A Revocable Trust Is the Best Estate Option Should You Become Ill or Incapacitated

An important comfort to getting older is knowing that your hard-earned and carefully managed assets can be passed on to your family and other beneficiaries. But what happens if age or illness prevents competent supervision of one’s estate? It’s a difficult question to grapple with, but not one without an answer.

A revocable trust offers the best of all options. A revocable trust, or living trust, is a legal document that puts your chosen assets into a trust for your benefit during your lifetime. Income is earned on the assets and trust provisions can be easily adjusted for any number of reasons.

At the time of your passing, a handpicked representative, known as a “successor trustee,” will distribute your estate according to your wishes. A revocable trust can also outline how it should be determined that you are no longer able to manage your affairs. For example, a diagnosis from your personal physician along with a separate, independent medical opinion.

Your successor trustee can then seamlessly step in and manage both your finances and property without missing a beat. This continuity is a major advantage, and cannot be as easily obtained through a standard will and testament.

A will would require your loved ones to rely on other documents such as a durable power of attorney or health care advance directive. Without advanced directives like these, your loved ones would have to seek a court-appointed guardian or conservator. This can be expensive, inconvenient and overwhelming for distraught family members. The court-appointee would also have to report back to the court regarding incurred expenses, the sale of property, and other items.

It bears repeating: Your personally chosen successor trustee will not be subject to court intervention as in the case of a will. And if you dispute a determination of incapacity, the revocable nature of a living trust allows you to retain control of your estate.

A will combined with a durable power of attorney can accomplish similar objectives regarding the transfer of estate management, but since the person giving the power of attorney owns the assets, probate administration would be required at the time of death – something many people try try to avoid.

Probate proceedings involve administration costs, including court fees and likely attorney fees, and are public record. A revocable trust circumvents probate entirely. We are ready to discuss this with you further. We encourage you to schedule a meeting with a member of our legal team to discuss the Florida estate planning that is right for you now and in the future.

Should I include life insurance in my estate plan?

Everyone should have an estate plan – and everyone should have life insurance. Some might not realize that there are ways to combine both so their heirs benefit the most.

An estate planning attorney can help you put your life insurance policy in a trust. Done properly, your beneficiaries would not have to prove their right to inherit assets in probate court.

You can designate your life insurance policy so that the trust is its beneficiary; that way, your death benefits flow directly into the trust. There are two kinds of living trust that work for this.

The first is a revocable living trust. Your attorney would name the trust which as your beneficiary, which would add to the death benefits you may have already placed in the trust. The nice thing about a revocable living trust is that it can be changed at any time, for whatever reason. This method immediately ties your life insurance payout to the rest of your estate plan.

An irrevocable living trust is similar, except that once it is in place it cannot be changed.

Whichever you decide, putting your life insurance into a trust protect the money from creditors and potential estate taxes. For instance, if you had a brokerage account worth $2 million, your heirs would be subject to federal estate taxes. It also may end up in probate, which can take years to settle and is usually expensive.

If your heirs inherited a $2 million life insurance policy that in which they beneficiary is an irrevocable trust, the money would be safe from federal estate taxes. Florida does not have a state inheritance or death tax.

Regardless, you would be much better off if you inherited $10 million as the beneficiary of an irrevocable life insurance trust (ILIT). The money would pass outside of Jack’s estate, completely removing those proceeds from the nasty (40%) federal estate tax as well as any state death or inheritance taxes that may apply.

The trustee of the life insurance trust would also be able to pass that money along quickly and without the oversight of the probate court. Your inheritance would reach you faster and without the tax burden. In fact, most life insurance policy claims are settled within 30 days.

Our experienced and trusted estate planning attorneys have been serving Treasure Coast families for decades, and Michael Fowler is one of only nine attorneys in the state of Florida who is double board-certified in wills trusts and estates and in elder law.  Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Five estate planning tips for the newly widowed

On average, women live five years longer than men, and it is currently estimated that 70 percent of baby boomer women will outlive their husbands. According to an ING Direct USA survey, almost 80 percent of boomer women say they lack the financial savvy to make the right financial planning decisions and 40 percent still leave financial planning totally up to their husbands.
Taking action now can spare you from financial panic; here are some recommendations:
Start estate planning now. Many women cannot count on having a lot of time to get their financial affairs in order after a spouse dies. Make sure all your accounts are jointly held and steps are taken to avoid probate if possible. You will want continuing access to all your assets if your spouse dies before you do.
Educate yourself. Know what you have in terms of assets and where to find those assets. Sit down now with your spouse and make a full list of all accounts, passwords and contacts and keep that list in a safe place.
Delay Social Security. If a husband was the primary earner and can hold off taking Social Security benefits until age 70, a surviving wife will qualify for a significant benefit premium.
Don’t make hasty decisions about money. Experts recommend that widows not make any major decisions – financial or otherwise – in the first six months of widowhood.
Get professional help. The help of an estate planning attorney or financial planner can be invaluable following the death of a spouse, helping you navigate the estate administration process and ensuring your financial future.
With the proper guidance, you can protect your finances and spare your loved ones the frustration of having to make costly and difficult decisions. Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Special Needs Trust Fairness Act Becomes Law

Special Needs Trust Fairness Act Becomes LawIndividuals with disabilities now have the right to create their own self-settled special needs trust (SNT) without having to go to court, thanks to the President’s signing of the 21st Century Cures Act into law on December 13, 2016.

Section 5007 of the 21st Century Cures Act includes language from the Special Needs Trust Fairness Act of 2015, adding the words “the individual” to the existing statute. Prior to this change, disabled individuals without a living parent or grandparent could not create a self-settled SNT without having to go to court.

The effective date of the amendment to the Special Needs Trust Fairness Act of 2015 applies to trusts established on or after December 13, 2016.

A self-settled SNT differs from special needs trusts created by third parties for the benefit of a special needs individual. Special needs trusts are funded with the third party’s assets or other sources and are a common estate planning tool to improve the qualify of life for a disabled individual. Upon the death of the disabled individual, the remaining assets in a third-party trust can pass to other family members.

Self-settled SNTs must include a provision that, upon the death of the disabled individual, the state’s Medicaid agency will be reimbursed for the cost of any benefits received by the individual. Payments from the SNT to the disabled individual may be limited depending on state law and could require an annual accounting to the state Medicaid agency. There are also rules that must be strictly adhered to so that the disabled individual is not disqualified from receiving Medicaid or SSI (Supplemental Security Income) benefits.

If you are considering a special needs trust, you should consult with an experienced special needs estate planning attorney to determine which trust vehicle works best for your needs.

If you’d like to learn more about how we can help you with your estate planning, please contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Why It’s Necessary to Review Your Will or Trust

Why It’s Necessary to Review Your Will or TrustJust like a sailor must make corrections to avoid being blown off course, it is necessary to periodically review your estate planning documents — including your will or trust — to determine if any course corrections should be made.

Conducting a proper review of your documents will help identify the potential need to update because of:

Changes in family circumstances – births, deaths, marriages or divorces that may affect the people named in your documents such as beneficiaries, executors, decision-makers, etc.

Changes in law – these include changes to federal and state tax laws or regulations that open up new planning strategies.

Changes in assets – Has your net worth increased or decreased? This may mean that your current plan is no longer a good fit for what you want or need.

Funding of assets – it is common to discover that someone has not properly completed the transfer of assets into their trust, or have beneficiary designations that are inconsistent with the distribution language in their estate plan.

Inevitable changes in your life and/or the law dictate that a thorough review of your planning documents be conducted regularly to ensure that they still comply with your original intent.

A comprehensive review of your estate plan is intended to uncover those “gaps” that might not otherwise be discovered until it is too late. When that happens, it will be your family will have to deal with the unfortunate consequences.

At The Estate, Trust and Elder Law Firm, P.L. we help our Treasure Coast clients develop and implement comprehensive estate planning strategies personally tailored to their unique situation, needs, and goals.   Contact us for your initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

7 Key Benefits of Creating a Trust

7 Key Benefits of Creating a TrustTrusts have long been a favored estate planning tool of the wealthy because of the advantages they provide in protecting assets and preserving wealth through carefully considered distribution strategies. There are also several reasons why middle-class families would want to consider the use of a trust, including these:

You want to control asset distribution. A trust can help you distribute an inheritance over a certain period of time, which can be particularly useful if you have younger heirs you don’t want to inherit all at once.

You want to protect assets from creditors. You can protect an inheritance from your heir’s creditors – or the creditors of his or her spouse – by placing them in a trust.

You want to preserve an inheritance for a spendthrift heir. Many family fortunes have been lost to spendthrift heirs. Putting an inheritance in a trust helps prevent this.

You want to protect the inheritance of children from a previous marriage. If you are remarried, a trust will allow you to provide for your current spouse as well as preserve an inheritance for the children of your previous marriage.

You want to provide for a special needs person. If you have a loved one with special needs that you want to provide for, leaving them assets outright can do more harm than good since it could disqualify them from important government benefits. You can bypass this risk by placing the assets in a trust for their benefit instead.

You want to avoid probate. Probate can be both lengthy and costly; assets placed in a trust pass immediately to heirs without having to go through the probate process.

You want to maintain privacy. A will is a public document, but a trust is private.

At The Estate, Trust and Elder Law Firm, P.L. we help our Treasure Coast clients develop and implement comprehensive estate planning strategies personally tailored to their unique situation, needs, and goals.   Contact us for your free initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

How to Establish a Pet Trust

How to Establish a Pet TrustWhile there are a number of different kinds of trusts, they all fall into two categories: Irrevocable trusts and revocable trusts.

An Irrevocable Trust is a trust that cannot be changed in any way. Before deciding on an irrevocable trust, you should be certain that you can abide by the terms of the trust forever. You should also be aware than an irrevocable trust can never, under any circumstances, be terminated.

A Revocable Trust is a trust that can be changed, at the full discretion of the grantor. Any desired changes must, however, be made through the trustee. A revocable trust can also be terminated at any time by the grantor, for any reason. This provides more flexibility for those who foresee changes that may become necessary to their trusts.

And trusts aren’t just for people anymore. Establishing trust funds for pets is a growing trend – which should be no surprise, since research shows that most Americans consider their pets to be part of the family.

The ASPCA offers some tips on establishing a pet trust:

  • Choose a trustee and be sure you have discussed the responsibilities in detail with them before putting them in your trust documentation.
  • If your primary trustee becomes unavailable, name a successor trustee for your pet trust.
  • If the person you name to carry out the provisions of your pet trust will not be the primary caregiver, you should designate both a primary and a successor caregiver for your pets.
  • To help prevent fraud, provide microchip ID numbers and photos of each pet named in the trust.
  • Detail your wishes for the care of each pet covered in the trust, including their nutritional and healthcare needs, how often they should visit the vet, etc.
  • Make a realistic determination of how much money is needed to care for your pet. Be sure to include the trust administration costs as well.
  • Choose a beneficiary who will receive any leftover funds after the last pet mentioned in the trust has died.
  • Provide burial or cremation instructions for your pet(s).

Both irrevocable and revocable trusts have their own unique advantages, so your best bet is to consult with an estate planning attorney for guidance.

The Estate, Trust & Elder Law Firm, P.L., provides attorney services to a range of clients from young families to advanced and crisis long-term care for seniors. Contact us for your free initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.

Look for These Characteristics When Choosing a Trustee or Executor

Look for These Characteristics When Choosing a Trustee or ExecutorDo you need help in choosing the right trustee, executor and agent for your financial power of attorney? This can easily be the most important decision you make with your estate plan. If your successor trustee fails to follow your plan, your plan fails.

There are a few key characteristics that good successor trustees have:

First, they must be trustworthy. This sounds obvious, but if you have any doubts about someone’s character, do not name them as your successor trustee.

Second, a good successor trustee must have some basic financial knowledge. They need to know the difference between a bond and a mutual fund. They also need to have the ability to spot a scam and avoid being ripped off (with your money!).

Finally, the person you name as your successor trustee must be financially sound. Do not name a successor trustee, even a child, if they are living paycheck to paycheck. The temptation for someone like that may too great to “loan” themselves some of your money the next time they get in a bind.

Before asking a friend or loved one to serve as trustee, be sure to protect them as much as possible from the pitfalls that could go along with the job:

Limit liability. Whether you or your potential trustee know it or not, he or she can be opening themselves up to personal liability when they accept the position. A strongly-worded liability clause – written by a qualified Florida estate planning attorney – can help limit the person’s liability and make them more comfortable about saying “yes.”

Make provisions for professional help. Spell out terms in your trust that allows your trustee to hire expert help to sort out the details if they should need it.

Give them what they need to succeed. Make sure your estate planning documents – wills, trusts, powers of attorney, health care directives, etc. – are clear, legally binding, and that your executor or trustee has all the information and support he or she needs to get the job done.

With the proper guidance, you can protect your finances and spare your loved ones the frustration of having to make costly and difficult decisions.  Contact us for your free initial consultation at one of our conveniently located offices in Fort Pierce, Stuart, Port St. Lucie, Vero Beach, and Okeechobee.