On a regular basis we handle probate cases for families where the decedent tried to make their own will or tried to modify it themselves. Below is an example of a will that was created from a form or copied from someone else. While the will was validly signed as required in Florida and created a valid will, the person forgot to dispose of all of their property. It appears that of the provisions made, the person wanted to take care of their spouse first, then distribute $100 to one child and everything else to the other child.

Unfortunately the biggest asset in the estate, the decedent’s home was not devised in the will and thus would pass under the state’s intestate statutes. This will give the child that was to be disinherited 1/2 of the homestead.

Click to see a copy of theBad Florida Will

Thumbnail image for signhere.jpgThe following are a list of some critical issues to consider before you make the big decision to sign a power of attorney:

  1. Asset Protection – Nursing home costs in Florida can be outrageously expensive. Make sure that you really feel comfortable authorizing your agent to protect your assets from those costs. If you do, the agent may need to transfer ownership of certain assets to your spouse or children. Such authority must be clearly laid out in the power of attorney, and standard forms typically do not include this provision. Special powers need to be included to make these types of transactions.

  2. Health Care Issues – A health care power of attorney can allow your agent to make all kinds of health and personal care decisions for you whenever you are incapacitated. You can include instructions not only regarding end-of-life care, but also other situations that may arise. With a power of attorney your agent will be able to act for you even if you are not terminally ill or permanently unconscious. It is a good idea to give your agents some indication as to what your preferences are for daily activities. Without such instructions, you may not be doing what you want to do or participating in activities that you would prefer not to.

    Your agent should be someone who understands your values and who will be willing to advocate for your wishes in whatever situation may arise. Your agent can review the circumstances, consult with the health care providers, consider the prognosis, and then apply your wishes as set forth in the document when making decisions.

We see many problems with how homes are titled. Most are in attempt to avoid probate or make it easier on family members. Unfortunately, many of these cause real problems for family members in the future. Here is one example of something we see regularly.

Imagine this: You’re retired, your only significant asset is your home, you’re very close to your child or children, and you don’t want the cost of creating an estate plan. In such cases, what’s the harm of simply putting your home in the name of your child to avoid probate and then be done with it?

We’ve gotten this question more than once at our office, and we almost always advise against it. There are a number of reasons to keep your home in your own name, the biggest ones are, loss of control, loss of stepped up basis leading to increased income taxes the kids will pay, failure to use gift tax exclusions resulting in huge penalties to the IRS, increased property taxes and your child’s liabilities. These aren’t the only reasons to keep your home in your own name, however. Other reasons include:

Most parents want to love and treat all of their children the same, but when it comes to estate planning, not every child should be treated the same. In fact, insisting on treating all children exactly the same in an estate plan can often lead to disastrous consequences.

Each of your children is unique, and their circumstances may grow increasingly different, especially as they become adults and acquire jobs and extended in-law families. Each child should accordingly be treated as a unique individual.

Here are a few ways that wise parents might consider treating their children differently in an estate plan, but sill equally:

religion.jpgMany parents hope to pass their values onto their children and grandchildren. Often one of the most important values that they hope to pass on are values based on religion and spirituality. In some cases, religious values are so important to a parent that they will even include mention of these values in their estate planning documents. Our firm strongly believes that an estate plan is not just about money, but about leaving a legacy, and we often encourage our clients to include mention of their values–religious or otherwise.

Formalizing a legacy of values is not always as easy as leaving a financial legacy, however; and there is a limit to how far a parent or grandparent can go in dictating religious values to their heirs. Being too restrictive in an estate plan in an effort to pass on religious values–choosing to disinherit children who marry outside the faith, for example–can often create divisions within a family and spark extended, costly legal battles, all while failing to have any true impact on your heirs’ beliefs. In addition, many of these clauses have historically been poorly drafted and violate the public policy of the freedom to marry and are stricken by courts.

One of the most common value-imposing strategies used by parents in estate planning is to require that children marry within a certain faith in order to receive their inheritance. This strategy has worked in some instances, for example, in 2009 the Illinois Supreme Court overturned the decisions of lower courts and unanimously ruled that Max Feinberg, and his wife, Erla, could legally cut off their grandchildren who chose to marry outside of the Jewish religion.

News sources recently revealed that Facebook founder Mark Zuckerberg — as well as other Facebook top brass–use Grantor Retained Annuity Trusts ( GRAT or GRATS) to protect their assets and investments from excessive taxation. A Grantor Retained Annuity Trusts (more commonly called GRATs) is a perfectly legal–and very efficient–way to protect and pass significant assets from one person to another without incurring an exorbitantly high tax bill.

GRATs differ from certain other asset protection trusts in that they offer a good vehicle for wealthy investors who put money in start-ups, while other trusts may not. But it’s not only wealthy startup investors who may find GRATs useful. GRATs are an excellent way to shift wealth to others at little or no tax cost and with minimal legal and economic risk. As such, they can be the perfect tool for business owners, professional investors, and many others. Setting up a GRAT allows the investor/grantor to give assets over to the trust for a pre-determined number of years. During this time the assets appreciate and the grantor receives annual payments adding up to the asset’s original value plus a return based on a fixed interest rate determined by the Internal Revenue Service. At the end of the trust term the assets (at their new value) are transferred to the beneficiary named in the trust with none of the usual gift or estate tax on the appreciation.

This makes GRATs sound like the perfect (and perfectly simple) tool, but nothing is perfectly simple. The pre-determined lifetime of your GRAT will depend on your individual circumstances, as well as the tax laws at the time, so you’ll want to make sure you have the help of an experienced and knowledgeable attorney helping you design your trust. Contact our office for more information.

Here are three compelling reasons to make an estate plan. We all know people similar to those portrayed below. While estate taxes and probate are often compelling reasons to create estate plans, sometimes it is the family dynamics that drive the necessity of estate planning.

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Personal-Representative-Bond.pngIn Florida, a personal representative (PR)is a fiduciary who shall observe the standards of care applicable to trustees. A personal representative is under a duty to settle and distribute the estate of the decedent in accordance with the terms of the decedent’s will and the Florida Statutes, always considering the best interests of the estate.

A personal representative has responsibility to administer the estate of the deceased, and his or her tasks encompass taking possession of and managing both real and personal property.

The personal representative is also responsible for ascertaining and paying the legitimate claims of creditors against the estate. Although there may be provisions set out in a Will which appear to absolve a personal representative from any financial liability, this may not always be enforceable or hold true.

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