Category Archives: Blog Series

Ask Heidi: Is a Will All I Need?

 

Is a Will all I need

In addition to a Will, it’s important to work with an estate attorney to draw up other important legal documents to protect your interests and the interest of your dependents and/or heirs. These include:

A Durable power of attorney to appoint your “agent” to carry out any legal and/or financial decisions that have to be made on your behalf during your lifetime if you are unable to act on your own behalf. Unlike a power of attorney extending specific or limited powers to a named agent, a durable power of attorney doesn’t end if you become incapacitated. However, all powers of attorney end at your death.

A Living Will and Healthcare Surrogate Designation are legal documents that enable you to specify the kind of medical care you do (or do not) want to receive in the event of illness or incapacity. They outline who is empowered to make healthcare decisions on your behalf and spell out how you wish to be cared for, alleviating the burden on your family members and loved ones to make those decisions at a highly stressful and emotional time.

While not everyone needs a Revocable Trust, it can provide a probate avoidance mechanism and the confidence that you have a plan in place to help provide for the safe and accountable management of family assets and to direct their use and distribution in accordance with your wishes and objectives. During your life you can remain both the trustee and the beneficiary of the trust, thereby maintaining control of the assets and receiving all income and benefits. Upon your death, a designated successor trustee manages and/or distributes the remaining assets according to the terms detailed in the trust, avoiding the probate process. In addition, should you become incapacitated during the term of the trust, your successor or co-trustee can take over its management.

Heidi S. Webb, Attorney at Law serves clients in Daytona Beach, Ormond Beach, Port Orange, Melbourne and beyond with matters of Elder Law, Estate Planning, and Probate Law. Contact her today to schedule a free consultation. Visit her page on Facebook, or see what her clients are saying to learn more about Heidi.

Ask Heidi: What should I change in my Estate Plan after my divorce?

what should I change after a divorce

Answer: Divorce is a difficult process, no matter how amicable the split. Between property division, potential custody disputes, and escalating legal bills, no one wants to think about more legal hoops to jump through. While updating your estate plan during a divorce may be the last thing on your mind, a failure to do so could lead to unintended results. These five changes to your Estate Plan after a divorce:

1. Last Will and Testament. Spouses are usually provided for in Wills executed by married couples. Oftentimes a spouse will be named as the estate’s Personal Representative and may receive the bulk of the estate. Under Florida law any designation of a spouse is void post-divorce which can leave important roles unfulfilled and potentially an estate without designated beneficiaries. It is imperative to review and update your Will after a divorce —especially if you are amicable and still want your ex-spouse to be named in any capacity.

2. Durable Power of Attorney. This document authorizes an agent to act on an individual’s behalf. Since the agent for a married person is usually his or her spouse, this authorization is normally terminated within the body of the document upon certain events —divorce included, however, a formal recorded revocation is appropriate in a high conflict situation.

3. Medical Health Care Power of Attorney and Living Wills. Typically, the principal’s spouse is named as the agent if the principal is incapacitated. Another category addressed by Florida law upon divorce is in the area of health care and powers of attorney. If a husband or wife names his or her spouse as their health care surrogate or as the agent under their advance directive (living will), a subsequent divorce automatically revokes the designation, unless otherwise provided for in the advance directive/health care surrogate form, or final judgment of dissolution.

4. Trusts. Florida statute has the same effect on revocable trusts as the statute governing wills. It provides that any provision of a revocable trust (which is executed by a husband or wife prior to divorce) that affects the settlor’s spouse becomes void upon divorce. Unless the revocable trust expressly provides otherwise, the trust shall then be administered and construed as if the settlor’s spouse died on the date of the divorce.

MYTH #4: Once I put a plan in place, I don’t need to revisit it later.

 

Estate Planning Myths

Planning is never a “once and done” proposition. Your life, preferences, and goals change over time and maybe also be impacted by outside influences, such as the financial markets, tax law changes, and economic events. What if you marry or divorce, welcome a new child or grandchild, your minor children become adults, you move to another state, or experience the death of a spouse? All of these changes need to be reflected in your estate and legacy planning. That’s why it’s important to periodically review and update your estate planning documents, including your beneficiary designations and how your various accounts are titled.

MYTH #3: A will can oversee the distribution of all of my assets.

Estate Planning Myths

A will is a legal document that instructs how your property will be distributed after your death. It allows you to name a Personal Representative charged with overseeing the distribution of your property and shepherding it through the probate process. Probate is the court process that’s required to validate your will and transfer your assets.

However, certain assets may sit outside of your will. These include life insurance policies or qualified retirement accounts (401(k)s, IRAs, etc.) that have a beneficiary designation, as well as assets or accounts with a pay-on-death (POD) or a transfer-on-death (TOD) designation. These assets transfer directly to the named beneficiaries and are not subject to probate.

This is why it’s so important to review your account beneficiary designations annually or whenever changes in your life occur. Even if your will and/or trust names your current spouse as the beneficiary or co-trustee, if assets sit outside of your will or a trust, they are not governed by those documents and outdated beneficiary designations can control.

MYTH #2: Estate planning is only about distributing my assets after I’m gone.

Estate Planning Myths

Incapacity planning is an area of planning that encompasses far more than managing your assets after your lifetime.  Incapacity planning is an ever-evolving plan —I like to call it Life Stage Planning and it is the preparation for unexpected events at every stage of your life.  When you have a young family it would include naming a guardian for your minor children as well as a Conservator or Trustee to manage their finances while they are under the age of majority [or longer if that is your wish].  As we age it becomes more important to think about who will manage your affairs if you’re no longer able to do so yourself, to the type of care you will you receive, and who will oversee your care.

Common Myths Regarding Estate Planning – Ask Heidi

 

In my practice, clients come to me with preconceived ideas regarding Estate Planning, and many of them are incorrect. Due to this, I decided to create a blog series to debunk the most common myths. 

Estate planning is about defining your legacy during your lifetime, enabling you to enjoy the impact it has on the people and organizations you support; ensuring loved ones who depend on your income are protected in the event of your incapacity or death; and ensuring your wishes and preferences are communicated and can be met should you require long-term care, among other goals. It helps to answer important questions, including who will have the legal authority to act on your behalf if you’re unable to do so during your lifetime, whether that’s managing your assets or important healthcare decisions and who is going to be tasked with making sure it happens.

To help clarify the role of estate planning, it’s important to debunk some of the most common myths, beginning with: Who needs an estate plan? 

MYTH #1: Estate planning is only for those with high net worth. 

Estate planning is not only for the 1%.

Often, people believe that estate planning only benefits the uber wealthy, but nothing could be further from the truth. If you own property and assets or have loved ones that depend on you to provide for their income or care, you have an estate and need a plan—regardless of your estate size. Estate planning is something everyone needs to engage in regardless of age, the estate size, or marital status. If you have a bank account, investments, a car, home, or other property—you have an estate. More importantly, if you have a spouse, minor children, or other dependents, an estate plan is critical for protecting their interests and their future income needs. 

An estate plan can help you accomplish these and other important goals: 

  • Name your Power of Attorney & Health Care Surrogate should you become incapacitated and unable to manage your affairs during your lifetime.
  • Document the type of care you prefer to receive should you become ill or incapacitated, including any life-prolonging medical care you do or do not wish to receive. Express your wishes and preferences for funeral arrangements and how related expenses will be paid. 
  • Protect those who depend on you and your income during their lifetime. 
  • Name your executor and/or trustee – the individual(s) or institution you appoint to administer your estate and distribute your property after your death. 
  • Name guardians for minor children. 
  • Avoid probate, the court process for proving that a deceased person’s will is valid —I call this Probate Proofing and I advise clients every day how to do this both with my help and on their own. 
  • Name the family members, loved ones, and organizations you wish to receive your property following your death. 
  • Transfer property to your heirs and any organizations you’ve named in your estate planning documents in a tax-efficient and expedient manner, with as few legal hurdles as possible. 
  • Manage tax exposure. 

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Heidi S. Webb, Attorney at Law serves clients in Daytona Beach, Ormond Beach, Port Orange, Melbourne and beyond with matters of Elder Law, Estate Planning, and Probate Law.   Contact her today to schedule a free consultation. Visit her page on Facebook, or see what her clients are saying to learn more about Heidi.

 

Ask Heidi: What is the role of the Personal Representative in Florida?

Personal Representative

For starters, some of you may find it helpful to know that a Personal Representative in Florida is the same thing as an Executor in many other states —Florida Law just chose the term Personal Representative.  A lot of times when I say that folks are like “ohhhhhhhh” and the a-ha moment occurs but if you’ve never dealt with either term this blog will hopefully clear up the basics.

A Personal Representative is responsible for gathering the assets of the Estate, protecting the estate property, preparing an inventory of the property, paying various estate expenses, paying valid claims [including debts and taxes] against the Estate, representing the Estate in claims against others, and eventually distributing the estate property to the beneficiaries. In the event the decedent passed away with a Will, the Will may often impose additional duties on the Personal Representative that are not required by law.   In all cases, the first thing the Personal Representation should do is contact an attorney to see what needs to be done [as well as what may not need to be done].

Here is a quick list of the responsibilities the Personal Representative will need to handle with the assistance of an attorney representing the estate:

  • Opening the Estate
  • Identify Assets of the Estate
  • Opening of the Estate Account
  • Provide Notice to Creditors
  • Preparation of an Estate Inventory and record-keeping during the administration
  • Filing of Tax Returns
  • Distribution of Assets and Closing the Estate

When choosing the Personal Representative for your Estate, it is critical to fully explain what comes with this responsibility to make sure they are up for the task. It is recommended to discuss your Estate Plan with an Estate Planning attorney in the State in which you reside to ensure your plan is draft correctly.  If you live in the Daytona Beach or Melbourne, Florida area, call my office for a free consultation.

What happens in Florida if I die without an Estate Plan?

die without an estate plan

 

Quick answer, State law will dictate how your assets are distributed.   Assets that fall under the purview of the Probate Court without direct beneficiary designations will need to be probated and they will be distributed pursuant to the laws of intestacy.  This means that Florida law dictates who will inherit your probated assets without any other factual consideration and no concern for what your wishes may have been. This scenario can be particularly devastating when the people named under Florida law are not the people you want inheriting your estate.

Think of your Estate Plan as your instruction manual for the probate court —if you don’t have one, then Florida Statute becomes the instruction manual for your probate assets.

ASK HEIDI:  Do I need to select a Power of Attorney for financial matters and another for health care, or can the same person do both? 

Short Answer:  While it’s two different documents/roles it can be the same person wearing both hats.

The document for handling financial matters is called a Durable Power of Attorney and the Health Care Surrogate Designation is for healthcare decisions when you are unable but there’s an expectation of survival. 

I usually approach it from the perspective that they are very different roles and often different loved ones might be better suited for one rather than the other.  I tell my client’s that they shouldn’t feel it HAS to be the same person but it absolutely can be. 

Four Things that Cause Sibling Feuds Regarding Estate Planning

 

Caring for an ill parent or settling their estate once they have passed is an emotional time in a family and can start a feud or add to an already existing one if specific preventative measures are not taken. When parents divide their assets to their children, they don’t expect such fights to occur, but they do. Not all disagreements can be prevented, but with careful planning, following the advice of an Estate Planning Attorney, parents can try to avoid these issues.

Here are four things that commonly cause fights and advice on how to prevent them from happening.

  1. No Healthcare Directive and Power of Attorney

When a parent gets sick, it can be stressful, especially if they need to be hospitalized for an extended period. This can become more challenging if their situation becomes critical and they are unable to voice their healthcare or financial wishes. If a parent does not have a Healthcare Directive or Power of Attorney, their loved ones are forced to make the decisions for themselves. This can cause conflict between siblings if they are unable to agree on a resolution. In some circumstances, siblings have taken each other to court to fight for ‘their side’. This can cause a rift in their relationship, costly court fees, and lost time that instead should be spent by their parent’s side.

To avoid this conflict, parents should have their Healthcare Directive and Power of Attorney prepared:

  • A Healthcare Directive specifies your wishes for medical treatments and allows you to appoint someone to carry out your wishes if there is ever a time when you are no longer able to communicate or provide consent
  • A Power of Attorney allows you to appoint someone to look after your financial affairs, such as your property, while you are incapacitated
  1. No Will

If both parents pass away without a Will, a family can be thrown into chaos. This can cause fights between siblings if they want the same thing or can’t agree on how to equally divide the items.

Parents should create a Will and specify who gets what. They can identify items and give them as gifts to their children. Creating a Will not only ensures your loved ones are looked after, but it decreases the chance of siblings fighting over material possessions.

  1. Lack of Communication

In some cases, having a Will is not enough to stop feuds from occurring. A lot of times, parents don’t discuss their Will with their children (as it can be uncomfortable talking about money or their mortality). However, this lack of communication can cause more problems between siblings because it is too late to hear their parents’ reasoning.

Parents should communicate with their children about their Will so they are aware of the contents and can have an open discussion.

  1. Wrong Personal Representative/Executor

A Personal Representative/Executor will distribute the assets Personal Representative/Executor. Since the Personal Representative/Executor has the power to make decisions, it can create some tension between siblings. Arguments can arise because they may feel jealous that their sibling is the Personal Representative/Executor or that their sibling is abusing their power and not carrying out their responsibilities.

Often parents can select a third party as their Personal Representative/Executor. This can help alleviate tension between siblings as the Personal Representative/Executor is impartial and has no personal interest in the estate.

Every situation is different and sometimes feuds and disagreement cannot be avoided even with careful planning and the best intentions. As always, I recommend a lawyer in the state in which you reside prepare these papers, so there are no legal issues when the time comes for them to be implemented. If you live in the Daytona Beach, Florida area, call my office for a free consultation.