Category Archives: Estate Planning

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.

Common Estate Planning Mistakes and How to Avoid Them

 Common Estate Planning Mistakes

Estate planning and end of life planning are about taking control of how your medical needs are met when you are unable to communicate your wishes and assuring an orderly distribution of your assets post-death.  When we are “young” [at 54 I consider myself young-ish so I use that word with a broad brush] — death and long-term care later in life might be hard to see as relevant, may seem scary or morbid but we shouldn’t put off planning out of fear of the unknown or because it’s unpleasant.   Often folks come to me after a health scare that shakes them up but I strongly encourage folks to NOT wait for life to happen to you –take charge and take care of things now.

Here are five common estate planning mistakes people make and suggestions for how to take action:

Not having a plan in place

If you don’t have a Basic Estate Plan in place, medical defaults, state guardianship, and intestate succession laws and the probate process will determine how you are cared for and where your assets go. You do not want your estate and end of life care managed by state laws and the court system –be proactive and meet with an experienced Estate Planning attorney to set up an end of life and estate plan.

Not Updating Your Plans

Having a plan from 1983 isn’t enough. Estate plans need to be updated after significant life events, when your goals shift or when public policy changes.  Make sure you review your Estate Plan regularly and make changes when necessary, with the help of an experienced Estate Planning Attorney –I meet with my clients every few years free of charge just to touch base.  Find “your attorney” and do the same –even if it costs a few bucks it’s money well spent. 

Improper ownership of assets

End of life planning can expose oversights surrounding asset ownership. The first mistake people make is not owning property jointly with rights of survivorship as spouses. On specific occasions, spouses may want to keep property separate but this should be calculated not accidental. When they own property together, it creates creditor protections and efficiencies in transferring property upon the first spouse’s death. Taking asset ownership too lightly or improperly executing it can cause problems when it pertains to estate and end of life planning. Make a listing of your assets and meet with an attorney to understand how they fit into your Estate Plan.

Not planning for minor children/beneficiaries

One of the most important goals of estate planning is to make sure your children are cared for in the case of you and/or your spouse’s untimely death. You also need to have a proper Will in place that designates a guardian (make sure you ask the relative or friend before listing them as the designated guardian —I strongly advise against “surprise” guardians).  That said, this subject deserves its own blog so look for one in the future but in the meanwhile please know this is probably the #1 overlooked Estate Planning area and that may be because when our children are young so are we —don’t be a statistic and visit with an attorney so that you have your family covered.

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.

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 : What are the Steps for Probate Once a Loved One Passes?

Steps for Probate

When a loved one passes away, the circumstances are emotional and stressful for anyone. The last thing on your mind is the practical and legal steps that must take place during this time. I tell everyone that you should take a breath, take care of putting your loved one to rest, grieve, spend time with family and THEN contact an attorney —there are very few circumstances where dealing with the legal aspects can’t wait a week or so.  Sometimes a quick phone call with your attorney can give you the peace of mind you need to not rush out to a meeting with an attorney when you really aren’t up for dealing with business yet. 

Meet with a probate attorney. 

The Personal Representative named in the Will should choose the attorney —often the attorney who did the Estate Planning is still practicing and is a good first step if that isn’t possible ask for a referral from your friends —the “yellow pages” isn’t always the best stop.  If you cannot get a referral then get online and read those reviews! It’s important that you find an attorney who can evaluate your circumstances and give you a game plan that you understand. You must feel comfortable with your attorney. The advice of competent counsel can save a lot of frustration and running down dead ends.

Initiate Probate.

If you are advised that a Probate is needed it must be initiated before anyone can begin selling, transferring, or using estate property.  It will not happen spontaneously someone must initiate the probate process. It is my advice that you hire an attorney —there is no Probate circumstance that I personally would ever recommend someone do without an attorney.  While an attorney is not required for a Summary Probate in Florida it is a process that will go much more efficiently if you are represented by counsel. In Florida, an attorney MUST represent the Estate if a Formal Probate is needed.  An experienced attorney can evaluate your case during your initial consultation and tell you which type of Probate if any, your circumstances dictate.

Take Inventory and Pay Debts

The probate process starts with a Petition and then publication to alert creditors of the action, followed by an inventory of all assets (real estate, bank accounts, investment accounts, etc.), which will need to be filed with the probate court and then ultimately payment of the Estate’s obligations.

Resolve Conflicts

At any point in the probate process, conflicts or legal challenges might arise. These will necessarily extend the amount of time it takes to settle the estate and will usually result in more estate expenses. Again, a qualified probate attorney can help you navigate this stressful piece of the process. 

Distribute Assets

Once all conflicts are resolved, estate debts are paid, it’s time to begin distributing assets. If there’s no Will, state intestacy laws will determine who the inheritors are.

Close the Estate

Finally, after everything is distributed your attorney can Petition the court to close the estate. Once approved, the Personal Representative will be discharged and the Estate will be closed.

 

Red Flags to Look for When Hiring an Estate Planning Attorney

Estate Planning is not black and white or an easy area of law to navigate by yourself without legal counsel. Estate Planning is an area of the law that can have everlasting (and devastating) effects on you and your loved one’s future. As with any legal matter, it is essential to remember to choose a lawyer that specializes in the field that you need assistance. As you would not ask your electrician to fix your broken toilet, selecting a specific attorney in their area of expertise is incredibly important.

Here are some other red flags and things to avoid when you are hiring an estate planning attorney:

Non-Licensed Attorneys

It may seem obvious that when you are making an estate plan, it is essential to seek proper legal advice. Only a licensed attorney can legally give you advice on how to best protect your assets from taxes, probate, and the costs of long-term care. The results of the unauthorized practice of law can be disastrous.

One-Size-Fits-All Planning

There are many general practitioners or legal document websites that can provide you with a basic and non-customized Last Will & Testament for a minimal cost. Be aware that these documents are usually entirely composed of general language and fail to address any individual or state law issues. You are putting yourself in the position to plug in your name and general information and hope for the best. Every family and situation is unique and each estate plan must be customized to account for the differences. Attorneys who truly focus on estate planning can provide an adequately customized plan which specifically addresses your needs and goals based on where you are in life.  

Big Picture Attorney

An extra bonus is an attorney who also does some Probate and/or Trust Administration —now there’s an attorney who actually sees how their [and others] Estate Plans play out.  MOST of the Formal Probates I do are the result of a flawed Estate Plan generated by either a website, a DIYer or what I refer to as a “Will Mill” —a practice that doesn’t give any thought to their client’s individual circumstances or what the practical result of putting a client’s request into their Will will be.

Carefully selecting the right attorney for the job has a monetary and potentially poignant impact down the road. Take the time to research your options and be sure to consult with a professional who is experienced and proficient in the field of Estate Planning. 

 

 

 

 

Strangest Estate Planning Requests

Estate Plan

Creating a Will allows us to control the nature of our property as well as fulfill some last wishes. But what if those wishes are very strange?

You would not be the first!  A surprising unusual estate planning request comes from William Shakespeare.  Shakespeare all but excluded his wife, Anne Hathaway, from his Will instead leaving the bulk of his sizeable estate to his eldest daughter, Susanna. To his wife, he left his “second-best bed”. This request was separate from the Will, tacked on as if it were just an afterthought. At this time leaving someone a good quality bed was not unusual but some scholars do think this could have been meant as an insult.

Magician Harry Houdini’s last wishes included a request for his wife to hold a mini séance every year on the anniversary of his death. They even agreed upon a phrase he would communicate –the message would be “Rosabelle believe”, a secret code which they agreed to use that he would say as confirmation that it was him really speaking.  Rosabelle was their favorite song. His wife, however, quit the séances a decade after his death —must’ve tired of waiting for Rosabelle.

Husband of the year for sure if you know me — Comedian Jack Benny left a provision in his Will instructing a local florist to deliver a red rose to his wife every day for the rest of her life.

Strange or purposeful?  Do you remember when businesswoman Leona Helmsley left her dog “Trouble” 12 million to inherit? A judge later reportedly reduced the inheritance to 2 million. That is still a lot of dog bones!

These were fun examples but remember…unusual provisions in Wills could confuse your family members if you are not careful. If you are seeking guidance in writing a Last Will and Testament or you’re looking to set up a Trust for your family, please make sure you consult an experienced Estate Planning attorney so they can explain the entire process in detail.

 

 

What is a Living Will?

Living Will

In the event you become both mentally and physically incapacitated and can no longer make end-of-life choices yourself, a properly drafted Living Will (also called an Advance Directive) states your wishes and a plan of action regarding medical treatment and life-sustaining measures.

A Living Will is a document which states whether or not you want to be put on life support if you become are both mentally and physically incapacitated, and terminally ill, in an end-stage condition or in a persistent vegetative state and your attending physician says there is no reasonable expectation of recovery.  In addition, it addresses other important issues such as tube feeding, artificial hydration, and pain medication. 

A Living Will is only effective if you are not able to communicate your wishes on your own. 

The key is to put your wishes in writing, so others will know what they are, and make sure that your physician(s) and family have a copy of the document or know where to get a copy of it immediately.  Without direction from you with these legal documents, your family members and health care professionals can easily become uncertain about treatment decisions. When family members disagree about what course to follow, the consequences are sometimes rifts that are never resolved.

Having a Living Will (and a power of attorney) in place you can direct what kind of extraordinary measures you do or not want while also naming someone to make sure your wishes are carried out.    Your Living Will may be one of the most important Estate Planning documents you ever make. Giving your loved ones clear written direction about your final wishes can spare them not only additional grief but puts you in control of making sure you get the kind of care you want. 

Things to Consider In Order To Include Charitable Giving Into Your Estate Plan

Sometimes we are not often able to donate to important charitable causes as much during our lives as we might like to. Leaving a gift as part of your Estate Plan is a great way to support the important work your favorite non-profit organization will continue to do in your memory and your gift no matter what the amount will be most graciously accepted.

Now that you have decided to make this meaningful impact, the first step is deciding which cause or set of causes will benefit from your donation. If you have a history of volunteer work or charitable giving, this may be an easy decision. But regardless of your charitable history, think about certain factors that will help narrow your focus of giving: For example, what issues in your community concern you? What concerns you about future generations? How would you like to be remembered?

As with any portion of estate planning, it is important to do your research and ask questions so your intentions are clear. It is also highly recommended to fully investigate the reputation of the charity you wish to make your contribution to. Ensure that the charity you wish to donate to uses their assets wisely and that your donation is actually applied to charitable purposes instead of administration costs.

If you are inclined to make a charitable donation in your Estate Plan, it is always smart to discuss your intentions with an Estate Planning Attorney to ensure your wishes are fully thought-out, appropriately documented, that your plan does not cause a Probate where there might not have been one [there are many ways to avoid this issue], and to ensure that the gift is mutually beneficial from a tax perspective.

The Benefit of Using An Attorney Instead of An Internet Service For Your Will

internet service

“Do I really need an attorney? Can I write my own will? ”

My quick answer is yes  —you can write your own will or use a free internet service to write your own Will.

In this age, you can watch a video on YouTube or read a DIY blog post and have the capability to Google just about anything. There’s seemingly limitless information at your finger-tips and it is easy to feel like you can sidestep the professionals for a cheaper solution.  The “catch” is some of that information is correct and some inaccurate but it is hard to discern which is which and even which is applicable to your circumstance.

The more important question is really SHOULD you write your own will?

Then my quick answer becomes NO. 

Even though some legal documents are free —they really are not one size fits all.  Laws vary from state to state and very small nuances can change what you should do.  Legal advice, guidance, professional knowledge, and peace of mind are why you pay an attorney.  A software system is only as good as its design. This software does not explain your options nor the implications/effects of those decisions.  A good estate planning attorney should be a trusted advisor can guide you, answer your questions, and help you to make informed and empowered decisions that are best for your family. 

That’s what we call money well spent.