or family status (i.e. marriage, divorce, birth or adoption of a child, etc.). This can be accomplished by executing a proper amendment (a codicil) to modify the existing will or by canceling (revoking) the existing will and then executing a new one. It is not advisable to update a will by writing or making changes on it because such revisions may be totally ineffective.
Be aware that a will can also be canceled to some extent if the testator is divorced after making the will. In such a case, gifts to the ex-spouse in the will, as well as appointments of the ex-spouse as executor or trustee, are void and will not be recognized. However, an ex-spouse who was designated during marriage as a beneficiary under the decedent’s life insurance policies is entitled to the life insurance proceeds upon the decedent’s death. A temporary order issued by a divorce court prohibiting a party to a pending divorce case from changing his or her will until the divorce is final is unenforceable.
The subsequent marriage of a single testator will not cancel his or her will. If a person who signs a will before marriage wishes to give all or any portion of his or her property to the new spouse, he or she should sign a new will. Otherwise, the property will pass according to the state law and provisions contained in the will that was signed before marriage, and the new spouse may receive less than the deceased spouse intended.
The Walser Law Firm can assist you with reviewing, updating and creating your will and other estate planning documents to ensure that your estate is distributed according to your wishes.
How can you change your will?
The following are valid ways you can change your will:
- Execute a new will. The law presumes that by writing a new will, the Testator wants to revoke the previous will. However, it is advisable to include a phrase similar to “I revoke all previous Wills” to ensure that the state recognizes that the new will supersedes any previous wills.
- Execute an amendment, called a codicil. A codicil should make specific reference to the existing and still effective will, and makes additions, deletions, or amendments. To properly execute a codicil, it must be signed in the presence of witnesses and notarized. If you need to make changes to your will, please consult an estate planning attorney.
- Editing. Crossing out words or sections and writing in the margin of the original will invites potential ambiguity, confusion, and potential will contests.
What can be done to minimize estate and gift taxes?
Numerous advanced estate planning strategies are employed to minimize estate and gift taxes. There are many factors that must be considered when tailoring a plan that will work best in each client’s situation. However, techniques that work exceptionally well for one client may be totally inappropriate for another client. The only constant is that clients with estate and gift tax concerns who are willing to invest in estate planning can expect to save much more in estate and gift taxes than they will spend in developing and implementing an appropriate plan.
Please call the Walser Law Firm if you are interested in learning about advanced estate planning strategies that will eliminate or reduce your estate and gift taxes. We can be reached at 800.815.6232.
How can an estate plan prevent a conservatorship or guardianship proceeding?
An estate plan uses several tools, which can prevent the court from gaining jurisdiction over your affairs. A durable power of attorney allows you to authorize a person to act in your place in the event of your incapacity; this attorney-in-fact can manage your financial affairs without the need of court intervention. A living will is used to determine if artificial life support systems are to be used or withheld.
A healthcare surrogate is used to appoint a person, in whom you have the utmost trust and confidence, to make decisions regarding health care treatment when you are unable to provide informed consent.
A trust, family limited liability company or family limited partnership is used to hold property; the trustees, managing members or partners manage the property held by any of these entities. The trust, the family limited liability company or the family limited partnership continue to manage the property even if you are incapacitated.
Even a basic estate plan can help you prevent the high cost of a conservatorship or guardianship proceeding.
Do I have to use an attorney for my estate plan? How much does it cost?
Only an attorney who regularly practices in the fields of wills, trusts and estate planning is able to provide you with sound legal advice as you put your estate plan into place.
Often the expense incurred in retaining an attorney to prepare and help you put an estate plan into place is worth hundreds of times what you and your family would pay with no planning or poor planning. It would also avoid the financial and emotional nightmares that can occur with a poorly drafted (or improper) plan.
To own and manage your property, in a similar manner to a trust, but allowing additional tax planning techniques to be employed. Family limited partnerships are generally used for those who have large estates and who face potential heavy federal and state taxes, death, and inheritance taxes. A document appointing a health care surrogate and giving instructions to health care providers about the person’s wishes during the final stages of an illness, generally instructing providers not to interfere with the process of dying by using machines or other heroic measures to delay the natural course of a terminal illness. A legal instrument whereby one appoints and empowers another person as agent to deal with one’s property and personal and legal affairs. It remains effective even after the maker becomes incapacitated. Florida law authorizes both immediate and springing durable powers of attorney.
While each situation is different, an attorney who regularly practices in the field of wills, trusts, probate and estate planning is able to provide you with sound legal advice as you put your estate plan into place. Of equal importance is the need to annually review our clients’ estate plans and asset protection strategies to account for changes in law or the acquisition or disposition of assets. The costs of failing to periodically review and update are typically greater than the costs of keeping your estate plan and asset protection strategies current.
Don’t delay planning for your future and the future of your family. Please feel free to contact our office if you or a family member would like legal assistance to create a will, trust and other estate planning documents that are tailored for your needs, and would like to set a consultation to have your situation evaluated.
For client convenience, flexible scheduling is available including day, evening and weekend appointments. Home and hospital visits are also available. We look forward to assisting you with your estate planning needs.