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Many people avoid estate planning because of how overwhelming it is. Conversations about death and end-of-life care can be uncomfortable, and estate planning is time-consuming and complex. While these statements can be true, a comprehensive estate plan is essential for protecting your assets and getting your financial affairs in order.
When done properly, estate planning will bring you peace of mind.
The team at Elder Needs Law understands why people often turn away from estate planning. That's why we created a guide to explain estate planning basics. Continue reading to learn more about estate planning and what you can do today to protect your future.
If you have more questions about estate planning needs or elder law matters, contact Elder Needs Law.
Call today to schedule your consultation.
Last Will and Testament
Commonly referred to as a "will" (not to be confused with a living will), this is a post-mortem planning document in an estate plan that explains one's final wishes as to who gets the testator's (the person who makes the will) assets after they die. Once appropriately signed, a will only has any use or meaning upon one's death. Only upon the passing away of the one making the Will, does the actual document have any legal effect or impact—and it must be probated through a court proceeding—which can be a long and expensive process.
Probate means to "prove." The court makes the testator prove what they want to do with their stuff upon passing. A personal representative ("personal representative" is the term used in Florida. Other states refer to the personal representative's role as the "executor") is named to handle the administrative aspects of a will and estate plan.
The named personal representative has specifically enumerated and statutorily granted powers. A will has "specific devises" (i.e., "Jenny gets half of what is in my bank account") and if there is anything left over, a "residue" (i.e., "and the rest to my children"). The residuary clause explains what happens to the deceased's assets that are left over after the specific devises have been honored. This can also include naming a primary beneficiary and contingent beneficiaries.
Wills must be signed with certain formalities. If you have more questions about a will or your estate plan, contact an estate planning attorney from Elder Needs Law today.
Florida Will Preparation Checklist
When a potential client comes in for a basic estate plan consultation, we will provide a worksheet to help make your estate planning attorney consultation more organized and efficient. As a preview, for those seeking a new last will and testament, we will request you bring as many of the following items and estate planning documents as possible:
Demographic Information Related to the Estate Plan
- Full legal name of client seeking a new last will and testament (for both spouses in the case of a married couple)
- Full legal name of children, other family members, or anyone else that is going to benefit or be a part of the client's estate planning
- Their addresses and phone numbers
- Notification if any of the children are from prior marriages
- Indication if any family members are to be disinherited
- Indication if any beneficiaries are minor children or a person with special needs
Estate Plan Beneficiary Designations — Additional Information
- Who will inherit real estate?
- Who will inherit cash?
- Any specific bequests for personal property items (e.g., my daughter Diane should get my emerald necklace, my nephew John should get my Cartier watch, etc.)?
- If any beneficiary predeceases the client, what happens to their share of the estate?
- Do you wish to name any religious institution or charity as a beneficiary?
Information Related to Assets
- Real estate addresses — including homestead and other properties (owned free and clear or with a mortgage)
- Bank account — the name of the banking institution and approximate balances
- Brokerage account / retirement plans — the name of the financial institution and approximate balances
- How the above assets are titled (owned by one individual, multiple individuals, tenants by the entirety, JTWROS, are there pay on death [POD, or TOD] designations, etc.)
- Life insurance and annuity policy information
Who to Administer the Estate Plan
- Who to serve as personal representative, or PR (this is Florida's term for "executor")
- If considering a revocable trust, who to serve as trustee(s)
- Designation of pre-need guardian in the case of minor children
- Any need to create a special needs trust
Revocable Trusts are a popular estate planning tool to use with the last will and testament because, unlike a will, revocable trusts are not required to go through probate (although one may choose to do so). A revocable trust goes into effect upon its signing—they come alive and have legal meaning immediately, not just upon the death of the one establishing the revocable trust.
The law treats a revocable trust like a fictional living entity, like a corporation. Unlike the last will and testament, which only comes "alive" upon one's death, a revocable trust comes alive upon signing. The trust can do certain things while the grantor is alive, and it can do many things, including taking care of the distribution of assets upon death, similar to a will, with the exception that utilizing a revocable trust greatly shortens or avoids the probate process.
A trust, again like a corporation, can own assets, such as bank accounts, financial accounts, property, and real estate. An individual can transfer title or ownership from that individual into a trust. For example, once you have a trust agreement set up, you can take that trust paperwork, walk into a bank with the trust agreement and tell them to change the name of your account to the name of trust. You otherwise fund a trust by retitling assets.
Every trust has three parties: (1) a settlor or grantor, (2) at least one trustee, and (3) at least one beneficiary. The creator of the trust is referred to as the "settlor" or "grantor." The settlor can appoint trustees, successor trustees, and co-trustees. Think of the trustee(s) like the board of directors of a corporation. In order to be effective, the trust must own assets. Trustees are responsible for the trust funds once the trust is finalized. Finally, beneficiaries are the people to whom the grantor has chosen to give the trust funds.
Every trust must consider what happens if the settlor or trustee becomes incapacitated. A trustee often works with the settlor's agent upon incapacity. If the settlor becomes incapacitated, but not all assets are in the title of trust, they need a power of attorney (POA). The POA can then grab the individual's assets and either dispose of them properly or transfer the title from the individual's name into the trust.
Why Does Every Revocable Trust (Used for Estate Planning Purposes) Also Come With a Will?
In other words—if I have a revocable trust, why do I also need a will? If there are assets that remain titled in the name of the deceased (not in the name of the trust), those assets must be probated. So, your estate planning attorney will set up what is commonly referred to as a pour-over will. Any assets that were not titled in the name of the revocable trust for whatever reason will be subject to a properly drafted pour-over will.
The pour-over will says that if any assets are not in the name of the trust, the trust becomes the sole beneficiary of the will. It's just a backup, which is not ideal because the pour-over will still goes through probate.
Power of Attorney
A power of attorney is a legal document that gives a person the authority to make financial or healthcare decisions on your behalf if you become incapacitated. It is non-assignable and non-delegable. So, if the named trustee of your revocable trust becomes incapacitated, even if that trustee has a power of attorney, the trustee's attorney is NOT able to conduct trust business for the trustee unless the trust specifically provides for this. If you are a trustee, it is advisable to have a Florida power of attorney so that someone can manage the trust if you cannot do so.
Elder Law Resources
- Summary of Florida Trust Code
- Difference Between Estate Planning Attorney and Medicaid-Planning Attorney
- Florida Estate Planning Checklist
- Incapacity Planning Documents
No matter what you need assistance with, don’t wait - schedule a consultation today to discuss a plan for your future.