Estate Planning FAQs
In simple terms, estate planning involves putting your affairs in order so as to maximize the benefits your assets can provide to you during your life and to those you desire to benefit from your assets after your death. Estate planning has three objectives:
1. To ensure that your assets will pass upon your demise to those persons you designate in a manner that will provide maximum benefits to the beneficiary.
2. To reduce or eliminate the tax burden on your estate.
3. To provide for the passing of your assets after your death to your chosen beneficiaries without the necessity of probate, time delays, or inconveniences.
Many people mistakenly think estate planning only involves the writing of a will. Estate planning, however, can also involve financial, tax, medical, and business planning.
What is a health care surrogate or health care proxy?
A health care surrogate designates a person, or persons, whom you want to make medical decisions on your behalf if you ever become incapacitated and unable to make medical decisions for yourself. It is important to note that, legally, your health care surrogate has the authority to override your living will, so be certain that the person, or persons, you choose are informed of and understand the importance of your wishes in these matters.
How much does estate planning cost?
It depends on your individual circumstances and the complexity and planning required to achieve certain goals and objectives. Generally, the costs will include the lawyer’s charges for discussing your estate plan with you and for preparing your will, trust agreement, a power of attorney, or other necessary legal documents. Costs for estate planning and legal services are discussed with the client and agreed prior to any work commencing; our initial consultation is completely free.
Who should be my executor or trustee?
That is your decision. You could name your spouse or domestic partner as your executor or trustee. Or you might choose an adult child, another relative, a family friend, a business associate, or a professional fiduciary, such as a bank or individual licensed to act in such a capacity by the state of Florida. Your executor or trustee does not need any special training. What is most important is that your chosen executor or trustee is organized, prudent, responsible, trustworthy, and honest.
Probate is the court-supervised, public proceeding used to change the title of assets from the name of an individual who has passed away into the name of the living beneficiary. It is also the process by which creditors of a decedent file claims to collect their debts and where interested parties who have a complaint regarding the deceased can file a complaint (a will contest).
A living trust is another way of saying a revocable trust. Revocable trusts allow a person to name themselves as trustee to manage assets for themselves as a beneficiary. It is created for the express purpose of avoiding probate. A living will does not prevent estate taxes nor does it remove funds from an individual’s control or countable estate for Medicaid or Veteran’s benefits analysis.
Why should I have a trust?
Many estate plans do not require a trust. However, trusts are often essential to ensure the proper management of property left to individuals who are minors, disabled, or irresponsible. Trusts—such as credit shelter trusts, disclaimer trusts or irrevocable life insurance trusts—can also significantly reduce the death taxes of larger estates.
A trust involves the transfer of property from one person (settlor) to the control of another person (trustee) to be held and used for the benefit of a third person (beneficiary).
A living will is a legal document that allows you to express your wishes to doctors in case you become incapacitated. In a living will, you can outline whether or not you want your life to be artificially prolonged in the event you suffer from a terminal condition, are in a persistent vegetative state, or are diagnosed with an end stage condition.
What happens if I die without a will in Florida?
If you die without a valid will, Florida statutes will determine how your property will be divided, which may conflict with the way you would want to have your assets distributed. According to the American Bar Association, 55 percent of Americans die without a will or estate plan.
Isn’t a will all I really need?
A will is necessary to ensure that your wishes are honored after your death—including your choices of estate administrator, beneficiaries, and guardians for your minor children. Other documents are needed to fully carry out your wishes and manage your assets in the event you are temporarily or permanently disabled. In addition to a will, you should also have a durable power of attorney, a medical power of attorney, a healthcare directive, and a HIPPA authorization.
Who needs estate planning?
You do, whether your estate is large or small. Without adequate estate planning, you forfeit your opportunity to make many important decisions such as:
• Choosing the person who will make health care decisions for you if you are incapacitated and not able to do so.
• Naming a guardian for your minor children in the event of your incapacity or death.
• Naming a guardian to manage the assets you leave behind for your minor children and specifying when and how you would like those assets distributed.
• Specifying how and by whom your assets will be managed if you are temporarily or permanently disabled.
• Specifying how and to whom your assets will be distributed when you die.
What does an “estate” consist of?
An “estate” consists of all your assets including real estate, bank accounts, stocks and other securities, life insurance policies, and personal property such as cars, jewelry, and artwork. The value of your estate is equal to the fair market value of the assets minus your debts. The value of your estate is important in determining whether your estate will be subject to estate taxes after your death and whether your beneficiaries could later be subject to capital gains taxes. Ensuring that there will be sufficient resources to pay such taxes is another important part of the estate planning process.