You have spent several decades of your life working hard to build long-term security for yourself and your family, so the last thing you want is for your precious assets to be dissipated after your death in a way you would not have chosen; however, this is what could happen, if you do not take careful steps to make sure your assets are protected. Florida estate planning is a legal process by which you can make arrangements for exactly what will happen to all your assets, both before and after your death.
Importance of Estate Planning
Estate planning is really essential in order to keep your property intact, and to prevent it from being eroded by threats such as probate, estate taxes and guardianship. With a well-drafted estate plan, you can avoid having parts of your property lost to unnecessary taxes and probate fees, and ensure that it ends up with the heirs and beneficiaries you choose. You can also make sure that should you become incapacitated, your affairs will be handled by someone you know and trust.
Where to Start
When you make the decision to get started on estate planning, the first step you need to take is to contact a specialist estate law attorney. Most aspects of estate planning are very complex, and absolute precision is necessary in order to make sure that nothing can be misinterpreted after your death. This could defeat the whole purpose of setting up an estate plan, so it is not something to do on your own.
In preparing your estate plan, the main points you need to consider will be who will inherit your property after your death, and how far you can avoid probate and guardianship proceedings. There are other factors to consider as well, such as who will make decisions about your health care if you are unable to do so. The main ways of dealing with these issues include a last will and testament, and a living trust, either revocable or irrevocable.
Last Will and Testament
Your will is a legally binding document which specifies your wishes for the distribution of your assets after your death. It has to be filed after your death with the Florida Probate Court, which will supervise the distribution of your property. If you die intestate — that is, without making a will — the State of Florida will determine how your assets will be divided and who your beneficiaries will be, which may not be the outcome you wanted.
In addition to the distribution of your property, your will should also specify provisions for any children, including naming a guardian, and should also identify a personal representative. This is the person who will report to the Probate Court. In Florida, unless it is a relative, the personal representative may not be resident outside the state.
A revocable living trust is a popular estate planning tool in Florida. Unlike a will, a revocable trust protects you during your lifetime as well as after your death, by allowing you to appoint someone to look after your affairs in the event that you become incapable. This minimizes the likelihood of guardianship, or of court involvement in your private affairs.
A Florida revocable trust is complicated to set up, and must be done by a lawyer, but it can save your family a lot of time and money. The trust is a private document, so it does not have to be filed with the court, and the assets you place in the trust will not be subject to probate after your death — this is a big benefit, as the Florida probate process can be extremely cumbersome. The trust is managed by the Trustee, who during your lifetime is likely to be yourself, so you have full control of your assets. On your death, or if you become incapable, the named Successor Trustee will take over the management.
Will or Trust?
Some people decide to set up a revocable trust in place of a will. However, the problem is that any assets outside the trust still have to go through probate, or will be subject to guardianship if you are incapacitated. You have to be very careful to fund the trust with all the assets you want to be in there, before your death or incapacity, if your aim of avoiding probate or guardianship is to be realized. For this reason, in case you acquire property which you never get round to putting in the trust, it’s advisable to make a will in addition to setting up a trust.
Most living trusts are revocable, which means they can be changed or modified during your lifetime. However, there are circumstances where it can be beneficial to set up an irrevocable trust, or one that will become irrevocable on your death. This can be helpful when there are young children, or children who may be irresponsible, or who have special needs.
When you set up an irrevocable trust, and transfer your assets to the trust, you surrender your rights of ownership to the assets, but it is an exceptionally powerful tool for protecting them. One way it can be beneficial is in protecting your assets from the costs of long-term nursing home care, which a revocable trust does not do. The assets in an irrevocable trust cannot be used in this way, because the Grantor (the person who set it up, that is, yourself) does not have access to them, or control over them. At the same time, it ensures you can receive any assistance you need from Medicaid.
It is actually quite a difficult decision to get started on estate planning. It is much easier to keep putting it off, as old age and death are subjects that most of us prefer not to think about. However, once you have your estate plan in place, not only will you have greater peace of mind, but you can be confident that your family will be provided for after your death, and will have no doubt about your wishes and intentions.
For legal professionals in the Broward, Dade and Palm Beach counties in Florida visit Wild Felice & Partners, P.A.