Category Archives: Estate Planning

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.

Using a Trust When You Have Young Beneficiaries

Young Beneficiaries

Getting an Estate Plan in place is an essential but complicated process. Everyone’s situation is different, and that is why I always recommend hiring an Estate Planning Attorney to listen to your unique circumstances and utilizing their knowledge of the law to put together a plan that works for you and your heirs. With that being said, a Revocable Trust is a document that often comes up when I speak with clients —with varying preconceived notions. There are several ways this type of document can come into play in an Estate Plan and having young beneficiaries is one to consider.

Minors can’t legally manage their own property or accounts, so an adult must do so for them. The court will appoint someone to oversee their inheritances for them until they come of age if you don’t name anyone in your estate plan. A revocable trust can avoid this court involvement and allow you to set out not only who will manage their assets but how they will manage their assets.

Many parents and grandparents choose to terminate a minor’s trust when the child reaches a certain age, such as 25 or 30, when they believe the minor will be mature enough to invest, spend, and manage their inheritance. The trust is terminated by distributing the remaining assets outright to the beneficiary when they reach that specified age but it is important to note that at that point the assets are considered to be the beneficiary’s property, and they become available for creditors’ claims, including judgment holders in lawsuits. The property also becomes vulnerable to a spouse in divorce proceedings —so the language chosen to set this “termination event” is very important.

You can continue the trust for the benefit of a young beneficiary, so it lasts throughout their entire lifetime. No rule says the trust must terminate at a certain age.  This type of trust language can create an asset protection barrier between the beneficiary and the beneficiary’s creditors as the beneficiary gets older if it’s appropriately drafted. The assets held in the trust remain there for their benefit and out of the pockets of creditors and spouses because they don’t technically own them—the trust does.

A trust can be drafted to not only protect young beneficiaries from outside influences but from themselves as well if you know that they’re not good with managing money, and you worry that they’ll deplete their inheritance in record time. It can safeguard estates against a beneficiary’s own bad decisions or excessive spending habits.

There are many benefits to creating a Trust but I still believe it’s very case specific and that not everyone “needs” a Trust and so I discuss at length how a Trust could benefit a particular client’s situation and when they would not be a value or not.

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.

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. 

Follow my blog to receive the next blog post in this series straight to your email address. 

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.