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The Basics of Estate Planning Clearwater Documents

While estate planning may seem a daunting task, understanding your estate planning Clearwater documents typically involved can take a lot of the mystery out of it.

Health Care Directive

One of the most important documents in your estate plan is your Advanced Health Care Directive. This document allows you to nominate agents to make health care decisions for you in the event you are unable to do so yourself. Further, it permits you to be specific as to the type of treatment you do, and do not, want. It can be clear in explaining any end-of-life treatment decisions you may choose, such as maintaining or withdrawing life support, or organ donations. Finally, it should include clear HIPPA releases which allow your agents to access your medical records and deal with health insurance issues. Consult with your Clearwater estate planning attorney to assist in drafting this important document.

Financial Power of Attorney

In the event of your incapacity, it is important that your bills continue to be paid, your assets managed, and your family provided for. This can be accomplished through the power of attorney, in which you nominate an agent to handle these matters on your behalf. The power of attorney can be effective immediately, or only upon your incapacity. Additionally, it can give limited or broad powers to your designated agent. Your Clearwater estate planning lawyer can guide you in determining how best to construct this document.

Will

Your will designates an executor to administer your estate after your death. Your executor is empowered to pay bills of the estate and file tax returns, managing your estate until it can be properly distributed to the beneficiaries named in this document. Again, it is important to discuss your goals with your Clearwater estate planning attorney.

Living Trust

This is a very powerful document which nominates your successor trustees who will manage trust assets upon your incapacity or at your death. It designates beneficiaries who will inherit your estate at your death, but also ensures that you designate a professional fiduciary or trusted friends or family members to manage the estate on your behalf, during your lifetime, if you are unable to do so yourself. Again, the Clearwater estate planning attorneys at the Coleman Law Firm can assist you in preparing this document.

Contact Us for More Information on Estate Planning Clearwater Documents

Contact the Coleman Law Firm at 727.461.7474 or toll free at 866.461.7474 to prepare or review your estate plan.

Estate Planning Gives You Peace of Mind

Estate planning is not simply an exercise for the elderly, but a prudent step for any adult. It is a clearwater estate law attorney Seat of Judge
valuable gift you can leave your family, which, with your proper planning, will be spared the expense and distress often associated with administering an intestate estate.  

Will

This is the most basic document in your estate plan. It provides for disposition of assets at death and appoints an executor to administer the estate.  A will’s advantage is orderly estate administration. Additional benefits include nominating guardians for minor children, leaving funds for education, providing for the care of pets, and ensuring the continued operation or disposition of a business. Consultation with your Clearwater estate law attorney can help you ensure your will addresses issues significant to your family.

Health Care Directive

Your health care directive identifies an agent enabled to make care decisions for you if you cannot. This document can provide for your wishes relative to organ donation or life support. Making your wishes known in advance can avoid contentious future litigation, and can give your loved ones the comfort of knowing they are following your wishes.

Power of Attorney

Your Clearwater estate law attorney can assist you in drafting a power of attorney nominating an agent who will be able to handle your affairs if you are unable to do so. In the event of your incapacity, bills still need to be paid, your investments need to be managed, and your family cared for. Your agent under power of attorney will have the authority to act on your behalf if you cannot to ensure your obligations are being met.

Living Trust

You can establish a living trust after consultation with your Clearwater estate law attorney that will provide substantially the same benefits as a will, and offer you significant additional benefits as well. Like a will, your trust can provide for disposition of assets at your death to ensure your family, pets, business, and other interests are provided for. Unlike a will, though, your living trust can avoid the necessity of probating your estate.

Contact A Clearwater Estate Law Attorney

Call a Clearwater estate law attorney at the Coleman Law Firm, 866.461.7474, to discuss establishing an estate plan to benefit your family.

Information Your Estate Planning Attorney Needs

Tampa FL estate planning lawyer Lady of JusticeWhen you meet with Tampa FL estate planning lawyers, you may be asked to provide information regarding yourself and your estate needs. Here is a brief list that Tampa FL estate planning attorneys may request of you.

Background Information

Be prepared to provide information that can help identify you, including your name, address and date of birth. Tampa FL estate planning lawyers will also likely ask for your contact information to update you when your documents are in order.

Liabilities

In addition to providing Tampa FL estate planning attorneys with information regarding your assets, also be prepared to provide information about your liabilities. Have your mortgage, credit card debt, business debt and guarantee information ready.

Current State of Affairs

Tampa FL estate planning lawyers need to know whether their clients have taken any other steps to prepare for death or incapacitation. When they prepare clients’ wills, they must expressly revoke other wills, if applicable. Additionally, they will want to know whether the testator has provided for any previous taxable gifts. Your attorney will want to know whether you want to include a trust for minor children or other beneficiaries, as well as the identity of all of your intended beneficiaries. If you have unique estate planning needs, such as making charitable gifts, providing for disabled loved ones or simplifying the probate process, communicate this information to your attorney.

Fiduciary Information

It is important to provide your lawyer with information regarding the individual that you want to help handle your financial affairs. Include contact information for your personal representative, as well as his or her relationship to you. Additionally, provide information for alternate or successor trustees or personal representatives. If you have minor children, discuss who you want to serve as their guardian.

If you would like to know about other information that your estate planning attorney will need, contact the Coleman Law Firm by calling (727) 461-7474.

Financial Accounts That Avoid Probate

As part of your estate plan, your Tampa FL estate planning lawyer may recommend a variety of Tampa FL estate planning lawyer Judge Seatfinancial accounts that are designed to avoid the probate process. Additionally, these accounts can help get much needed funds in the hands of the beneficiary whom you designate.

Joint Tenants with Right of Survivorship

Your Tampa FL estate planning lawyer may recommend using this type of account that disallows creditors from reaching the proceeds in the account. Unless a signature card, agreement or contract with the financial institution specifies otherwise, the proceeds in the account pass through survivorship upon the death of the other account holder. Some individuals establish this type of account as a convenience so that another person can write checks for them. However, a Tampa FL estate planning lawyer may describe the potential drawbacks of establishing this type of account, such as making a presumptive gift to another individual.

Tenants by the Entirety

This type of account is only available to spouses. If the account was established with the unities of interest, possession, time and title, there is a presumption that a joint account held in both spouses’ names is a tenants by the entirety account.

Pay on Death Accounts

This type of account is a traditional financial account. However, your Tampa FL estate planning attorney can explain that the main difference is that the account holder can designate a person to receive the remaining balance in the account after he or she dies. The beneficiary receives no immediate right to the account or the funds in it during the account holder’s lifetime. The account holder can name one party as the beneficiary or multiple parties. Additionally, he or she can set up the account so that one of the parties listed is the trustee for the other beneficiaries.

Convenience Accounts

Your Tampa FL estate planning attorney can explain the value of using a convenience account. This type of account allows you to give limited powers to another party to assist you without having to relinquish control of the account.

If you would like to know if any of these types of accounts or any others can help you with your estate plan, contact the Coleman Law Firm by calling (727) 461-7474.

Avoiding Estate Taxes

Clearwater estate planning attorneys Gavel and American FlagDue to the fact that estate laws change so frequently, it can be difficult for Clearwater estate planning attorneys to devise an effective estate plan that minimizes the amount of taxes that an estate may be subjected to. In recent history, only those estates that have high values are subject to the federal estate tax. Additionally, estate tax exemptions tend to increase over time to properly account for inflation.

Federal Exemption Rate

Clearwater estate planning attorneys can explain that the federal exemption rate in 2014 was $5.34 million. This means that the value of the estate over this amount is subject to a large estate tax.

State Estate Tax

While some states also impose an estate or inheritance tax, Clearwater estate planning attorneys can explain that Florida does not impose such a tax. State estate taxes tend to have a much lower exemption rate than the federal exemption rate.

Ways to Avoid Estate Tax

If you anticipate that the value of your estate may exceed the federal exemption rate, Clearwater estate planning lawyers may advise you to take advantage of one or more of the following strategies to help reduce your tax liability.

Leave It to Your Spouse

The federal exemption rate excludes those assets that you specifically devise to your spouse. You can leave your entire estate to your spouse tax-free. However, when your spouse dies, his or her estate will be subject to the exemption rate.

Use an Irrevocable Trust

Clearwater estate planning lawyers can explain that revocable trust assets are still used to calculate the total amount of tax due because the settlor still has control of these assets. However, irrevocable trusts function differently because you do not retain control of these assets. The trust becomes the legal owner of the assets. Through an irrevocable trust, you can transfer assets to beneficiaries without incurring taxes, even if their value exceeds the exemption amount.

Use a Different Trust

Additionally, your estate planning lawyer can advise you of other potential trust options. For example, a credit shelter trust can have assets that are equal to the value of the federal exemption rate. If you establish this trust at your death, your spouse can still receive income from these assets like he or she would have if you devised them specifically to your spouse in a will. This strategy can also help you avoid putting your spouse’s estate over the federal exemption limit.

Minimize the Value of Your Estate

Another potential way that you can minimize your tax liability is by decreasing the value of your estate. For example, you can make gifts of up to $14,000 each year without having to pay gift taxes while keeping within the annual exclusion limit. Certain gifts do not count toward the annual exclusion, such as tuition or medical expenses that you pay on behalf of another person.

If you would like to learn about other ways that you can potentially avoid incurring federal estate tax, contact the Coleman Law Firm at 727-461-7474.

Clearwater trust administration attorney

Estate Plan Considerations

Dunedin estate planning attorney working at his deskWhile your Dunedin estate planning attorney can explain that the foundation of any estate plan is to provide a plan for how your property is distributed at your death, he or she can explain that estate plans involve many more principles than this. A Dunedin estate planning lawyer can help you devise a plan in case you become incapacitated and plan for other potential events that can significantly impair your finances. Here are some documents that a Dunedin estate planning lawyer may advise will be part of your estate plan.

Wills

When most people think of estate planning, they think of wills. Rather than having the state decide how to dispose of your property, a will lets you make these decisions. However, your Dunedin estate planning lawyer can explain that wills also allow parents to name a guardian for their children. Additionally, you can name an executor to oversee the process.

Trusts

Another tool that you can add to your estate plan is a trust. Trusts provide for the lawful transfer of property. Trusts can help provide for the management of assets during your life and upon your death. Trust assets are shielded from the probate process. Additionally, you can set parameters around when property should be transferred from the trust to your beneficiaries, unlike with wills.

Power of Attorney

A Dunedin estate planning attorney may recommend that you include a power of attorney as part of your estate plan. This legal relationship allows another person to make financial decisions on your behalf. They can operate while you are ill, when you become incapacitated or both.

Health Care Directives

A health care directive allows you to pre-determine how you want things to proceed when certain situations occur. For example, you can instruct medical providers not to provide you with life-sustaining treatment through the use of a living will. Additionally, you can designate a health care proxy who will have the legal right to make health care decisions on your behalf.

If you would like more information on what you should include in your own estate plan, contact the Coleman Law Firm at 727-461-7474.

Legal Requirements for Trusts

Bellaire estate planning attorney reviewing legal bookIf you are interested in creating a trust as part of your estate plan, a Belleair estate planning attorney can discuss the legal formalities that must be executed with trusts. Additionally, your Belleair estate planning attorney can explain that these formalities are the same as those required by individuals who make a valid will.

Writing

One basic requirement of a valid trust that your Belleair estate planning attorney can mention to you is the need for the trust to be in writing.

Signatures

Additionally, your Belleair estate planning attorney can explain that you must sign the trust or ask another person to sign on your behalf in your presence. Two witnesses must see this signing personally. These witnesses must also sign the trust in front of the person creating it and in the presence of one another.

Presumption of Revocability

The person who establishes the trust is usually able to revoke or amend the trust at his or her bidding unless the trust is expressly made irrevocable.

Revoking or Amending a Trust

If only one person created the trust, the settlor can generally amend or revoke the trust by substantially complying with a revocation or amendment provision in the trust. If the trust does not say how to amend or revoke the trust, the settlor can revoke or amend it by making a later will or codicil that specifically devises the trust property or any other method that provides clear and convincing evidence of the settlor’s intention to revoke or amend the trust. Again, the formalities of creating a will are required.

Special Rules Regarding Joint Settlors

If more than one settlor established a trust, such as when a married couple does, there are different rules regarding revoking or amending the trust. For example, if the trust has community property in it, the trust can be revoked by either spouse. However, it can only be amended by both of the spouses together. For property amendments that are separate property, each settlor can revoke or amend the trust regarding that part of the trust individually. Contact a Belleair estate planning attorney from the Coleman Law Firm at 727-461-7474 for help with your estate plan.

Health Care Advanced Directives

Dunedin estate planning attorney gavel and American flag

While much of estate planning involves the distribution of certain assets, a Dunedin estate planning attorney can discuss the importance of healthcare documents. These documents can have a significant impact on your future and well-being.

General Information on Advanced Directives

Your Dunedin estate planning attorney can explain that an advanced directive is a statement that gives certain directions to healthcare providers. The individual giving the instructions is referred to as a “principal.” The principal. A Dunedin estate planning attorney can explain that the most common kinds of advance directives are health care surrogate designations and living wills.

Health Care Surrogates

Additionally, your Dunedin estate planning attorney can explain that health care surrogates are individuals who are allowed to make decisions on behalf of the principal once the principal is declared to be incapacitated. Additionally, these individuals are given the power to consult with healthcare providers and access medical records to help them make more informed decisions. They also have the authority to give consent on behalf of the principal. Health care surrogates can apply for benefits and access income and asset information for this cause.

Your Dunedin estate planning attorney can explain the legal requirements of appointing a health care surrogate. To create a surrogate, the principal must be competent at the time of the designation. Additionally, the principal must sign a document that designates a health care surrogate. If the principal needs someone else to sign the form because he or she is physically incapable, the principal can direct another person to sign for him or her. Two witnesses must be present at the signing, neither of whom can be the health care surrogate. Only one of the two witnesses can be the principal’s spouse or relative.

Living Wills

A living will provides specific directions from the principal regarding important health care matters. The living will applies to when a person has a terminal illness, has an end-stage condition or when the person is in a persistent vegetative state. Directions may pertain to providing life-prolonging procedures, withholding these procedures or withdrawing these procedures.

Contact a Dunedin Estate Planning Attorney

If you would like more information on this topic, contact the Coleman Law Firm at 727-461-7474.

Information to Provide to Your Estate Planning Attorney

Largo estate lawyer GavelYour Largo estate lawyer requires a lot of information in order to help you establish an effective estate plan. This information helps your Largo estate attorney to better understand your financial situation and goals. Your lawyer may ask you to complete a questionnaire or to bring a variety of documents with you when you first meet with your Largo estate attorney. The following information may be required by your attorney.

Information about You and Your Background

Your Largo estate lawyer may ask you about the following information that is pertinent to you and your background:
  • Your full legal name
  • Your mailing and physical address
  • Your home phone number and your cell phone number
  • Whether you have lived in another state or country
  • The country where you are considered a citizen
  • Your date of birth
  • Your job

Family Information

Your Largo estate lawyer may ask about your marital and family history. In particular, he or she may ask for the following information:

  • Your current marital status
  • Date of your current marriage
  • Whether you are divorced or widowed
  • The name of your former spouse
  • The date of death of your former spouse or the date of divorce
  • Whether your deceased spouse left a will
  • State where your former spouse died or where the divorce was granted
  • Financial requirements listed in the divorce decree
  • Whether a prenuptial or postnuptial agreement is in place
  • Whether you have any children and their identification
  • Whether you wish to leave any children out of your will

Assets

Your lawyer also needs to know about the types of assets that you have. He or she will likely ask for the different types of financial accounts you have, their location and their relative value. You may be asked to provide information about real property you own, checking accounts, retirement accounts, life insurance policies, business interests, pension plans, trust interests and other assets of significant value.

For help with your estate plan, contact Coleman Law Firm at 727-461-7474.

An Overview of Estate Planning  

Dunedin estate planning lawyer Men Reviewing Estate Planning DocumentsSome people entertain the mistaken belief that estate planning is only for the elderly. However, it is especially necessary for anyone with minor children, assets to protect and anyone who wants to prepare for the future. Your estate plan helps you clearly communicate your wishes in writing through legal documents, including a will, a trust, a living will and powers of attorney. The focus is on helping your loved ones after your passing and protecting them from undue expense or pain. Our Dunedin estate planning lawyer can provide guidance through this process, no matter the size of your estate.

Meeting Your Estate Planning Needs

Our Dunedin estate planning attorney will discuss your goals and work to develop an estate plan tailor-made to meet your needs. We will answer your questions and address your concerns in order to ease your mind as you take care of these matters.

Parts of Estate Planning

The amount of estate planning you need depends on your specific concerns. For example, a will is used to transfer your property to those you designate, such as individuals, charities or businesses. The will also addresses the care of any minor children and usually sets up a trustee to represent you after your death. A living will is used to provide instructions regarding medical treatment if you cannot make your own decisions and generally includes addressing your preferences regarding any life-sustaining methods. A trust is an entity that manages monies and distributes them to one or more beneficiaries. While a will takes time to administer, a trust is immediately effective and avoids the red tape of probate. Our Dunedin estate planning lawyer can address your concerns regarding each of these areas.

Probate

Probate settles the decedent’s estate and transfers assets to the correct recipients. It is also the process of legally validating the will. The time frame can take from a few months to many years. Our Dunedin estate planning attorney can provide suggestions on how to minimize this time frame.

If you have questions or need help with organizing your affairs, call our Dunedin estate planning lawyer. Contact the Coleman Law Firm at 727-461-7474 for further information.

Legal Requirements for Trusts

If you are interested in creating a trust as part of your estate plan, a Belleair estate planning attorney can discuss the legal formalities that must be executed with trusts. Additionally, your Belleair estate planning lawyer can explain that these formalities are the same as those required by individuals who make a valid will.

Writing

One basic requirement of a valid trust that your Belleair estate planning attorney can mention to you is the need for the trust to be in writing.

Signatures

Additionally, your Belleair estate planning attorney can explain that you must sign the trust or ask another person to sign on your behalf in your presence. Two witnesses must see this signing personally. These witnesses must also sign the trust in front of the person creating it and in the presence of one another.

Presumption of Revocability

The person who establishes the trust is usually able to revoke or amend the trust at his or her bidding unless the trust is expressly made irrevocable.

Revoking or Amending a Trust

If only one person created the trust, the settlor can generally amend or revoke the trust by substantially complying with a revocation or amendment provision in the trust. If the trust does not say how to amend or revoke the trust, the settlor can revoke or amend it by making a later will or codicil that specifically devises the trust property or any other method that provides clear and convincing evidence of the settlor’s intention to revoke or amend the trust. Again, the formalities of creating a will are required.

Special Rules Regarding Joint Settlors

If more than one settlor established a trust, such as when a married couple does, there are different rules regarding revoking or amending the trust. For example, if the trust has community property in it, the trust can be revoked by either spouse. However, it can only be amended by both of the spouses together. For property amendments that are separate property, each settlor can revoke or amend the trust regarding that part of the trust individually.

Contact a Belleair estate planning lawyer from the Coleman Law Firm at 727-461-7474 for help with your estate plan.

Information to Provide to Your Estate Planning Attorney

Your Largo estate lawyer requires a lot of information in order to help you establish an effective estate plan. This information helps your Largo estate attorney to better understand your financial situation and goals. Your lawyer may ask you to complete a questionnaire or to bring a variety of documents with you when you first meet with your Largo estate attorney. The following information may be required by your attorney.

Information about You and Your Background

Your Largo estate lawyer may ask you about the following information that is pertinent to you and your background:

Your full legal name
Your mailing and physical address
Your home phone number and your cell phone number
Whether you have lived in another state or country
The country where you are considered a citizen
Your date of birth
Your job

Family Information

Your Largo estate lawyer may ask about your marital and family history. In particular, he or she may ask for the following information:

Your current marital status
Date of your current marriage
Whether you are divorced or widowed
The name of your former spouse
The date of death of your former spouse or the date of divorce
Whether your deceased spouse left a will
State where your former spouse died or where the divorce was granted
Financial requirements listed in the divorce decree
Whether a prenuptial or postnuptial agreement is in place
Whether you have any children and their identification
Whether you wish to leave any children out of your will

Assets

Your lawyer also needs to know about the types of assets that you have. He or she will likely ask for the different types of financial accounts you have, their location and their relative value. You may be asked to provide information about real property you own, checking accounts, retirement accounts, life insurance policies, business interests, pension plans, trust interests and other assets of significant value.

For help with your estate plan, contact Coleman Law Firm at 727-461-7474.

An Overview of Estate Planning

Some of our clients come to Coleman Law Firm with the mistaken belief that estate planning is only for the elderly. However, it is especially necessary for anyone with minor children, assets to protect and anyone who wants to prepare for the future. Your estate plan helps you clearly communicate your wishes in writing through legal documents, including a will, a trust, a living will and powers of attorney. The focus is on helping your loved ones after your passing and protecting them from undue expense or pain. Our Dunedin estate planning lawyer can provide guidance through this process, no matter the size of your estate.

Meeting Your Estate Planning Needs

Our Dunedin estate planning attorney will discuss your goals and work to develop an estate plan tailor-made to meet your needs. We will answer your questions and address your concerns in order to ease your mind as you take care of these matters.

Parts of Estate Planning

The amount of estate planning you need depends on your specific concerns. For example, a will is used to transfer your property to those you designate, such as individuals, charities or businesses. The will also addresses the care of any minor children and usually sets up a trustee to represent you after your death. A living will is used to provide instructions regarding medical treatment if you cannot make your own decisions and generally includes addressing your preferences regarding any life-sustaining methods. A trust is an entity that manages monies and distributes them to one or more beneficiaries. While a will takes time to administer, a trust is immediately effective and avoids the red tape of probate. Our Dunedin estate planning lawyer can address your concerns regarding each of these areas.

Probate

Probate settles the decedent’s estate and transfers assets to the correct recipients. It is also the process of legally validating the will. The time frame can take from a few months to many years. Our Dunedin estate planning attorney can provide suggestions on how to minimize this time frame.

If you have questions or need help with organizing your affairs, call our Dunedin estate planning lawyer. Contact Coleman Law Firm at 727-461-7474 for further information.

Probate and Non-Probate Assets

One of the important aspects of developing an estate plan is using non-probate assets. Your Dunedin estate attorney can explain the key differences between probate and non-probate assets.

Probate Assets

Your Dunedin estate attorney may tell you that probate assets are those that are typically subject to probate. They may include assets that are listed in the decedent’s will or that are those mentioned in the laws of intestacy if the decedent had no will or his or her will was declared invalid. Your Clearwater Dunedin lawyer may further simplify this definition by saying that probate assets are usually those that are titled in the decedent’s name. For example, real property, bank accounts, CDs, stocks, bonds, brokerage accounts, vehicles, personal property, royalties from intellectual property, personal loans, an interest in a pending lawsuit and money are commonly probate assets. However, if there is a right of survivorship that is attached to the asset or if the asset is subject to a payable-on-death designation, the asset is usually not a probate asset. Additionally, many jurisdictions have a protected homestead law to prevent the decedent’s primary residence from being passed through the probate process. Furthermore, if any of these assets allowed the decedent to establish a beneficiary upon death, the asset is usually not subject to probate.

Non-Probate Assets

In contrast, your Clearwater Dunedin lawyer can explain that non-probate assets are those that do not pass under the terms of a will or the laws of intestacy. Additionally, your
Dunedin estate attorney may provide you with a list of typical non-probate assets. For example, life insurance is commonly a large portion of non-probate assets as long as the estate or the personal representative is not named as the beneficiary. Employer-provided retirement plans are common non-probate assets, assuming that the testator is not married. Likewise, funds that are part of a person’s Individual Retirement Account are usually non-probate assets. So are assets that are part of trusts and assets that pass with a right of survivorship, such as real property or a bank account.

Contact the Coleman Law Firm at 727-461-7474 for help with your estate plan.

Estate Planning and Fiduciary Management

Clearwater estate attorney Lawyers Business MeetingA fiduciary is a person who holds something in trust for another, such as management of assets. In estate planning, fiduciaries are deemed to have a great deal of power and authority in the management of one’s affairs and may be empowered to make decisions that are delicate and difficult when you, the testator, are not able. When planning your estate you will need to appoint one or more fiduciaries, and a Clearwater estate attorney will help in this regard.

Who Can Be Named Fiduciaries to Manage the Estate?

It is the duty of the named fiduciary to act on behalf of the testator and carry out responsibilities that serve his best interests. A fiduciary may be a person, but it may also be an entity. For instance, a tax advisor can be a fiduciary, but a bank, or your Clearwater estate law firm, may also assume this role.

It is important to point out that you should appoint individuals whom you feel are best suited to the various roles. You might also name one person to take on all of the fiduciary responsibilities. There is good reason for this. The individual you name must be someone you implicitly trust, one who you literally trust with your life. Moreover, you need to make sure that the person you name does not have a personal stake in your estate. This may exclude a spouse. The fiduciary may need at some point to make difficult decisions regarding the medical status of the testator, which may be hard for a spouse to do. You must also make sure that the person you name will not cause undue conflict in the family.

What Are the Specific Functions of the Fiduciary?

The fiduciary may make decisions when you are deemed incapacitated and unable to do so for yourself. Also, the fiduciary will carry out functions such as investing funds held in trust, offering financial planning advice and paying taxes. Your Clearwater estate attorney will tell you that when you choose the fiduciary, there are matters you need to consider:

• Does the person have sufficient knowledge of financial matters to help?
• Does he/she want to take on the role?
• Does the person live nearby, and will he/she be available when needed?

A Clearwater Estate Law Firm Can Help

If you are planning your estate and need to name fiduciaries, consult with a Clearwater estate attorney. Call Coleman Law Firm to arrange a meeting at 727-461-7474.

Charitable Trusts

Clearwater trusts attorney Father and Son Reviewing Estate Planning DocumentsOne of the chief goals of estate planning is to find ways of minimizing taxes on money left to beneficiaries. Sometimes settlors wish a portion of their assets to go to a charity as well. Charity trusts serve this purpose. The charitable remainder trust, or CRT, is one of the most common charitable trusts. A Clearwater trusts attorney will help you ascertain whether a charitable trust is right for you, and help you to set it up.

Charitable Remainder Trusts Explained

A CRT allows you, the settlor, to use part of the assets during your lifetime. A portion of the rest is left to named beneficiaries when you die, and the remainder goes to a charity that you name. The attorney with your Clearwater trusts law firm will tell you that one distinct disadvantage of this type of trust is that once it is established, you cannot add or remove beneficiaries. One way to circumvent this problem is to name heirs as contingent beneficiaries, which your will can order removed.

Types of Charitable Remainder Trusts

Three types of CRTs exist, and your Clearwater trusts attorney will help you choose which one is best suited to your needs: the unitrust, annuity trust or pooled income trust. While there are definite differences with each, in common is the fact that the named charity acts as trustee. The charity will invest the money in ways that will bring the highest return. It is the charity, then, that will pay assets out of the trust to beneficiaries for the appointed amount and duration.

It is important to note that the named charity must be one that is approved by the IRS for this purpose.

Tax Savings

You can enjoy tax advantages in a number of ways. For one, you can take a tax deduction spread over five years for the amount you gift to charity. It is important to note, however, that the IRS will calculate the amount you are likely to receive out of the CRT during your lifetime and deduct this amount from the tax-deductible gift.

You may also be able to help beneficiaries avoid a capital gains tax, since charities do not have to pay this. Unless your estate is very large, it is unlikely you will need to worry about an estate tax.

A Clearwater Trusts Law Firm Can Help You Establish a CRT

If you are interested in setting up a charitable trust or have questions, call a Clearwater trusts attorney today. Call Coleman Law Firm at 727-461-7474.

Living Trusts

Clearwater trusts lawyer meeting with clientsA living trust is a popular estate planning tool a Clearwater trusts lawyer can create that can be useful during the lifetime of the person as well as make the distribution of assets after death less complicated and less expensive.

A Living Trust is Revocable

The person who creates the trust, called the settlor or grantor, creates the trust in their lifetime and can add to it, change it in any way or revoke it entirely in their lifetime.

Essential Components

A Clearwater trusts attorney can explain that a legal trust requires a grantor, at least one named beneficiary, a trustee and assets that are legally transferred to the trust. Most often, the grantor is also the original trustee and thus retains complete control over the management of the trust.

Incapacity

A well-crafted trust should contemplate the possibility that the grantor, or other named trustee, may become incapacitated. By naming a successor trustee who assumes trust management in the event the trustee can no longer handle trust management duties, the trust can continue to operate to pay bills and make investment decisions without the need for a court-ordered guardian.

Death of the Grantor

Typically, at the death of the grantor, the trust becomes irrevocable and the plan for distribution of the decedent’s assets is implemented. The primary exception is for a trust created for a married couple. In such a case, most commonly the surviving spouse becomes the sole trustee upon the death of the first, and the trust becomes irrevocable after the death of the survivor. In either case, a named successor trustee then manages the trust.

Living Trust Advantages

The primary advantage is the avoidance of probate for those assets that have been properly transferred to the trust. Title to those assets remains in the trust after the grantor’s death. Assets that are not in a trust need to go through probate to legally allow transfer of title from the name of the grantor to the name of the beneficiary. For large estates, there may also be a federal estate tax advantage where a married couple has a joint trust.

Contact a Clearwater Trusts Lawyer for Legal Advice

Learn whether a living trust provides an advantage over a standard will for your particular needs. Call the Coleman Law Firm at 727-461-7474.

 

Estate Planning for Dual-State Residents

estate planning lawyer in Clearwater Balancing Money and HomeHaving a residence in another state is not uncommon for many Floridians. While this clearly provides many benefits for the individual’s lifestyle, it requires some extra planning by an estate planning lawyer in Clearwater.

State of Domicile

While a person may have a residence and spend time in more than one state, they may have only one domicile, which as defined by an estate planning lawyer in Clearwater, is the person’s legal home. If that fact is in dispute, the primary consideration is the person’s intent, as evidenced by some of the following:

• Where the person holds their driver’s license
• Where the person is registered to vote
• The mailing address the person uses for federal and state income tax purposes

Estate Probate

As each state has different laws regarding probate issues, there can be a significant impact on the heirs and beneficiaries depending on the person’s legal residence. This impact can be even greater in instances where one state is a community property state and the other is a non-community property state or where the person dies and leaves an intestate estate.

Other Considerations

Not only is the state of domicile on the date of death an important factor, so too is the consideration of which state the estate planning documents were executed in. Again, each state has its own laws. Issues to consider include:

• The executor; some states place limitations on who may be named as an executor if that person is not a state resident. At the very least, the fact that an executor may have to travel to another state for probate purposes should be considered.
• Advance healthcare directives; sometimes called living wills, these documents provide guidance for the type of medical care the person wishes to receive if incapacitated. The forms as well as the limitations may vary by state.
• Durable powers of attorney; these documents appoint an individual to handle a person’s financial needs if that person becomes incapacitated. This is especially important to consider if the person conducts business in both states.

Contact an Estate Planning Lawyer in Clearwater for Legal Advice

The planning necessary to properly safeguard an estate is more difficult for those with residences in two states. Be certain your interests are well protected. Call the Coleman Law Firm at 727-461-7474.

Storing Wills

Largo estate attorney Living Trust & Estate Planning DocumentAs you wrap up your session with a Largo estate attorney, you may learn about how to properly store your will. This is important information to know because if your will is not located, all of your hard work with establishing the best estate plan for you with your Largo estate attorney may be for nothing.

Reasons Why Storage Is Important

While many clients might express fear of their will being lost because of water damage, fire or theft, these occurrences are much less likely than family members being unable to find the original will. In some situations, the family does locate the will but only after they have incurred significant legal expenses.

Contingencies

Your Largo estate lawyer can also explain that it is important that you plan for contingencies. For example, your personal representative may die before you do and your alternate personal representative will be the one who needs to know where the will is. If you simply informed your original personal representative of the will’s location, this will not assist you if the contingency arises. Another possibility is that both personal representatives might predecease you. Planning for these contingencies can help your beneficiaries be spared from hassle and expense.

Storage Locations

Your Largo estate lawyer may give you several options for storing your will. For example, he or she may say that you might choose to store your will in the same location where you keep other important documents. Your Largo estate planning lawyer might inform you of the pros and cons of certain storage locations. For example, if you store the will in a safe deposit box, the contract with the bank may state that no one can access the contents if you die without certain documentation from a court, which would not help your beneficiaries who need to get the will before any such legal procedures were put in place. Your Largo estate attorney might recommend providing a copy of the will to the personal representative that you have named or storing the will himself or herself.

If you would like more information on this subject, contact Coleman Law Firm at 727-461-7474.

Where Should I Keep My Estate Planning Documents?

In our estate planning practice, we are frequently asked by our clients where they should maintain their original estate planning documents. In my opinion, the place to keep your original Last Will and Testament, Power of Attorney, Health Care Power of Attorney, Trust, and Living Will is with your lawyer. There are a number of reasons why this is advisable. This article attempts to address some of the major considerations for placing your estate planning documents with your attorney.

If you choose to keep the Will in a safe place at your home, you face a number of possible risks that could frustrate the purpose of your Will or otherwise impede the appropriate distribution under the Will or effectuate other documents related to your healthcare directives. For instance, if your Will is different from the distribution plan written for you by the Florida Legislature under the laws relating to intestate (meaning “without a Will”) succession, then you run the risk of an individual (who might be receiving less under your Will than they would receive under intestate succession) destroying the Will, thereby creating the possibility of argument by the beneficiaries that the previously executed Will was actually revoked by the deceased individual by the physical act of destroying the original.

Another potential difficulty in keeping the estate planning documents at your home is if the documents include an original Power of Attorney, the Power of Attorney could be misused by the Attorney-in-Fact to effectuate “advance planning” with respect to any estate planning or even divorce. By keeping the Power of Attorney at the law offices, it is less likely that a Power of Attorney could be misused by the person given authority under that Power of Attorney.

The third reason to keep your estate planning documents with your attorney is that sometimes situations occur outside your living area that might require a transmittal of estate planning documents. For instance, let us suppose that you are injured in an automobile accident while visiting your daughter in Nebraska. It might be necessary for a Health Care Power of Attorney, Power of Attorney or Living Will to be used at the hospital in Nebraska. A simple phone call to your lawyer results in those documents being faxed to the hospital so that your plans and interests can be protected and effectuated.

Some people have the idea that these important documents should be placed in a safe deposit box owned by the client. As discussed above, one of the difficulties with having the documents in your safe deposit box is that if you were injured outside of Florida and you were not available to access the safe deposit box, your important documents may not be available when they are urgently needed. Also, if you place the original Will in a safe deposit box, it is possible that it would be necessary upon your death to obtain a court order to get access to the estate planning documents. This would entail substantial legal expense, and perhaps, the expense of actually “drilling” out the lock on the safe deposit box if the key cannot be found.

Original documents are extremely important. In order to probate a Will, the court will typically require the production of the original Will. Unlike some states, Florida does not allow for the filing of original Wills before death. Safe deposit boxes can be difficult to access after death and, even after the death, what protection is there from the person entering the box? Additionally, there is a risk from an unscrupulous heir that may choose to destroy a document that does not serve their interest.

Finally, this issue cannot be properly addressed without talking about the tremendous risk associated with a Power of Attorney. A Power of Attorney can be used by any individual that might be designated thereunder to transfer assets in such a way that would effectuate “pre-divorce planning” or “pre-death planning” that would frustrate the estate plan of the client. The procedure followed at the Coleman Law Firm is that the Power of Attorney is not generally provided to the client. Rather, a letter is prepared by our law firm indicating in what circumstances a Power of Attorney will be released to the designated Attorney-in-Fact so that there will be some degree of protection that the Power of Attorney will not be misused to address such issues as the Attorney-in-Fact’s financial difficulties or to otherwise frustrate the intent set forth in the Last Will and Testament of our client.

Coleman Law Firm works to document the client’s intent with respect to the distribution of their wealth and their healthcare decisions. It is critical that the documents prepared by our law firm be effective and enforceable at the time of the death or disability of our client.

© Jeffrey P. Coleman P.A. 2011

Estate Planning Smarts For New Moms

Having a child is often the first time people think about their estate plans. New moms have much on their mind. I highly recommend the second edition of Deborah L. Jacobs’ book Estate Planning Smarts: A Practical, User-Friendly Action-Oriented Guide to help them plan for their family’s future.

Caring for yourself. Contrary to what many think, estate planning is not just for millionaires and billionaires. Everyone should have at least a basic plan that provides for what will happen in the event of disability or illness. Failing to have an estate plan can hurt the people you love.

The first chapter of Estate Planning Smarts is titled, Nothing Lasts Forever. The subtitle suggests to [r]ead this chapter even if you are hearty and clear-headed. This chapter defines and discusses documents that everyone needs in their estate plan “ a power of attorney, HIPAA release, living will, and health care proxy.

Once you have these basic estate planning documents, you will need a place to store them. The second edition of Estate Planning Smarts has a new and very informative section on organizing financial records. Jacobs discusses various options that you have, including keeping your records in loose-leaf binder, on a computer, or on an online storage site.

Providing for your children. Jacobs informs that estate planning entails providing for your children’s future and making sure someone will care for them if you suddenly perish.

Estate Planning Smarts has an entire chapter devoted to anticipating the needs of young or disabled children. Chapter 5 gives tips about choosing a guardian to take care of your child in the event something happens to you. This chapter also discusses how to leave sufficient funds for your child and how to put money in good hands. The to-do list at the end of the chapter can help you avoid potential legal and economic pitfalls.

Chapter 8 discusses a topic that many think about only after they become parents: life insurance. Jacobs discusses how life insurance can serve your estate planning goals, how to avoid tax traps, and finding the best way to fund the premium.

Chapter 9 is also essential reading for a mother. It discusses how to pay for health care and education. This chapter begins by discussing custodial accounts for minors. It then discusses funding Section 529 plans and Coverdell Education Savings Accounts, and financing heath care and education by using a trust. There are many choices to consider and the to-do list at the end of the chapter asks some questions and tells you the action to take if your answer is yes.

Your assets. Estate Planning Smarts has advice on deciding who gets what (chapter 2). It also has chapters devoted to specific assets “ retirement accounts (chapter 7) and houses (chapter 11).

Business owners. Today, many mothers are also business owners. Some women are mothers, business owners, and the bread winners in the family. These entrepreneurial mothers will find the advice in chapter 12 invaluable. As the subtitle states, Read this chapter if you have your own business or share in a family-held enterprise.

Taxes. Jacobs discusses estate and gift taxes in plain English. Chapter 3 (Understanding the Tax System) is up-to-date and covers all the ramifications of the 2010 estate tax overhaul. As the subtitle to the chapter informs, Read this chapter even if you think estate taxes won’t affect your heirs. If saving taxes is a high priority for you, then chapter 15 is also invaluable: Give Now, Save Tax Later.

Giving. If you want to give to your family, chapter 13 is key. Many new moms take motherhood as an opportunity to turn the table and celebrate their own moms and families. Chapter 17 discusses philanthropic giving and gives tips on how you can support the causes that you care about.

Why Estate Planning Smarts? You can’t afford to neglect estate planning. Estate Planning Smarts is, therefore, a must-read. It is written with you in mind. 

  • Chapter previews. Each chapter begins with topics that you will learn about. 
  • Great writing. Jacobs has the rare talent of discussing complex issues in a way you can understand. Jacobs is an award-winning business journalist and a lawyer. Her writing is clear and concise.
  • Informative charts and graphs. Estate Planning Smarts uses charts and graphs that provide perspective and insight.
  • Life-changing to-do lists. Each chapter ends with a very useful to-do list. Estate Planning Smarts is not just for reading; it is for taking action.
  • Handy glossary. There is a very useful glossary at the end of the book. 
  • Detailed indexEstate Planning Smarts has a 26-page index that will allow you to find the information you are looking for.

The perfect gift. Tell new moms you know happy Mother’s Day and give them a copy of Estate Planning Smarts as a gift. It is a great way to show them you care, and they will appreciate it. I gave the first edition ofEstate Planning Smarts to new mothers that I knew and they were always grateful for the gift. This year, I will give them the second edition ofEstate Planning Smarts. Jacobs has revised the book by bringing it up-to-date, and she has added helpful new information. For example, on pages 289-291, Jacobs gives tips on how to start the estate planning conversation with family members. On pages 291-292, she emphasizes her objection to DIY estate planning.

For all mothers. Estate Planning Smarts has useful information for all mothers. For example, grandmothers would especially find interesting chapters 14 (What You Can Do for Grandchildren), 13 (Subsidize Friends or Family) and 9 (Pay for Healthcare and Education). Anyone who has done an estate plan before should read chapter 19 (Keep Your Plan Current).

For all women. Jacobs is on a mission to educate women about estate planning. Tomorrow, May 9, she will give a talk at Barnard, Estate Planning Is A Women’s Issue. Here is the description of the talk:

Estate planning is important for both sexes, but for various reasons, it affects women more profoundly. As a group, women live longer than men, earn less than them, and are more likely to spend their final years without a spouse or partner. Therefore women need to be especially vigilant about providing for their financial security. Whether you’re doing an estate plan for the first time, or revising a plan to reflect changes in your life, this program will cover the key issues, including:

  • Caring for yourself
  • How the new tax law affects estate planning for couples
  • How to start a conversation about estate planning – with your spouse or partner, with adult children, with aging parents
  • Should your plan be equal or fair?
  • The impact on planning of subsidizing adult children and grandchildren
  • What are non-probate assets and key pitfalls that surround them

This talk will address estate planning issues for women, but of course, the men in their lives are also welcome. Jacobs will adapt this talk and speak to other audiences around the country during the year ahead. (Forbes, May, 8 2011)

Estate Tax Tips for Married Couples

Thanks to the generous $5 million exemption for individuals who pass away in 2011 or 2012, the assets of relatively few people in the United States will be exposed to the federal estate tax over the next few years. To see if you and/or your spouse’s estate might bump up against the exemption, try our estate tax calculator and read on for estate-tax-saving tips.

Take Advantage of the Unlimited Marital Deduction

If your spouse is a U.S. citizen, you can leave any amount to him or her with no federal estate tax hit. If you are a U.S. citizen, your spouse can do the same. This is the so-called unlimited marital deduction privilege. For married couples, the $5 million federal estate tax exemption and the unlimited marital deduction privilege provide significant federal estate tax shelter for those who die in 2011 or 2012.

If either you or your spouse has a large estate, however, leaving everything to your spouse can result in your spouse having an estate that exceeds the federal estate tax exemption when he or she dies. In that case, you need to look at the other estate-tax-saving tips.

Take Advantage of Portable Estate Tax Exemption

For 2011 and 2012, you can direct the executor of your estate to leave any unused federal estate tax exemption to your surviving spouse. For example, if you die in 2011, you can leave everything to your spouse, including your unused $5 million exemption. Your spouse would then have a $10 million exemption if he or she dies in 2011 or 2012 (his or her $5 million exemption plus your unused $5 million exemption). Unless Congress takes action, however, portable estate tax exemption will expire at the end of 2012.

Make Bequests to IRS-Approved Charities

If you had died in 2010, you could have left everything to relatives and loved ones and no federal estate tax would have been due (even for billionaires). For 2011 and 2012, that’s not the case.

You might want to change your estate planning documents to direct the executor to give away more to IRS-approved charities in order to get your taxable estate down to the current $5 million estate-tax-free ceiling, or $10 million if you leave everything to your surviving spouse (including your unused $5 million federal estate tax exemption).

Put another way, you and your spouse can together leave up to $10 million to relatives and loved ones without any federal estate tax hit if you (both) die in 2011 or 2012. If you leave more, there will be a federal estate tax bill to pay. But the taxable value of your estate is reduced by donations that the executor of your estate is directed to make to IRS-approved charities. Of course, increasing charitable donations to avoid the estate tax means leaving less to relatives and loved ones.

Make Annual Gifts to Relatives and Loved Ones

Thanks to the annual federal gift tax exclusion ($13,000 for 2011 and probably the same for 2012), making annual gifts up to the exclusion amount will reduce the taxable value of your estate without reducing your lifetime $5 million federal gift tax exemption or your $5 million federal estate tax exemption. The same holds true for gifts by your spouse.

With two adult children and four grandchildren, for example, you and your spouse could give them each $13,000 in 2011 for a total of $156,000 (6 x $13,000 x 2). Then, do the same thing in 2012. Over the two years, your taxable estates would be reduced by $312,000 (2 x $156,000) with no adverse federal gift or estate tax effects.

Pay School Expenses (Not Room and Board) or Medical Bills for Relatives and Loved Ones

You can give away unlimited amounts for these purposes without reducing your $5 million federal gift tax exemption or your $5 million federal estate tax exemption“as long as you make the payments directly to the school or medical service provider. The same holds true for gifts by your spouse.

Give Away Appreciating Assets to Relatives and Loved Ones While You Are Still Alive

Thanks to the federal gift tax exemption for 2011 and 2012, you can give away up to $5 million worth of appreciating assets (stocks, real estate, etc.) without triggering any federal gift tax hit. So can your spouse. This can be on top of cash gifts to relatives and loved ones that take advantage of the annual exclusion and on top of cash gifts to directly pay college tuition or medical expenses for relatives and loved ones.

Key Point: Gifts in excess of the annual exclusion amount ($13,000 for 2011) reduce your $5 million federal gift tax exemption and your $5 million federal estate tax exemption dollar-for-dollar. But that is OK if you are giving away appreciating assets“because the future appreciation will be kept out of your taxable estate.

If you and your spouse each give stock worth $100,000 to your favorite relative in 2011, for example, the gift uses up $87,000 of both of your $5 million federal gift tax exemption ($100,000 $13,000 annual exclusion) and $87,000 of both of your $5 million federal estate tax exemption. Utilizing your exemptions like this makes sense if you are giving away appreciating assets“because the future appreciation will be kept out of your taxable estate.

Set Up Irrevocable Life Insurance Trust

As you may know, life insurance death benefit proceeds are usually federal-income-tax-free. However, the proceeds from any policy on your own life are included in your estate for federal estate tax purposes if you have any incidents of ownership in the policy. It makes no difference if all the insurance money goes straight to your beloved Aunt Myrtle.

It does not take much to have incidents of ownership. If you have the power to change beneficiaries, borrow against the policy, cancel it, or select payment options, you have incidents of ownership. (The preceding is not a complete list of things that count as incidents of ownership.)

This unfavorable life insurance ownership rule can cause federal estate tax exposure for people who believe they have none.

Key Point: The life insurance ownership rule is more likely to adversely affect unmarried people. Why? Because death benefit proceeds from a policy on the life of a married person can be left to the surviving spouse without any immediate federal estate tax hit, thanks to the unlimited martial deduction privilege (assuming the surviving spouse is a U.S citizen). However, all the insurance money going into your surviving spouse’s coffers could cause his or her estate to eventually exceed the federal estate tax exemption.

The estate-tax-saving solution is to set up an irrevocable life insurance trust to own the policies on your life. Since the trust, rather than you, owns the policies, the death benefit proceeds are not counted as part of your estate (unless the estate is named as the policy beneficiary which would defeat the purpose). You are still able to direct who gets the insurance money because you get to name the beneficiaries of the irrevocable life insurance trust (typically your children and/or grandchildren).

There may be some complications. When you move existing policies into the trust, you must live for at least three years. Otherwise, the death benefit proceeds will be included in your estate, just as if you still owned the policies at the time of death. Also, when existing whole life policies are transferred into the trust, their cash values are treated as gifts to the trust beneficiaries. Finally, you may have to jump through some hoops to get the cash needed to pay the annual insurance premiums into the trust without adverse gift tax consequences. All these issues can usually be finessed with the help of an estate planning professional.

When you have a large estate that will inevitably owe some federal estate tax, you can set up an irrevocable life insurance trust to buy coverage on your life. The death benefit proceeds can then be used to cover all or part of the estate tax bill after you die. This is accomplished by authorizing the trustee of the life insurance trust to purchase assets from your estate or make loans to the estate. The extra liquidity is then used to cover the estate tax bill. When the irrevocable life insurance trust is eventually liquidated by distributing its assets to the trust beneficiaries (usually your children and/or grandchildren), the beneficiaries will wind up with the assets purchased from your estate or with liabilities owed to themselves. Bottom line: the federal estate tax bill gets paid with dollars that are not themselves subject to the federal estate tax.  (SMARTMONEY, MARCH 18, 2011)

Clearwater probate lawyer

Women and the Law

Traditionally, women have been the nurturers in our society. This is especially true in the context of family relationships. Depending on how family is defined for her, a woman may care for a husband, children, pets, parents or even in-laws. Amidst all of her caring for others, however, too many women overlook important legal and financial matters.

Women play a variety of roles in their lifetime. For example, depending on her unique circumstances, a woman may be a daughter, an aunt, a wife, a friend, a mother, a grandmother or even a great-grandmother. Traditionally, especially in her family relationships, a woman is likely the nurturer or caregiver. While she is busy meeting the needs of others, a woman may forget to take care of her own needs; even needs as fundamental as her own Life & Estate Planning.

Who will take care of her, the important people in her life and her property if she is unable to do so? Who will be the caregiver for the caregiver?

Life Planning

Would your loved ones be prepared to take care of your legal and financial responsibilities if you were incapacitated? The law says every adult American must make their own personal, health care and financial decisions. Certainly the daily news and our own personal experiences tell us that a serious injury or illness can strike anyone at any time.

Without proper Life & Estate Planning your loved ones will be unable to automatically step in and handle routine legal and financial matters for you.

For example, regardless of their relationship status to you (e.g., this includes a spouse), no one can sign your name to a tax return, a real estate deed or the back of a check unless you have given them authority to act on your behalf through appropriate legal documents.

In addition to legal and financial matters, your loved ones will be barred from access to your medical information, verbal or written, without your prior authorization because of the legally protected confidential relationship between patients and their physicians.

Note: Access to such medical information is crucial for your loved ones to advocate on your behalf regarding important life and death treatment decisions, to include obtaining second opinions or transferring you to a new hospital.

In the absence of proper planning, your loved ones may be forced into court to obtain the legal authority required to care for your personal, health care and financial needs. This likely will be an expensive and inconvenient experience for them.

Estate Planning

If given the choice of planning for their own death and anything else, most normal people would choose anything else. It is just human nature. Nevertheless, no one wants to be remembered for leaving a legal and financial mess for their loved ones to sort out. What, if any, legal arrangements have you made? Whom do you want to care for your loved ones, charities or pets, if you are no longer around to care for them?

As a rule of thumb, surviving spouses are particularly vulnerable during the first year they are widowed. Many grief counselors advise against making any major life decisions during that first year. Feelings of grief can be expressed in many forms, to include feelings of loneliness and abandonment. As a result, many surviving spouses remarry before they probably should. If your spouse were to remarry, will your Estate Plan protect your assets for them in the event of a subsequent divorce or for your children should your spouse predecease his next spouse?

If you have minor children, what legal arrangements have you made for their care in the event they become orphans? Who will provide a safe and secure home for them, as well as help develop their moral character? Who will manage their inheritance and protect it for them and from them? The failure to address these issues may negatively affect your children well into adulthood.

Even if you have no children, you likely have definite ideas about who should inherit and who should not inherit your assets. Whether these objects of your bounty are humans, animals, birds, fish or reptiles, only proper Estate Planning can fulfill your objectives. In the absence of an Estate Plan containing your instructions, state law will control. In most instances, these laws would distribute the estate assets to your surviving next-of-kin, which may differ greatly from your wishes.

Financial Planning

Whenever you invest your money in an asset, you do so with the expectation that you will receive a return on your investment in that asset. At some future point you expect both the return of your money and the return on it. The potential that you will be disappointed in your expectations regarding your investment in a given asset is known as its investment risk. In fact, the greater the risk of losing your original investment, the greater the potential return on it. Conversely, if you play it safe and the risk of losing your original investment is low, then your potential return will be low as well. Accordingly, it can be said that this financial law of proportionality is analogous to a well-known physical law of proportionality: For every action there is an equal and opposite reaction. Without an appreciation of this law of proportionality in the physical world, travel by jet aircraft would be impossible. Without an appreciation of it in the financial world, a prudent investment strategy would be impossible. The key, therefore, is to balance the potential risk and reward for a given investment according to your personal risk tolerance. It is critical that your risk tolerance is reflected in the allocation of your assets.

Asset Allocation

Don’t put your eggs in one basket. That is a proven maxim that also is an appropriate working definition of asset allocation. Simply put, asset allocation is an investment strategy that seeks to balance risk and reward by spreading the investment of your money over a number of assets types. Furthermore, your unique approach to asset allocation will vary based on a variety of factors, to include your investment goals (e.g., accumulation versus current income), your time horizon (e.g., college funding versus retirement), your need for liquidity (e.g., the ability to readily turn the investment into cash), your risk tolerance (e.g., are you more interested in the return of your money versus the return on your money?), your tax status (e.g., the impact of an investment on your tax burden), and current/forecasted economic conditions (e.g., how optimistic or pessimistic are you about the present and future of inflation, interest rates and the overall economy?). The role of a qualified financial advisor is to help you determine your risk tolerance based on such factors and design a basket (portfolio) of eggs (investments) that is most appropriate for you. Then, over time, your financial advisor will help you adjust the eggs in your basket as your circumstances change.

This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material.

Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]

Successful Conclusions

Estate Planning is a Lifetime Process, not a one-time event. Though estate administration is the final stage in the process, a successful conclusion is dependent on proper completion of each of the preceding stages.

Prince or pauper, life’s journey eventually comes to an end for us all. Death, it has been said, is an equal opportunity experience. When your appointed time arrives, will your loved ones find your personal and financial affairs in order or in disorder? What grade will they give your Life & Estate Plan once it has passed through the three basic stages of Estate Administration? These basic stages are Collection & Management; Payment of Expenses; and Asset Administration & Distribution.

Collection & Management

The initial responsibility of your appointed fiduciaries will be to identify, safeguard and insure your assets. Unfortunately, if they cannot identify your assets, then it will be impossible to safeguard and insure your assets. Have you created and maintained an up-to-date inventory of your assets? At a minimum, your inventory should provide sufficiently detailed information about your assets so your fiduciaries can find them.

If you have a properly funded Revocable Living Trust along with a current inventory of all of your assets, then you will dramatically lighten the Collection & Management burden on your fiduciaries. Nevertheless, even if your Life & Estate Plan does not include a Revocable Living Trust, a current inventory will spare your fiduciaries considerable time, aggravation and money in fulfillment of their initial responsibility.

Payment of Expenses

With your assets collected and under management, your fiduciaries are ready to begin paying the expenses you left behind. These expenses include satisfaction of your just debts, your remaining tax liabilities, and your various post-mortem expenses. Time is of the essence in resolving these financial loose ends.

Your fiduciaries will be held personally liable for failing to dot all of the i’s and cross all of the t’s when it comes to dealing with the creditors of your estate, to include the IRS. This potentially unending liability extends beyond third-party creditors to your own estate beneficiaries. For example, certain post-mortem planning techniques, such as various elections and disclaimers must be exercised prior to filing the federal estate tax return (due within nine months of your death). The failure to properly exercise such post-mortem techniques may result in adverse tax and non-tax consequences.

Asset Administration & Distribution

Assuming your fiduciaries still have assets under management after paying your debts, taxes and expenses, then it is time for them to fulfill their final responsibility to administer and distribute your assets as stated in your Life & Estate Plan. This is the moment of truth: Will your assets be protected both for and from your loved ones; or will they be lost through their divorces, lawsuits, bankruptcies and squandering. Without proper Life & Estate Plans for this stage of Estate Administration, your fiduciaries may have no choice but to deliver your assets to parties you would otherwise intend to disinherit, rather than to your loved ones. Like trying to put toothpaste back in its tube, once you are gone the opportunity to change your administration and distribution plans is lost.

Alternatively, consider taking steps now to help ensure a successful conclusion to your Life & Estate Plans. For example, remarriage provisions may help protect your assets for your surviving spouse and children. Long-term discretionary trust provisions may protect your assets both for and from your heirs, even for unborn generations in perpetuity. You worked a lifetime for your assets, but without proper planning your financial legacy can be taken or lost in the blink of an eye.

Aside from your tangible financial legacy, have you considered leaving an intangible character legacy for your loved ones as part of your Life & Estate Plan. For example, you might write individually addressed last letters to remind your loved ones of your love and your confidence in them to press on to their own successful conclusions. Take time today to draft these last letters. Write the letters in your own hand. This is a lost art in this computer age of word processors and email. Then, in your Life & Estate Plan, instruct your fiduciaries to mail these last letters to your loved ones after your debts, taxes and expenses have been fully satisfied. By the way, the inventory of your financial assets is an excellent place to keep both these last letters and the instructions for their delivery.

Funding Your Living Trust

Trust funding is the process of placing your assets under the ownership and control of your Revocable Living Trust. Only those assets which are titled in the name of your Trust (or which name your Trust as beneficiary where appropriate) will be controlled by the terms of your Trust in the event of your incapacity or death. Otherwise your assets may be subject to probate, may lose valuable protection from estate taxes and may not pass to your beneficiaries as specified in your Life & Estate Plan.

There are three fundamental steps in the Trust Funding process:

1. Identify all of your assets by:

  Type: For example, is this asset a bond certificate, a certificate of deposit, or a publicly-traded stock certificate?

Value: How much is it worth and is it encumbered by debt?

Ownership: Do you own it individually or jointly with a spouse or others?

2. Transfer Ownership:

Once you have identified your assets, you can begin transferring ownership to your Trust by sending written notice to the various institutions involved. In that notice you identify the asset, the name of your Trust and then request the change of ownership or beneficiary designation.

Note: Do not be surprised if they respond with a request for completion of their own in-house form.

3. Maintain Your Trust Funding:

As you acquire additional assets, be sure to title them with ownership by your Trust or use the appropriate beneficiary designation from the outset.

Conclusion

Life & Estate Planning is a lifetime process, not a one-time event. A well-designed estate plan must be regularly reviewed and updated, properly funded, and properly administered. Seek appropriate legal counsel at each step along the way to ensure a successful conclusion.

This publication does not constitute legal, accounting or other professional advice. Although it is intended to be accurate, neither the publisher nor any other party assumes liability for loss or damage due to reliance on this material.

Note: Nothing in this publication is intended or written to be used, and cannot be used by any person for the purpose of avoiding tax penalties regarding any transactions or matters addressed herein. You should always seek advice from independent tax advisors regarding the same. [See IRS Circular 230.]