Estate Planning Overview
The phrase “estate planning” is an antiquated term that essentially means “caring for the future with your stuff.” Over time, this term has grown to encompass a broad range of planning techniques ranging from traditional wills and trusts to modern solutions such as advanced care directives, asset protection, living wills, and advantageous tax structures.
At Easler Law, we work with all individuals, families, and business owners locally in Brevard County and throughout the State of Florida to plan for their future and protect their assets through effective estate planning.
Our attorneys can help you:
Plan for the future, including your family,
Protect your assets from potential risks,
Gain peace of mind and ensure your assets are distributed according to your wishes,
Structure your business with succession planning in mind,
Work with well-qualified CPAs to ensure tax minimization, and
Estate planning can be complex. Our experienced attorneys take the time to listen to your goals and objectives and then help you develop a proper estate plan to help you achieve those goals and objectives.
Why Everyone Needs an Estate Plan
Estate Planning is not just for the super-wealthy. In fact, as a wealth preservation tool, lower and middle-class families benefit the most from estate planning through increased upward mobility for each generation. Essentially, the more you can pass on to the next generation, the better their chances of reaching their goals.
Planning an estate is not just for the elderly or unwell, either. The pandemic has revealed that even healthy individuals are vulnerable to life-altering situations. No matter your age, marital status, or the size of your estate, you can prevent unnecessary conflict and negative consequences after death or incapacity by working with an estate planning attorney.
The Primary Objectives of Estate Planning
Avoid probate: Probate can be a long, expensive, and public process. An estate plan can help you avoid it.
Protect your assets: without an estate plan, your assets may not go to the people you want them to. An estate plan lets you designate who will receive your property when you die.
Control your medical care: If you don't have an estate plan, the state will make decisions about your medical care if you cannot make them yourself. An estate plan gives you control over who makes those decisions for you.
Plan for the future: No one knows what the future holds, but with an estate plan, you can prepare for whatever might happen. You can choose who will take care of your children if something happens to you, put in place instructions for distributing your assets, and more
The Benefits of Creating an Estate Plan
Benefits of Estate Plans After Your Passing
Assets that stay in your name after your passing, such as certain bank accounts, investment accounts, or real estate, can’t be transferred without the probate court’s approval, even with a will.
The process of probating a will or “administering” an estate is lengthy, complex, and costly. Often, smaller estates are never probated because of the time and money required to navigate the courts. As a result, that person’s lifetime of accumulated wealth never gets distributed to loved ones, preferred charities, or someone they would have preferred to receive it.
Even when probated through the courts, without a valid will or estate plan, state “intestacy” law determines where your property goes. If you have no valid will and the state cannot locate surviving relatives, you risk forfeiting your assets to the state after your passing.
Benefits of Estate Plans During Your Lifetime
Imagine that you are involved in a severe car accident and are hospitalized and incapacitated.
While incapacitated, without a durable power of attorney, loved ones will be unable to make financial and property decisions on your behalf, such as accessing your bank account to pay your mortgage.
Without a HIPAA release and a healthcare surrogate, also known as a healthcare power of attorney, those you trust may not be able to access your medical records or make critical medical decisions on your behalf.
Without a living will or advanced care directive, loved ones may struggle to determine how to proceed in the event of incapacity and critical condition.
Benefits of Estate Plans Both During Your Lifetime and After Your Passing
An appropriately structured estate plan maximizes asset protection and minimizes tax.
An estate plan should identify vulnerabilities in your estate, consider the risk of liability and loss inherent in your career, lifestyle, and investments, and establish an appropriate individualized strategy to reinforce and protect your assets. This plan should also implement legal tools to protect your assets after your passing from potential attack (i.e., attachment) by your creditors or the creditors of your beneficiaries.
Likewise, an effective estate plan will also incorporate various tools to avoid excessive and unnecessary taxation, such as double taxation, during your lifetime. After your passing, an estate plan should consider the potential tax implications to your beneficiaries and optimize intended distributions as appropriate to minimize their possible tax consequences and the tax consequences to your estate.
Essential Estate Planning Documents Everyone Must Have
An Introduction to Wills and Living Wills
Wills are tools used to prove your intent for what should happen upon your death or incapacity. A traditional will, also known as a “Last Will” or “Last Will and Testament” addresses what you would like to have happen upon your death, whereas “living” wills deal with what you would like to happen should you become incapacitated and seriously ill.
An effective traditional will not only identify your intended beneficiaries (those who you want to receive something from your estate) but also who should take or what should happen in the event one or more of your beneficiaries predecease you.
A will should be instructive about your desires for funeral arrangements but also address who should receive and care for your minor children or pets and indicate what should happen to a gift if a beneficiary under the will is a minor or otherwise unable to take that gift.
Some wills, called “Pour-Over Wills” are designed to take property in your name at the time of your death and use that to establish a separate legal tool, called a trust, which will then manage and distribute those assets in accordance with your wishes.
Living Wills can identify which individuals have the authority to make critical end-of-life decisions and which actions those individuals should take in your place. For example, one point a living will addresses is whether to continue life-saving support if you are incapacitated and have an end-stage condition or nearing death.
Florida is a “strict compliance” state regarding testamentary instruments such as wills. This means that the courts have set strict requirements for how a will can be written and executed to be legally binding and admissible in probate courts. These requirements are known as “will formalities” and can make or break a probate case.
A will that was drafted perfectly but that wasn’t executed under Florida law will likely be useless and ineffective. You should always seek the advice of an estate planning attorney to avoid the possibility of a will being declared invalid for not meeting the will formalities under Florida law.
An Introduction to Trusts
Trusts are powerful tools capable of accomplishing a variety of beneficial tasks ranging from avoiding probate (the lengthy legal process of determining what happens to the parts of your estate that haven’t been otherwise disposed of), protecting assets, avoiding unnecessary taxation, caring for your loved ones and animals, and handling a variety of other planning scenarios.
A trust is a more advanced form of estate planning that involves transferring some or all of your assets into a separate legal structure managed or administered by one or more individuals called trustees. The person who gives the trust these assets is typically called the settlor.
There are several distinct types of trusts, but each generally requires that you have:
Capacity the person creating the trust must have the legal ability to give the assets to the trust;
Evidence of Intent is often expressed through the execution of the trust document;
A Trustee is a person responsible for managing or administering a trust;
A Beneficiary is a person, animal, organization, or charitable purpose intended to benefit from the trust’s operation;
Trust Res is tangible or intangible property that becomes the subject of the trust’s operation;
Trusts must have a lawful purpose.
There are a variety of types of trusts which are broken down into revocable and irrevocable trusts.
Revocable trusts are those created during the settlor’s lifetime (typically the person who initially starts or funds the trust). The distinguishing characteristic of these types of trusts is that these trusts can be unwound (revoked) during the lifetime of the settlor or settlors but then become irrevocable upon their passing. If revoked, the trust assets revert to the settlor or settlors.
Revocable trusts are the most commonly used type of trust in the United States and are ideal for estate planning purposes. They allow for the designation of a trusted individual to carry out its purposes, known as a trustee, and allow for a variety of contingencies that other estate planning tools cannot adequately address, such as what to do if the first or second line of beneficiaries predecease, or die before, the settlor.
The drawback, or benefit depending on the viewpoint, of the revocable trust, is that the settlor often retains control over the assets put into the trust. This control allows for easy modifications when circumstances change but also does very little to protect the trust assets from the settlor’ssettlor’ss. Other tools in combination with revocable trusts can be used to mitigate this risk, such as the use of trusts to hold constitutional homestead property in Florida, which is protected from attachment by most creditors.
Irrevocable trusts are designed to cut off most or all control over the trust’s assets bytrust’sttlor after their creation. Essentially, the settlor gives away the assets without the opportunity to get them back. Creating an irrevocable trust is not to be taken lightly and requires careful planning, an examination of the risks and possible benefits, and the overall goal of the estate plan.
The primary benefit of an irrevocable trust is the ability to protect principal trust assets from the settlor’s creditors.
settlor’sle, Dr. Williams is a successful surgeon and has made a sizeable nest egg during his lifetime. As a surgeon, he is in one of the riskiest professions when it comes to potential legal liability. He knows that he would like to ensure that his minor grandchildren are taken care of in the future and would like to take a portion of his estate and “earmark” them for the “grandch” ldren should he pass. If he puts those assets in a revocable trust and later loses a malpractice claim, those assets may still be accessible to the judgment creditor because he has retained control over them. However, if he puts those assets into an irrevocable trust for the benefit of his grandchildren and later loses the malpractice claim, the likelihood of creditor access is minimal.
Irrevocable trusts are uncommon and often ill-suited for the majority of estate plans. However, these are an ideal option for those in a risky profession or those with a higher than average likelihood of potential liability with a moderate to high net worth.
Powers of Attorney
A power of attorney involves the grant of a limited or general authority to step in your shoes and act on your behalf. Because they grant legal power to the person you designate, it is incredibly important to choose someone you trust, like a sibling, parent, or close friend.
Durable Power of Attorney
A durable power of attorney will not be rescinded in the event of your physical or mental incapacity, whereas a non-durable power of attorney will be rescinded when and if you become incapacitated. Executing a durable power of attorney helps you designate an individual you trust to handle your affairs and care for you and your dependents while you are otherwise incapable.
Powers you can confer range from access to your bank accounts and paying your bills to executing real estate transactions and even creating one or more trusts on your behalf.
In most cases, without a power of attorney, if you are incapacitated, no one will be able to handle your affairs until a court order granting that power is issued. To do this in Florida, they will need to first get the court to determine that you are incapacitated (unable to make important decisions on your own as a result of your mental or physical condition), and then they will need to be appointed guardian. The durable power of attorney helps avoid this costly scenario by making this designation in advance.
Healthcare Power of Attorney/Healthcare Surrogate
The healthcare power of attorney, also known as the healthcare surrogate, is a declaration you make in advance authorizing the individuals you designate to receive healthcare information and/or make healthcare decisions on your behalf. You can choose to have this take effect immediately or only come into play once a number of your physicians deem you incapable of making decisions on your own.
Not only is this helpful for planning for the unexpected, but the healthcare surrogate is especially helpful when planning a major surgery or long trip. Without this document, treatment facilities will need to establish next of kin, who may or may not be the individuals you desire to make those decisions for you, or those individuals may disagree as to what you would or would not want regarding your medical care. The healthcare surrogate establishes clearly and unequivocally who should be in charge of your healthcare.
Why Hire an Attorney to Create an Estate Plan
If you're considering creating an estate plan, you may wonder if you need to hire an attorney. Here are three essential reasons why anyone thinking about creating a plan should hire an attorney:
An attorney can help you understand the estate planning process and what options are available to you. There are many ways to structure an estate plan, and an attorney can help you determine which approach is best for your situation.
An attorney can help you navigate the legal complexities of estate planning. The laws governing wills, trusts, and other estate planning documents can be very confusing, and it's very easy to make mistakes that could have severe consequences. An experienced attorney will know how to avoid these pitfalls and ensure that your estate plan is airtight.
An attorney can provide valuable peace of mind. Creating an estate plan is a big decision, and it's natural to have some anxiety about it. Hiring an attorney can help put your mind at ease, knowing that you have a professional on your side who is looking out for your best interests.
How to Prepare for an a Estate Planning Consultation
The more you prepare for your consultation, the more you can get out of it, and the better your plan will be. We will need to know at least the following:
More about you
Not just your name, age, and place of residence, but what are your plans for the future? What is your relationship status? Do you have any health concerns? What do you care about? What is your family situation?
The people you care about
Who do you hope to care for in the future? If they don’t live with you, where do they live? What is their contact information?
The stuff in your name
Even if you plan to give “all” of your assets to one person, it is still helpful to have an inventory of what “all” really includes. We can use this to help estimate the value of your estate for tax planning purposes, determine how it can be transferred, and determine which strategies would be most appropriate. This includes not just your real estate, bank accounts, and vehicles, but intangible assets and future interests like remainder interests in life estates, structured settlement payments, and debt owed to you.
The people you trust
Take time to evaluate who you will trust to manage things for you if you pass away or become incapacitated. If you were in an accident tomorrow, who would you trust to pay your bills and make decisions on your behalf? What is their contact information?
Your philosophy and theology
No, not whether you prefer Socrates over Aristotle, we need to know more about your relationship with death and dying. If incapacitated and in an end-stage condition, would you want to be kept alive? After you pass, what kind of funeral or ceremony would you prefer, if any? Where should your remains be interred? If cremated, do you want to be kept in an urn, or would you like your ashes spread at a particular location?
In addition, preparing any questions you would like to ask your attorney in the consultation in advance will help ensure that you not only get a plan that works for you but that you understand the inner workings and functions of your estate plan.