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.

These are issues that should be dealt with in Florida Estate Planning as well as to avoid abuse of the elderly. To discuss your concerns or issues contact a Florida Estate Planning Lawyer

Florida Special Needs Trust Lawyers & Florida Supplemental Needs Trust Attorneys.

Florida Families who have disabled children had a greater need for a Florida Estate Planning Lawyer to prepare for the possibility that they do not outlive their children. When people have disabilities or special needs, its important to parents to provide for their welfare while you are alive. There are also significant advantages to creating a Florida Special Needs Trust or a Testamentary Special Needs Trust.

When assets are left to an individual with special needs in a normal trust or outright, it could disqualify the individual from government benefits as well as require that any remaining assets be paid to the government for reimbursement of services provided during the individual's life.

By using a SNT or Florida Special Needs Trust one can usually choose a remainder beneficiary, that is who will receive any funds that are not used by the individual with the disability during their life.

In addition, without a Florida will with a valid guardian clause, the state will determine if your child ends up in foster care or who will be the guardian over your child.

Contact aFlorida Trust Lawyer to discuss how a Florida Trust Lawyer can help you and your family.

The following fifteen common assets and applicable beneficiary designations should be reviewed to make sure they will not be paid (or given) directly to the special needs child:

(1) IRA, 401(k) and other retirement benefits.
(2) Life insurance (including employer-provided life insurance) benefits.
(3) Accidental death and travel insurance benefits provided through credit cards when a person purchases a plane ticket, etc. using that credit card.
(4) Annuities.
(5) Savings Bonds.
(6) Any property not subject to the parents’ will or trust.
(7) UGMA or UTMA accounts.
(8) TOD, POD, ITF designations on accounts, savings bonds, or securities.
(9) Inheritances, gifts, or bequests through another person’s will or trust (if not paid to a third-party created and funded SNT).
(10) Deeds.
(11) Joint accounts.
(12) Jointly owned property, including jointly owned real estate.
(13) Final paycheck (including unused vacation and sick pay).
(14) Collectibles, antiques and family heirlooms.
(15) Personal injury and wrongful death proceeds payable to a parent’s estate (in contrast to personal injury and wrongful death proceeds payable, by law, directly to the special needs child).
(16) Homestead laws that give the surviving spouse a life estate and the minor children a vested remainder interest (as does Florida law in certain instances).

An alternative to a stand alone third-party created and funded SNT is to have the parents’ last will and testament or their revocable living trust contain third-party created and funded SNT provisions.

A third-party created and funded SNT can have a trust protector. At a minimum, the trust protector should can have the power to: (i) direct the trustee’s actions; (ii) receive financial-investment statements and accountings; (iii) terminate the trust (and have the assets be distributed to the remainder beneficiaries), (iv) remove and replace a trustee, and (v) direct or approve the reformation or amendment of the trust to reflect changes in the law and in order to comply with the trustmaker’s intent and purpose.

For tax reasons, a trust protector should not be “related or subordinate” to the settlor or the trust beneficiaries, within the meaning of IRC section 672(c).

The thirteen benefits of an inter-vivos stand alone third-party created and funded SNT are:

(1) The trust can be established by the parents (or by any third party, such as the grandparents) for the benefit of the special needs child.

(2) The trust provides for the investment and management of the special needs child’s inheritance by a third party - the trustee.

(3) The persons establishing the trust (such as the parents or grandparents) decide the terms and conditions of the special needs child’s inheritance and who is to receive the balance of the trust funds when the special needs child dies - rather than having to reimburse the government for Medicaid and/or “cost of care” benefits provided to the special needs child. One of the significant differences between a between a third-party created and funded SNT and a first party SNT is that there is no Medicaid payback requirement for a third-party created and funded SNT, and a third-party created and funded SNT should not contain a Medicaid payback provision.

(4) The trust does not have to be for the “sole benefit” of the special needs child; other children of the parents can be current beneficiaries (although it is generally recommended that the special needs child be the preferred beneficiary vis-a-vis the other current beneficiaries).

(5) The persons establishing the trust can name who should serve as the initial trustee and as the successor trustees, thereby avoiding the risk of the probate court appointing a “stranger” as a trustee.

(6) The trust avoids family conflict, since the trust spells out who gets what, when, how, and why.

(7) The trust avoids a probate court guardianship for the special needs child’s inheritance.

(8) The trust (if properly drafted and administered) maintains the special needs child’s eligibility for government benefits (assuming the child is otherwise qualified to receive government benefits).

(9) The trust coordinates government benefits and trust assets to meet the special needs child’s lifetime needs.

(10) The special needs child can be any age (i.e., the trust is not limited to a special needs child under age 65).

(11) The trust can provide for the appointment of an independent advocate for the special needs child, regardless of whether the child has a guardian, as well as a Trust Advisory Committee to advice the trustee concerning distributions for the benefit and well being of the special needs child.

(12) The trust protects the special needs child’s inheritance from being seized by his or her creditors, and avoids the imposition of a Medicaid lien.

(13) The trust can be “simple” or “sophisticated,” depending on the amount and type of assets that are used to fund the trust.

The principal purpose of a third-party created and funded SNT is to provide an inheritance for the special needs child without risking the loss of important government benefits such as SSI, Medicaid, etc. Consequently, it is important that grandparents and other relatives (including the siblings of the special needs child) not leave an inheritance outright to a special needs loved one.

Fortunately a parent’s stand alone inter-vivos third-party created and funded SNT can be structured to receive gifts, bequests, and inheritances from grandparents (and other relatives/friends) for the benefit of the special needs child. This avoids the grandparents (or other relatives/friends) having to prepare a separate third-party created and funded SNT.

There Are Many Ways A Special Needs Child Can Receive An Outright Inheritance and Lose Means-Tested Government Benefits. A special needs child can receive an outright inheritance in indirect ways. For example, if the grandparent’s will leaves his or her estate to “my descendants, by right of representation,” and the parent of the special needs child predeceases the grandparent, actually or presumptively under the requirement for survival (typically 120 hours (or 90 days for GST tax purposes)), a portion of the deceased parent’s share of the grandparent’s estate will pass outright to special needs child, and possibly disqualify the child from receiving certain government benefits.

Another way, that is not so obvious for a special needs child to receive an outright inheritance, is when an unmarried adult sibling dies without children and leaves his or her estate to his or her “heirs” and the decedent’s parents are also deceased. In such instance, the decedent’s special needs sibling (as an heir of the decedent) will receive an inheritance.

The trustee of a third-party created and funded SNT is given complete discretion in making distributions to or for the benefit of the special needs child. Thus, who should serve as the trustee of a third-party created and funded SNT is important.

The selection of the trustee involves many considerations, including the trustee’s ability to understand and respond to the needs of the special needs child; the trustee’s knowledge of government benefit programs and the effect that trust distributions will have on the special needs child’s government benefits; the trustee’s health, integrity, reliability and financial acumen; the trustee’s potential for a conflict of interest if the trustee is a current or remainder beneficiary of the trust; the potential for adverse income and transfer tax consequences if a family member serves as a trustee and is also a current or remainder beneficiary of the trust, etc.

Caution: Due to SSI and Medicaid rules and for various tax reasons, neither the special needs child nor his or her spouse should serve as trustee of either a third-party or first- party SNT.

There are five estate planning options available to parents concerning their special needs child:

(1) Distributing assets outright to the special needs child (not recommended since the assets may disqualify the child from receiving means-tested government benefits);

(2) Disinheriting the special needs child (generally not recommended since the child will have no “safety net” if government benefits are subsequently reduced or eliminated);

(3) Leaving property to another family member with the “understanding” that the property will be used for the benefit of the special needs child (generally not recommended since the arrangement is not legally enforceable and the sibling’s creditors (including a potential ex-spouse) may be able to seize the assets);

(4) Establishing a third-party discretionary support trust for the special needs child (generally not recommended since the trust will, in many states, disqualify the child from receiving means-tested government benefits); and

(5) Establishing a third-party created and funded SNT for the special needs child (highly recommended since the trust will not disqualify the child from receiving means-tested government benefits).

If an irrevocable inter-vivos third-party created and funded SNT is established by the parents or grandparents, the parents’ (or grandparents’) wills should specify the source for the payment of any death taxes attributable to the trust if any part of the third-party created and funded SNT is included in the parents’ (or grandparents’) gross estate. These trusts should not include a Medicaid Benefits payback clause. If its not drafted properly you can create a requirement to reimburse Medicaid.

Tax planning should not be ignored when preparing an estate plan that involves a special needs child.

There is a general (and incorrect) assumption among some estate planners that taxes are of little or no concern to families of special needs children.

Income taxes, estate taxes, gift taxes, and the confiscatory generation-skipping transfer (“GST”) tax should all be considered and dealt with when preparing an estate plan. Equally important are the income and transfer tax consequences of a special needs trust.

Five Essential Estate Planning Documents For A Special Needs Family. At the minimum, a special needs child deserves a parent’s continued stewardship and guidance, even though the parent may be incapacitated or deceased. Therefore, the parents of a special needs child should typically have the following five estate planning documents prepared:

(1) Last will and testament.

(2) General durable power of attorney for financial affairs (“GDPA”). The parent’s GDPA should permit the agent to make discretionary non-support distributions to or for the benefit of the special needs child, and to establish a SNT for the benefit of the special needs child.

(3) Durable medical power of attorney.

(4) Revocable living trust. During a parent’s period of incapacity, the parent’s revocable living trust should contain language that permits the trustee to make discretionary non-support distributions to or for the benefit of the special needs child. Upon the parent’s death, the special needs child’s inheritance should be distributed to a third-party created and funded SNT previously established by the parent.

(5) Third-party created and funded SNT.

In addition to the usual hurdles that parents face when preparing an estate plan (e.g., who should be the guardian, trustee, executor, etc.), the parents of a special needs child are faced with five unique estate planning challenges:

(1) How to provide for all of their loved ones without jeopardizing the special needs child’s current (or potential) eligibility for means-tested government benefits such as SSI and Medicaid;

(2) How to design an estate plan that supplements the special needs child’s means- tested government benefits and enhances the quality of the special needs child’s life;

(3) How to treat the other children equitably while adequately providing for the special needs child;

(4) How to make sure there are sufficient funds available at a parent’s death to care for the special needs child; and

(5) How to provide for the proper supervision, management, and distribution of an inheritance for the special needs child through a third-party created and funded SNT

Of these five unique estate planning challenges, above items 4 (sufficient funds) and 5 (proper supervision and management of the funds) typically prove to be the most difficult to implement. This is especially true: (i) if the majority of the parents’ estate is composed of retirement benefits (see, Section 9, below, concerning retirement benefits), (ii) if the proposed trustee is inexperienced in administering SNTs, or (iii) if there is an experienced trustee available that is knowledgeable about special needs (typically a corporate or professional trustee), its minimum annual fee is too high relative to the proposed size of the SNT.

When creating an Florida Estate Plan your lawyer should ask about special needs.

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?

If you or a family member fees that a Florida Estate Plan will benefit you please contact a Florida Estate Planning Lawyer.

Leanna Hamill with the Massachusetts Estate Planning and Elder Law Blog wrote an article on Estate Planning titled Should You Discuss Your Plans with Your Children?

In the article she discusses the fact that clients often wonder if they should share their estate plans with their children. In giving her expected advice of IT DEPENDS, Leanna explains some of the reasons why one should and should not disclose their plans. These deal with the way the property is split between the beneficiaries, who will be the PR, Executor, or Trustee, unfit children, issues of disinheritance, and special provisions for one child.

For more insight on these issues read her article or speak with your Florida Estate Planning Lawyer about your particular situation. While you may have not considered the ramifications and ways to approach your specific issues, an Experienced Florida Estate Planning Attorney has.

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.

“Pour Over” Wills and Revocable Trusts

•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.

Estate Tax Planning

•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.

Life Insurance, Deferred Compensation, IRA’s, Annuities

•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

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.

If are not funded they will provide none of the expected benefits upon the death of the grantor.
If you have a Florida Durable Power of Attorney and would it reviewed free of charge by a Jacksonville Florida Estate Planning Lawyer use the contact form on this page.

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 Florida Estate Planning Attorney, I often get involved in planning for Disabled Florida Adults and Children. Often these individuals are receiving government benefits or expect to receive the in the future due to a physical or mental illness or disability. In some cases clients expect their spouse to need these benefits soon. If the individual receives income that is to create or acquires or maintains assets above a certain level, they will be unable to qualify for these government benefits.

Often the solution is to create a Florida Special or Supplemental Needs Trust. This trust can hold assets and income that would typically disqualify an individual. This money can then be used to supplement their lifestyle. The Connecticut Estate Planning Blog has a two part article on this topic and the rules there seem to be very similar to those in Florida. If you have someone in your family who is currently disabled, or you expect to need government benefits in the future, you should discuss this with a Florida Estate Planning Lawyer so that you can determine what the best option for your particular situation is.

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.

If you are interested in preserving your assets, managing their use, avoiding Florida Probate you should talk with a Florida Estate Planning Attorney about setting up a Florida Living Trust or Florida Irrevocable Trust.

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.

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.

In Florida Estate Planning, Florida Guardianship Proceedings, and Florida Probate cases it is often necessary to setup a full or plenary guardianship.

Guardian: an adult appointed by a surviving parent in his or her will or by a court, who is responsible for a minor child or legally incapacitated person's personal care and nurturing.

A parent is the natural guardian of their minor child. If a child receives over $15,000 from a probate or settlement that requires court approval, a parent will need to create a Florida Guardianship over the Property of the minor child.

Other times Florida Guardianships are used to try to stop individuals from wasting their assets. Although this was permissible in the past in Florida, the new standard does not take into account the actions of the individual only the mental capacity of the individual and by law must impose the least restrictions on an individual when evaluating their mental and physical capacity.

Often, Florida Estate Planning Techniques such as Florida Revocable Living Trusts, Florida Durable Powers of Attorney, and Florida Designation of health Care Surrogates are used to prevent a guardianship from being imposed on an individual at a later date.

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.

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.