Florida Estate Planning Lawyer Blog

The Trials and Heirs blog\ recently had an article about how to avoid exploitation of the elderly by a family member. They recommend

1 Getting Expert advise who knows the ins and outs of estate planning. I would also recommend using a Florida Estate Planning Lawyer who is familiar with Florida Elder Law.
2. Be careful of Joint accounts as they can take the money or create ineligibility for nursing home coverage.
3. Consider "Springing" Powers of Attorney or as we call them contingent Durable Powers of Attorney as they only give powers once you are incapacitated.
4. Choosing Wisely which may mean not choosing a family member or the oldest child because of emotional reasons.
5. Having Checks and Balances by using more than one person to make decisions and to avoid fights.
6. Selecting someone to monitor your accounts. This person can be a trusted advisor and should have the ability to question and stop inappropriate actions.

Florida Revocable Trust's as well as those created in other states often have language that provides for the health, education, maintenance, and support of our spouses and children. Recently I was reading an article written by a CA Estate Planning Lawyer and firearms instructor on providing firearms training as an option within the definition of education. David R. Duringer wrote an article entitled Does the Definition of Education in Your Revocable Trust Allow for Firearms Training? and while it is a short article and only deals with firearms education, it got me thinking about other types of education and training that may be important to your beneficiaries or family tradition that you may want to include in your traditional revocable trust. Obviously this is something that would make sense to provide for in a NFA Gun Trust or a firearms trust designed specifically for firearms. In David's article he goes on to state

Such training can provide your children with the comfort of skill at arms so they can protect themselves and their own children, and furthermore, passes on American values necessary to preserve political independence of families in our society. Other benefits of such training can include increased personal responsibility and lower juvenile delinquency rates.

You may even want to go further with an incentive trust provision actually requiring this training, possibly with achievement standards.

Attorney Kevin W Davidson of the Green Bay Wills, Trusts & Estate Planning Blog wrote an article on the pitfalls of Do it yourself asset protection where he talks about some of the problems with trying to protect your own assets.

Over the last 6 months the number of inquiries for asset protection have significantly increased. Unfortunately most of these people did not take action when they had significant assets without potential liabilities, but are only now beginning to consider it as the liabilities become a certainty. While there are things that can be done at this stage to protect, reduce the risk of loss, or increase the ability to negotiate one's debts, it is always best to address these issues prior to problems arising.

If you would like to discuss Florida Asset Protection you should Contact a Florida Asset Protection Lawyer.

Florida Asset Protection Attorneys can help structure the ownership of assets to protect from liabilities and creditors. Often individuals own a bulk of their assets individually or in a Florida Revocable Trust, or in a corporation. The assets and businesses held in these entities can be subject to the claims of creditors if a judgment is obtained against the individual. In touch economic times like these it is more important than ever to protect your assets from the claims of creditors. You should discuss your assets and potential liabilities with a Florida Asset Protection Lawyer who also knows about Florida Estate Planning to make sure they are protected to the extent possible from claims that could cause you to lose the assets or income you have worked hard to create.

Most residents of Jacksonville and Florida could benefit from a Florida Vehicle Trust if they have children who drive their vehicles or in the case that a judgment is in excess of their insurance limits.

A Florida Vehicle Trust protects your assets by holding title in a specifically designed trust. In Florida the owner and the driver of a Car, Motorcycle, or other vehicle is liable for any damage done by the driver of the vehicle.

Many parents are concerned about damage that their child, or a friend of their child's may do when loaned the vehicle. Using a Vehicle Trust can protect your assets from excess liability that is created when the damage done by the driver and/or vehicle is in excess of the insurance on the automobile.

To find out more about how a Florida Vehicle Trust can protect you, Contact us by email or phone a Florida Estate Planning Lawyer at (904) 685-1200.

One very useful Medicaid planning technique involves the creation of an irrevocable Medicaid Asset Protection Trust. With a Medicaid Asset Protection Trust a person or couple can transfer some of their property to the trust to hold and manage for their benefit during their live with the remainder paid to their family after their death.

Example: David and Beth have assets in their savings and stock accounts of $250,000. They currently live off income from their investments, social security, and other retirement benefits. They are concerned that if they need nursing home care they will not have enough money to support their lifestyle and pay for the medical expenses for the remainder of their life.

Solution: David and Beth decide to transfer $150,000 to a Medicaid Asset Protection Trust. The trust provides that all income is paid to them while alive and in the event one needs nursing home coverage under Medicaid the income is paid to the other. Upon the death of the surviving spouse, the trust will terminate and distribute the remainder to their children. By using this type of irrevocable trust their assets are protected and they receive an income stream for their lives.

Potential Problems: The gift to the Medicaid Asset Protection Trust can cause a period of ineligibility for Medicaid benefits. The length of the ineligibility period depends upon 1) the value of the assets given away and 2) The date the assets were given away. After the ineligibility period, the assets in the Medicaid Asset Protection Trust should be protected and not counted as a disqualifying asset for Medicaid planning purposes. In addition, this removes the assets from the reach of the spouses.

A Medicaid Asset Protection Trust is not for everyone, but it can be a means of protecting a family's financial security. These trusts can be complicated and must be tailored to the families resources and needs. It is important that you use a Florida Elder law attorney who is familiar with the Florida Medicaid laws and who has experience in creating this type of trust.

Please note: The Irrevocable Medicaid Asset Protection Trust is not the same as a "revocable trust", "revocable living trust" or "living trust" that is currently being sold through Trust Seminars.

Contact us by email or at (904) 685-1200 for more information.

a Florida Revocable Trust is a trust created during the life of an individual which can be modified, amended, or revoked at anytime during their life. Often they are used to:

1. avoid Florida Probate;
2. Keep your assets and decisions private;
3. Simplify after death distributions;
4. Increase the amount of the estate tax exemption for a couple;
5. Simplify the management of the beneficiary designations on property and other assets; and
6. Keep property separate in the case of a divorce.

A Florida Irrevocable Trust cannot be easily changed after the trust is created. It often takes consent of the creator, beneficiary, and trustee or judicial modification. A Florida Revocable Trust becomes irrevocable after the Settlor or Grantor dies. Florida Revocable Trusts are often used for:

1. Estate tax reduction;
2. Removing Life insurance proceeds from one's taxable estate;
3. Asset protection for the creator;
4. Asset protection for the beneficiaries;
5. Charitable Estate Planning; and

To determine what type of Florida Trusts would be best for you, you could Contact a Florida Trust Attorney or a Florida Estate Planning Lawyer

Greedy Trustees can be a problem in Florida Probate Litigation and Florida Trust Litigation. Often the Trustee must be removed to resolve the issues. Adrian Thomas a Florida lawyer who specializes in Florida Trust and Probate Litigation sent me an article where he discusses individual and corporate trustees. Often banks and financial institutions make their money by managing Florida Revocable Trusts and Florida Irrevocable Trusts. In recent interviews by news organizations, some employees talked about abuse of powers and improper investments that placed profits ahead of the best interest of the beneficiaries of the Florida Trusts.

Some of the abuses included:

Charging inflated fees;
Making distributions difficult for the beneficiaries;
Not considering compelling circumstances for distributions of allocation of principal and income; and
Naming themselves beneficiaries or trustees in the wills of elderly Florida Citizens.

The new Florida Trust Code includes remedies which allow the court to inquire into the appropriateness of a trustee and evaluate a change in circumstances for a judicial modification of the trust. In addition, Section 736.0706(2)(d) allows a trustee to be removed when there is a change in circumstances and the removal would best serve the interest of the beneficiaries.

Many of these problems can be addressed in the drafting of the Florida Living Trust by creating language and terms that beneficiaries can remove or modify the terms when it is in the best interest of the beneficiaries. In addition, judicial modification is a process where the court can modify a trust for similar circumstances. In Aelillo v. Hyland one beneficiary was favored over another beneficiary. The Florida Court removed the trustee because of conflict of interest.

If you feel that your are not being treated fairly by the trustee of a Florida Trust which you are the beneficary of Contact a Florida Estate Planning Lawyer who deals in Florida Probate Litigation or Florida Trust Litigation

Spendthrift clauses can be confusing to trustees. The general idea with a Florida Spendthrift clause is that the beneficiaries cannot assign their interest in the trust to a creditor ( voluntarily or involuntarily)

Here is the test found in a typical clause under the new Florida Trust Code

Spendthrift Provisions. Each trust created by this Trust Agreement shall be a spendthrift trust to the fullest extent allowed by law. Prior to the actual receipt of trust property by any beneficiary, no property (income or principal) distributable under any trust created by this Trust Agreement shall, voluntarily or involuntarily, be subject to anticipation or assignment by any beneficiary, or to attachment by or to the interference or control of any creditor or assignee of any beneficiary, or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of any beneficiary, and any attempted transfer or encumbrance of any interest in such property by any beneficiary hereunder prior to distribution shall be void.

The most common application of a Spendthrift Provision is to protect against involuntary assignment or bankruptcy.

While this may be fine with a small estate, this question often comes up with larger estates.
Why would I want to void my child's right to his 5 Million dollar distribution to avoid paying his creditors $25,000. Would it not be better in such a case to pay of the creditor and let my child enjoy and use the benefits of the trust rather than treat his a being predeceased?

Although it is not clear, the trustee can take this into consideration and make the distribution even though the creditor will receive a small portion of the decedents estate.

In these types of cases, I prefer to include language that a trustee can, in their discretion, make a payment when they know that a portion will go to a creditor of the beneficiary. Some times there is a limit placed on the amount and other times there is no limit placed on the maximum amount that can be used to pay a beneficiaries debts.

The Louisiana Estate Planning Law Blog has an article Whether you should include a "Spendthrift Trust" in your will? where they discuss using a spendthrift trust to prevent your children from loosing the money you leave to them.

If you want to make sure your children do not spend or loose all the money or assets you leave to them. It is also common to include a spendthrift provision in a NFA Gun or Firearms Trust to protect the items from being lost to a creditor. To find out more about how a Spendthrift Clause can help you Contact a Florida Estate Planning Lawyer
about including a Spendthrift Provision in your Florida Estate Planning Documents

A Florida Life Insurance Trust is an irrevocable trust that allows an individual to make the proceeds of a life insurance poliicy free from income taxes and estate taxes. Typical life insurance policies are income tax free, but many increase the value of one's estate to the point that the federal and or state income taxes are due. By using an ilit one can avoid these taxation issues.

In 2008 the Federal tax exemption is $2,000,000. Lets take a client with 1.5M in assets and a 1M life insurance policy.

If they were to die in 2008 their estate would be valued at 2.5M and 500,000 would be subject to estate taxes. The current estate tax rate is 45% so this estate would have to pay a tax of $225,000.

In 2011 the estate tax exemption is only $1M. With an estate valuation of $2.5M, 1.5M would be subject to estate taxes. Using the same tax rate, this estate would have to pay $675,000.

To find out if or how a Florida Life insurance trust can help you please Contact a Florida Estate Planning Lawyer.

When creating a revocable trust you may be asked for a Employment ID number (EIN) or Tax ID to open the account or fill out the paperwork. Many banks do not understand the difference between a revocable and a irrevocable trust. Although irrevocable trusts require TAX ID or EIN's revocable trusts do not require them.

When this happens to you, it may be difficult to get them to understand why they do not need this information. It is best to just fill out that section with your social security number - which is your Tax ID number.

If you have questions on a Florida Revocable Trust you should Contact a Florida Estate Planning Lawyer.

Often the first thing that comes to mind with Florida Estate Planning is a Florida will or Florida living trust. Although these are valuable documents they do not have any effect on the distribution of many assets.

We recommend that our Jacksonville residents make sure their beneficiary designations are updated as these control the distribution of many assets. When a Florida Living Trust is part of an estate plan, you can designate your trust to be the beneficiary of most assets. It is important to make sure that the trust is the proper beneficiary. With some assets like retirement plans, you may not want your trust to be the beneficiary as it can have adverse consequences when charities are named as beneficiaries of the trust.

Your beneficiaries need to be updated on a regular basis and in the event of a life event (birth, death, marriage, divorce...). We recommend naming contingent beneficiaries in these documents.

You should review your Florida Estate Planning Documents with a Florida Estate Planning Lawyer to make sure your intentions are fulfilled.

There have been many revisions to Florida's Trust Code and I have touched on some of them on this blog in the past.

There have been major changes to creditors rights. Creditors cannot compel distributions from or attach or otherwise reach a beneficiary's interest in a third party discretionary trust whether or not:

1) The trust has a spendthrift provision;
2) The discretion is subject to a standard; or
3) The trustee has abused the discretion.

If you have questions about creditors rights and the New Florida Trust Code please contact a Florida Estate Planning Lawyer to discuss your concerns with.

Stephanie Loomis-Price has recently published her articles entitled Family Limited Partnerships.

In her article, Stephanie offers a detailed outline of the Family Limited Partnership – from consideration of the FLP as an appropriate estate planning tool, through the formation of the partnership, concluding with the administration of the partnership and tax compliance issues.

Family Limited Partnerships are used in Florida Estate Planning when the assets are in excess of the death tax exemption. If you have a large net worth and require structure to help reduce the 45% estate tax rate, you should contact a Florida Estate Planning Lawyer to discuss a Family Limited Partnership.

Mitchell Port a California lawyer posted a link to an article on the California Tax Attorney Blog about an article on the State Bar Website which provides information on estate planning. Although this is a California bar website, many of the same issues and considerations are important to Florida residents interested in Florida Estate Planning. Much of the information is also found on The Florida Estate Planning Lawyer Blog which primarily deals with Florida issues.

1. What Is Estate Planning?
2. What Is Involved in Estate Planning?
3. Who Needs Estate Planning ?
4. What Is Included in my Estate?
5. What Is a Will?
6. What Is a Revocable Living Trust?
7. What Is Probate?
8. To Whom Should I Leave My Assets?
9. Whom Should I Name as My Executor or Trustee?
10. How Should I Provide for My Minor Children?
11. When Does Estate Planning Involve Tax Planning?
12. How Does the Way in Which I Hold Title Make a Difference?
13. What Are Other Methods of Leaving Property?
14. What If I Become Unable to Care for Myself ?
15. Who Should Help Me With My Estate Planning Documents?
16. How Do I Find a Qualified Lawyer?
17. Should I Beware of Someone Who Is a "Promoter" of Financial and Estate Planning Services?
18. What Are the Costs Involved In Estate Planning?

Wills

•A new Florida will is almost always advisable for the divorced client, especially if there are minor children.

•Florida Statute section 732.507 generally provides that after the dissolution the provisions for the former spouse in the will are treated as if the former spouse died at the time of the dissolution of the marriage.

• A subsequent marriage, birth, adoption, or divorce will not revoke a Florida Will.

•A Major Concern of Most Clients

-Former spouse will be appointed guardian of the property of the deceased client because they are the natural guardian of minor children and have the highest priority for appointment as guardian. The priority can be altered by naming another individual as guardian under a Florida will.

-Consider avoiding a guardianship of the property by having assets for minors held in a Florida trust. Someone other than the former spouse can then be named as trustee.

•If the client has established a revocable inter vivos (living) trust and executed a Florida pour over will (a will that distributes the residue to a trust) prior to the dissolution, the former spouse could potentially inherit the entire estate if the former spouse is the beneficiary of the trust. Florida Statute section 732.507 does not have any effect on inter vivos trusts.

•A new or restated Florida trust should be executed to remove provisions for the former spouse for the reasons stated above.

•If the client has a taxable estate, the fact that they no longer have a spouse could drastically change their estate tax planning due to loss of the marital deduction.

•Beneficiary designations should be reviewed to assure that the former spouse is no longer a beneficiary.

•IRA designations need to be reviewed to make sure the effect of the chosen beneficiaries does not adversely affect one of the beneficiaries because of age, or ineligibility

One common mistake that people make when they have a spouse or children is to transfer their retirement accounts into their Florida Living Trust.

Generally, retirement accounts are not subject to probate because you can name beneficiaries. If you name individual beneficiaries, each beneficiary is given the most flexibility in the way they take and report the proceeds from the IRA.

If you name a Florida Living Trust, the beneficiaries might have to take all of the distributions in the year after death. This can happen when one of the beneficiaries is a charity or not an individual.

The other main problem is when there is a great difference in age between the oldest and youngest beneficiary. Often this happens when the spouse is one of the beneficiaries and there are children or grandchildren that are also named beneficiaries. When this happens it is possible to make all of the distributions the same as with the oldest beneficiary.

These problems can be solved or avoided if the retirement accounts are properly setup, separated, or if the problem beneficiaries are dealt with timely.

Generally its best to either name beneficiaries with retirement accounts individually, separate the retirement accounts while you are still alive, or name a separate revocable trust for these benefits that is different that the main revocable trust.

For more information on how to deal with retirement accounts in probate you should talk with a Florida Probate Lawyer who is familiar with Retirement benefits. It is even better to plan things upfront by using a Florida Estate Planning Lawyer.

If you or a member of your family was to have a crisis are you prepared? That is the question you should ask your Florida Estate Planning Lawyer or Attorney on a regular basis. Often we only look at significant events in our lives and do not consider the effects that a significant effect in our parents or children's lives will have upon us.

When you review your Florida Estate Plan you should also review or remind your parents and adult children to review their plans also. There are changes in the laws which may prompt updates to your estate planning techniques. In addition, significant changes in your life including births, deaths, marriages, divorces, and changes in assets should trigger an estate plan review.

Generally when an Florida Estate Planning Attorney creates Florida Estate Planning Documents their duty is over once the documents are prepared. The obligation is up to you to seek a regular review of these documents.

In addition to reviewing the documents you should consider the following:

1) Make sure you know where your parents documents are, and you tell your personal representative and beneficiaries know where the documents are. If you are concerned that the documents may disappear, you may keep them with an attorney. If you keep your documents with a Jacksonville Florida Estate Planning Lawyerr or Jacksonville Florida Probate Lawyer you should tell people who has them.

2)Check to see that the Florida Estate Planning documents are complete and reflect their current family and financial situation.

3)Make sure that the documents reflect your or your parents current mind set. Wills and trusts need to be reviewed for changes in their financial condition as well as the beneficiaries family and financial condition.

4) Make sure all Estate Planning Documents are signed and witnessed as necessary under the current statutes or those in place at the time of execution.

5)Make sure any Florida Durable Power of Attorney documents mention the current Florida Statutes, many durable power of attorney documents are not honored when they do not comply with the Florida Statutes.

6) Make sure your Florida Living Trust or Florida Revocable Trust or any Florida Trusts are funded. That means that the bank accounts, CD accounts, land, and other assets have been transferred to the trusts. Any deeds to this effect should be properly recorded.

You have just been asked to be a successor trustee for a Florida Living Trust. What will your trustee duties and responsibilities be? Do you want to accept? Are their downsides? I ran across an interesting article and have applied some of it to Florida law. This note will help you to understand what some of the common issues are and will help you to discuss your options with a Florida Estate Planning Lawyer. Remember that all Florida trusts are different, and that many of your duties, responsibilities may not be contained in the document. Therefore your document will need to be analyzed with the New Florida Trust code.

First Lets discuss some of the background information that will be necessary to understand your duties and responsibilities.

A Trust is a legal entity. When assets are contributed to the trust, the trust separates the legal ownership (possession) from the beneficial ownership (the principal and income). Often trusts look very much like wills because they include instructions for whom your your assets will benefit after our death. Some trusts are created during the life of the person who creates them ( the settlor or grantor) and some are created after their death (testamentary).

Florida Living Trusts work by separating the equitable ownership (the trustee)from the beneficial ownership (the beneficiary).

Who are the people involved in a Trust? The grantor (also called settlor, trustor, creator or trustmaker) is the person whose trust it is. Married couples who set up one trust together are co-grantors of their trust. Only the grantor(s) can make changes to his or her trust.

The trustee manages the assets that are in the trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference.

A successor trustee is named to step in and manage the trust when the trustee is no longer able to continue (usually due to incapacity or death). Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee (bank or trust company) is named. Sometimes it is a combination of the two.

The beneficiaries are the persons or organizations who will receive the trust assets after the grantor dies.

Continue reading "Successor Trustee: Duties and Responsibilities" »

Often Estate Planning clients struggle with their spouse or self over who to pick as an agent to represent them in a Florida Durable Powers of Attorney ( Financial decisions), Florida Living will & Designation of Health Care Surrogate ( Health care decisions) and Revocable Trusts (Financial Management).

Initially clients might thing of using a Co-Agent. This can cause many problems and unforeseen circumstances and must be done with the correct expectations and knowledge of the potential problems. Michael Keenan has an article discussing several of these issues, titled Be Careful With Co-Agents. In summary, before choosing co-agents you should consider whether they get along well with each other, and what to do if they do not in the future.

In addition, what if one lives far away or moves after the documents are created. Some hospitals or financial institutions may require that both act together unless each co-agent has "several powers" or "joint and several powers" This can be difficult and impracticable. You put your financial and health interest at risk due to delay in execution of the documents.

Both Michael Keenan and David Goldman, a Jacksonville Estate Planning Lawyer & Attorney, recommend that unless there are extraordinary situations taking place, the use of co-agents should allow for flexibility and/or the ability for each to act independently.

As a Jacksonville Living Trust Lawyer, I have noticed many changes that effect the administration of Trusts, even those which were already in existence when on July 1, 2007 when the Florida's New Trust Code became effective. If you are an estate planning attorney in another state and have clients who have trusts in Florida, it is most likely that their trusts must be managed differently than their trust document would imply.

1) A trustee has a duty to act in good faith in the interest of the beneficiaries and in accordance with the terms of the trust, imposed in part by sections 736.0801 and 736.0802.

2) There is a new 6 month statute of limitation sunder section 736.1008 with regard to any item set forth in a trust disclosure statement which contains a limitation notice containing the six-month period of time under 736.0604 within which to contest the validity of the terms of the trust.

3) The court has the power to take action and exercise jurisdiction as necessary " in the interest of justice."

4) The court has the power to modify or terminate a trust under sections 736.0410-04115, 0413, 0415, and 0416. Judicial modification in the best interest of the beneficiaries under section 736.0415(3) is not mandatory as to (i) any trust created prior to January 1, 2001 and (ii) any trust created after December 31m 2000 if it is subject to the Traditional RAP (90 years vs the expanded 365 Year RAP that Florida permits) or the trust expressly prohibits such judicial modification.

5) Nonjudicial modification with unanimous agreement of the trustee and all qualified beneficiaries under 736.0412 is not mandatory as to (i) any trust created prior to January 1, 2001, (ii) any charitable trust until the termination of all charitable interests, and (iii) any trust created after December 31, 2000 if it is subject to the Traditional RAP unless the trust expressly authorizes such nonjudicial modification.

6) New Spendthrift protections which affect the rights of creditors and assignees to reach a trust under part V of the Trust Code.

7) Trustee's duty under section 736.0503 to pay expenses and obligations of a settlor of a revocable trust upon death.

8) Trustee's duty under section 736.05055 to file a notice of trust with regard to a revocable trust upon the death of a settlor.

9) Trustee's duties under section 736.0813 to provide to qualified beneficiaries (or their designated representatives under 736.0306) (i) notification of the existence of an irrevocable trust, the identity of the trustee and their rights to trust accountings, (ii) a copy of the trust agreement and to account, and (iii) respond to requests for relevant information about the assets, liabilities, and particulars relating to the trust administration

10) Rights of third parties other than the trustee or beneficiary under sections 736.1013-736.1017

Florida Estate Planning Lawyers often tell clients of the many advantages of a Florida trusts. When a client leaves property to heirs in a trust instead of outright, they can control how the property is used. The control can violate public policy or law, but often good estate planning can control the property without risk of having the control stricken. Some of the major advantages are:

1. That a trust can provide a mechanism for better management and investment than the individuals may be capable of on their own.
2. That a trust can prevents the beneficiary(s) from using all of the proceeds quickly, or wasting it on unnecessary items.
3. Than a trust can protect the assets from the claims of creditors.
4. That a trust creates separate property that can be free of claims of a spouse upon divorce or the beneficiary's death.
5. That a trust allows the creator to control the disposition of the property instead of the beneficiary.

When you create a Florida Revocable Trust, your Florida Estate Planning Attorney should advise you on how to title accounts.

One common question is about checking accounts. In most cases, the title (ownership) of the checking account should be changed to the name of the Florida Living Trust or Florida Revocable Living Trust, or Trustee of the trust. If on the date of death, the amount in a personal account has not become property of the trust, it may be necessary to open a Florida probate.

NOTE: The checks do not need to show the trust name and reference to the trust may be omitted for check cashing. The signature cards need to be updated to reflect the way in which checks will be signed. When doing this its best not to close the accounts as outstanding checks could bounce and create unnecessary expenses.

For more information on creating a Florida Revocable Trust or maintaining your Florida Living Trust, you should contact a Florida Trust Lawyer.

Most Jacksonville estate planning attorneys or those in other locations, focus on your heirs (children and grandchildren). As your parents are aging it is also important to consider and evaluate your parent's estate planning. One you understand the value in creating your own estate plan, you need to understand what effects your parents estate planning will have on you. You may find that your parents should leave the maximum exempt amount to their grandchildren (GST Trust)instead of to you. This can help avoid an extra layer of Death taxes. Its also important to classify their assets and allow the Personal representative or trustee the flexibility and duty to find which assets have the most appreciation (lowest cost value) and allocate those as to be most beneficial to the estate. If you can discuss your parent's estate planning with them, you may want to. You should speak with an estate planning attorney who can help structure a multi generational estate plan to help you and your parents establish a plan that will pass their values and protect inheritance.

In Florida a Successor Trustee is the person or institution named in the Revocable Trust agreement or other trust agreement who will assume control of the trust if the original trustee dies, resigns, or becomes unable or unwilling to act. There can be several layers of back-up trustees that take over in the order you designate. This person is like a backup agent for a power of attorney or Living Will

Florida Spendthrift Trust: A trust established to provide a fund for an individual that includes a provision intended to secure it against that person's lack of caution and protect it against the claims of creditors. A person can typically prevent against their own creditors but they can achieve some asset protection for others they choose to provide for such as children who have a trust but a trustee with discretionary powers whether or not to distribute property.

In Florida wills, Florida Trusts, and Florida Estate Planning it is important to deal with Pretermitted children. Make sure your Florida Estate Planning Attorney and the estate planning documents deal with them or you can have unexpected results.

A Pretermitted Child A child by birth or adoption who became a child after the execution of the current estate planning and was not mentioned in the will or trust. If a person has a child or children after executing their will and do not prepare a codicil after or name the child in the document the child will be entitled to receive the share they would be allowed if the estate were to pass by Florida intestacy laws.

Legally Incapacitated Person: A person who has been determined by a court as not capable of handling his or her personal and financial affairs.

A Florida Durable Power of Attorney, Florida Trust, Florida Guardianship, Florida Designation of Health Care Surrogate all deal with Legally Incapacitated persons.

One may not be the Personal Representative, Agent, or Trustee if they are Legally Incapacitated.

Fiduciary: This refers to a person (or entity) that serves in a representative capacity. Personal representatives, trustees, guardians, conservators, and agents under powers of attorney are all fiduciaries. A fiduciary stands in a position of confidence and trust with respect to each heir, devisee, and/or beneficiary. They are subject to a responsibility to act in the best interests of the person that they are serving on behalf of and can be sued if they act improperly.

Summary

A Florida revocable trust can be a helpful estate planning tool. It retains flexibility while the grantor is alive and has capacity and allows for them to name a trustee who will handle their affairs if they were to loose capacity or when they die and helps avoid probate in Florida. The technique is not for everyone though and you should discuss the various Florida estate planning options of a will to pass on your property, a revocable trust and in large estates that would be subject to estate taxes possibly additional irrevocable trusts and other estate planning techniques would also be appropriate. With full knowledge of your specific facts and what you would like to do with your property after meeting with a trust attorney they can help and offer advice regarding your situation and which documents would be most appropriate for you.

Testamentary Trusts

A testamentary trust in Florida is formed through a provision in a will and does not come into existence until a person dies.
It does not help if someone becomes incapacitated although hopefully that person will have a power of attorney to handle their financial affairs otherwise a guardianship would likely be required. A testamentary trust does not avoid Florida probate. It would need to go through probate and after all costs and delay of probate had been wrapped up and all valid creditor claims had been paid then the trust could be funded and operate.

5. How do you name a trust?

Revocable Trusts

A revocable trust usually includes the following information:

(1) The specific name of the trust,
(2) The date that the trust was executed/created,
(3) The name of the trustee,
(4) The title of the word trustee

An example is: the John Q. Public Revocable Trust dated April 15, 2006, John Q. Public Trustee.

At least one or more successor trustees should always be included in a revocable trust.

Irrevocable Trusts

Names of irrevocable trusts are similar to the revocable trusts. A primary difference of the names is the name of the trust itself, which typically indicates its purpose and would typically have a different trustee then the grantor. or example, Tom S. Smith could create an irrevocable life insurance trust (ILIT) that would be named as follows: Tom S. Smith , as Trustee of the Tom S. Smith 2006 Irrevocable Life Insurance Trust dated March 15, 2004.

The year is especially important in naming irrevocable trusts because one can create several trusts of the same type. For example, Beth Jones could create two charitable remainder unitrusts (CRUTs) to accomplish charitable tax planning objectives in successive years: (1) the Beth smith 2007 Charitable Remainder Unitrust, ABC Bank, Trustee; and (2) the Beth smith 2005 Charitable Remainder Unitrust, ABC Bank, Trustee.

The more significant distinction between the revocable trust and irrevocable trust are the tax consequences and flexibility. A revocable trust as its name states can generally be altered or amended at any time during the life of the grantor while they retain the capacity to do so. An irrevocable trust cannot although in some circumstances there are ways to essentially revoke the trust such as having the trustee stop paying the premiums on an irrevocable life insurance policy.

An irrevocable trust needs to get an independent tax identification number. For income tax purposes the trust is at the highest income tax rates after reaching a much lower amount of income then if it were earned by individuals. An Irrevocable Trust could help with estate tax planning though by getting property out of a decedents estate. The appreciation of the assets subsequent to the creation of the trust would also be sheltered from the estate tax. The Estate tax starts at 41% and rises to nearly 50% well above the top income tax rate. The current estate tax exemption amount a taxpayer has is $1.5 million in 2005. Under current law this will rise to $2 million next year through 2008 then rise to $3.5 million in 2009 and be repealed in 2010 only to return to $1m in 2011 when the prior law sunsets. However, President Bush is pushing to make a permanent repeal to estate taxes and do so more quickly then 2010. Although there is some support in Congress for this he would need to reach 60 votes and with mounting deficits and other priorities of the war and social security reform it is unclear what will happen with this. Some attorneys and tax commentators think it is likely that the estate tax exemption will be increased but not repealed prior to 2010 although until it happens one can only plan based on the current law and with the knowledge that there may be subsequent estate tax reform on the horizon of the next few years.

A general power of attorney will not be effective when the principal, the one who wrote and signed it, becomes incompetent, but a Florida durable power of attorney will still be valid after a person becomes incompetent or incapacitated.

One of the primary tax purposes of a durable power of attorney is to provide a mechanism for reducing a person's estate by making gifts of his or her assets. A similar objective in a smaller, nontaxable estate may be to make the principal eligible for Medicaid planning or assistance. In either case, it is prudent, and good practice demands, that the attorney at law who drafts the power of attorney includes the power to make gifts.

If the gift-making power is not included, the validity of the gift may be challenged. The IRS has successfully challenged gifts that were made when there was no specific authority in the document.

A power of attorney is not the same as a trust, a will or a living will. But it is a separate legal document that is an important part of a Florida estate plan.

Please make sure when creating Powers of Attorney, trusts, or wills they are setup correctly. Often fill in the blank forms can provide a framework, but they are not able to take into condideration the particulars need of individuals. Its best to have an attorney prepare these documents and have them reviewed yearly by your Florida Estate Planning Attorney for changes in your status, and the law.

For an understanding of Estate Planning you might read an article for some background. Mark A. Cline has written an article about the value of trusts for Megayacht news online where he talks about Trusts not only being for wealthy individuals. I am not sure any people who are not wealthy will be reading Megayacht news, but thought that others might find the article interesting.

He does a good job of explaining the various terms of trusts like the grantor, beneficiary, and trustee. In addition, he makes the point that " these documents (trusts) protect your assets and carry out your wishes in the event that you cannot." Here is the link to the article

For those who like this article you may also want to read his article on Estate Planning (wills, trusts, or both)

A firm in Dallas has created a program to help widows deal with financial planning. They state that the average age of a widow in America is 56 and that offen estate planning was not created to provide for widows as they need. They do a preliminary evaluation and work on restructuring estates to provide the necessary cash flow to last for the remainder of the spouses' lives. See the above link for more details. They may be able to help or refer you to someone in your area who can provide similar services.

Florida law specifically authorizes Spendthrift provisions in a revocable living trust or irrevocable trust. A spendthrift clause in a trust prohibits transfers of a beneficiary's interest in the trust. In some jurisdictions, all income interests are automatically given limited spendthrift protection meaning that they cannot be transferred by a beneficiary or reached by his creditors unless a provision is inserted in the trust document allowing such transfers. If there is no provision allowing the beneficiary to transfer his interest, it can be reached: by a creditor that furnished necessities such as food, clothing, shelter, or medicine; in suits to enforce child support or alimony; to collect a federal tax lien; to the extent of income beyond that reasonably needed by the beneficiary for support and education; and by creditors who have a judgment against the beneficiary and can levy upon 10 percent of the income due. There is no spendthrift protection where the trustor is also the beneficiary.