Estate Planning (Life Planning)
The elder law attorneys at Slonim & Lemieux care about not just what happens after you pass away, typically called Estate Planning, but also life planning. This area of practice encompasses traditional estate planning, such as the preparation of Trusts and Last Wills and Testaments. We also aid in the preparation of powers of attorney, health care surrogates, living wills, and pre-need guardianship declarations. The firm also provides assistance with the creation of guardianships, and matters of incapacity. Probate and estate administration services are also provided. We are proud of our firm’s reputation for thoroughness, quality, and service. We will help you and your family through the maze of legal and family issues.
Frequently Asked Questions
What is the difference between a living will and a last will?
A Living Will should not be confused with a person’s Last Will, which disposes of personal property on or after his or her death, and appoints a personal representative or revokes or revises another will.
Every competent adult has the right to make a written declaration commonly known as a “Living Will.” The purpose of this document is to direct the provision, the withholding or withdrawal of life prolonging procedures in the event one should have a terminal condition. The suggested form of this instrument has been provided by the Legislature within Florida Statutes Section 765.303. In Florida, the definition of “life prolonging procedures” has been expanded by the Legislature to include the provision of food and water to terminally ill patients.
There are certain assets you have, such as IRAs, 401Ks, annuities, Life Insurance Policies, and some retirement plans that are not governed in wills and trusts. Make sure you speak with your attorney regarding a Beneficiary Designation Form for any of these that you may have to ensure they are distributed upon your death.
Only if they are listed as an account holder for a particular debt. You don’t need a joint account to be allowed to write checks or make credit card purchases. A signed request by you will get check writing authorization or a second credit card for your child. Your estate is responsible for paying out debts to your creditors. If the amount of debt you have is greater than the assets, the assets are sold off until the debt is paid. If there is still debt after that, the creditor takes the loss.
Yes, according to the Florida laws, if you and your spouse are not legally divorced they have a right to claim an elective share of thirty percent (30%) of your elective estate no matter what your will provides for your spouse.
Yes, as long as the will is valid under the laws of the state or country where the will was executed. If you move out of state and need to make changes to your will, it is not necessary to go back to the same attorney if it is inconvenient.
Leaving real estate property to your children to be distributed equally can be problematic and actually cause more arguing among your children once you are gone. One child may want to sell it, and one may want to keep it for future generations.
Discuss with your children and get a plan in writing before meeting with an attorney. Consider a succession plan, or a buyout plan between your children just in case.
Yes, it is possible that an agent may not act in your best interests. A Durable Power of Attorney is a very powerful document and should only be granted with great care to a person that you have the utmost trust in.
You are able to revoke your Durable Power of Attorney at any time for any reason as long as you are legally competent to make decisions for yourself. Your estate planning attorney can prepare a Revocation of Durable Power of Attorney if you wish to revoke your Durable Power of Attorney.
A person can challenge your will by attempting to prove in court that you were under duress or influence while signing your will, you were incompetent and unable to make rational decisions when signing your will, or if your will does not meet the criteria needed to make it legal.
With a will, the original document is most important – only the original can be deposited with the Court. Some people choose to keep their original wills with their attorney, in a bank vault, or at home in a personal safe.
If your children are 18 or older when they inherit from you, they’ll have complete control of the property unless you specify otherwise in your will or living trust.
If you are worried that your 18 year old child is not financially responsible enough to have control of their inheritance, you can choose someone now to manage any property that your minor or young adult children may someday inherit from you.
- Get a list of all your assets and debts and their approximate value together. This includes items such as bank accounts, investments, real estate, and life insurance, and retirement accounts, credit cards, and loans.
- Make a list of people you want to leave your assets to.
- Decide if you want to name someone to make health care decisions on your behalf if you become incapacitated.
- If you have minor children, decide who you want to take care of them should something happen to you.
The revocable living trust, like a will, is a set of instructions whereby a grantor bequeaths the grantor’s property to designated beneficiaries. Instead of passing through probate administration like a will, trust property is instead re-titled in the name of the trust while the grantor is still alive. The grantors may act as trustee and beneficiary of the trust property during their lifetime. Upon the grantor’s death, the successor trustee(s), settle the estate and distribute the trust estate to the named beneficiaries. Thus, the time and expense of probate can be avoided. Additionally, Federal estate taxes can be eliminated or minimized.
Durable Powers of Attorneys allow their grantors to name an attorney-in-fact to manage the grantors’ financial affairs and execute financial documents on behalf of the grantors. Unlike a regular power of attorney, the durable power of attorney survives the incapacity of the grantor. Thus, the attorney-in-fact can manage the financial affairs of the grantor even in the event of dementia, stroke, heart attack, coma, Alzheimer’s disease or the like.
Any competent adult may also designate authority to a Health Care Surrogate to make all health care decisions during any period of incapacity. During the maker’s incapacity, the Health Care Surrogate has the duty to consult expeditiously, with appropriate health care providers. The Surrogate also provides informed consent and makes only health care decisions for the maker, which he or she believes the maker would have made under the circumstances if the maker were capable of making such decisions. If there is no indication of what the maker would have chosen, the Surrogate may consider the maker’s best interest in deciding on a course of treatment. The suggested form of this instrument has been provided by the Legislature within Florida Statutes Section 765.203.
Since the durable power of attorney is suspended once a guardianship proceeding is initiated, the designation of pre-need guardian spells out the maker’s intention to the guardianship court as to who should be the maker’s guardian. Therein, the maker designates a guardian of the person (healthcare) and a guardian of the property (financial). The designation of pre-need guardian allows the court to know the maker’s wishes as to the choice of guardian and creates a legal presumption in favor of that person. The only person who can select a guardian for you is a circuit court judge.
Under Florida law, a Living Will must be signed by its maker in the presence of two witnesses, at least one of whom is neither the spouse nor a blood relative of the maker. If the maker is physically unable to sign the Living Will, one of the witnesses can sign in the presence and at the direction of the maker. Florida will recognize a Living Will, which has been signed in another state, if that Living Will was signed in compliance with the laws of that state, or in compliance with the laws of Florida.
Please note, however, that Florida Statutes (765.104) allow for verbal statements made in front of two witnesses to rescind or modify the document if made by a competent individual.
Once a Living Will has been signed, it is the maker’s responsibility to provide notification to the physician of its existence. It is a good idea to provide a copy of the Living Will to the maker’s physician and hospital, to be placed within the medical records.
Under Florida law, designation of a Health Care Surrogate should be made through a written document, and should be signed in the presence of two witnesses, at least one of whom is neither the spouse nor a blood relative of the maker. The person designated as Surrogate cannot act as a witness to the signing of the document.
The maker can also explicitly designate an Alternate Surrogate. The Alternate Surrogate may assume the duties as Surrogate if the original Surrogate is unwilling or unable to perform his or her duties. If the maker is physically unable to sign the designation, he or she may, in the presence of witnesses, direct that another person sign the document. An exact copy of the designation must be provided to the Health Care Surrogate. Unless the designation states a time of termination, the designation will remain in effect until revoked by its maker.
Both the Living Will and the Designation of Health Care Surrogate may be revoked by the maker at any time by a signed and dated letter of revocation; by physically canceling or destroying the original document; by an oral expression of one’s intent to revoke; or by means of a later executed document which is materially different from the former document. It is very important to tell the attending physician that the Living Will and Designation of Health Care Surrogate has been revoked.
The traditional IRS marital tax deduction (unified credit) allows you to pass any size estate directly to your surviving spouse without the penalty of tax implications. The only drawback is, when the surviving spouse dies and wishes to pass the balance on to heirs there may be a taxable transaction due to the loss of the first spouse’s applicable tax exclusion. This loss can be mitigated by establishing a Marital Trust (A) (essentially the marital deduction) and Credit Shelter Trust (B).
Under the Credit Shelter Trust, when the first spouse dies, an amount equal to the approximate amount protected by the unified credit is placed into the Credit Shelter Trust with the crucial condition that the surviving spouse has the right to use the property for life and is entitled to any income it generates. This trust is not taxed at that time or at the later death of the surviving spouse, even though it may appreciate in value. By utilizing Credit Shelter Trust that takes advantage of federal credits, sometimes twice as much can be transferred to beneficiaries free of federal estate taxes. When the surviving spouse dies, the property passes to the trust beneficiaries, yet is not considered part of the second spouse’s estate for estate tax purposes. Assets remaining in Trust B can be passed directly on to heirs at the surviving spouse’s death.
Here’s How It Works. At death, an individual leaves an amount equal to the estate tax applicable exclusion amount to a credit shelter trust. In 2009, this is equal to $3.5 million. Federal estate taxes are repealed briefly in 2010 and then the exclusion amount reverts back to $1 million in 2011. The estate tax applicable credit amount is applied against the tax from this transfer and thus is exempt from federal estate tax. The trust can be used to provide the surviving spouse with income for life and principal payments if needed to maintain his or her lifestyle. When the surviving spouse dies, the entire value of the trust, including appreciation, is passed to the heirs of the original spouse, federal estate tax-free. Upon death, the estate tax applicable exclusion amount of the surviving spouse is applied to the value of his or her estate, which does not include the assets in the trust. Thus, the maximum tax savings is achieved by ensuring that both applicable exclusion amounts are fully utilized.
QTIP Protection: One special type of marital trust is the QTIP Trust. The QTIP provides a surviving spouse with income from the trust for the spouse’s lifetime. However, unlike other marital trusts, once the surviving spouse dies, the remaining trust assets are passed to those beneficiaries named in the first spouse’s will. Thus, an individual may provide financial support for a surviving spouse but retain control of, or direct the distribution of, the trust assets after the surviving spouse’s death. Upon the death of the surviving spouse, the entire value of the QTIP trust is included in the surviving spouse’s gross estate and may be subject to estate taxes.
Advantages The advantages of the Credit Shelter Trust are obvious. It allows double the assets to pass free from federal estate taxation. If all assets were left to the survivor and then the survivor became deceased, then the survivor would only be able to protect the basic level of assets from federal estate tax. By using the Credit Shelter Trust planning, double the amount of assets can avoid federal estate taxes. This would save a good deal in federal estate taxes.
Disadvantages The disadvantages of the Credit Shelter Trust planning are more practical than legal. One of the basic premises that we use in estate planning is that the estate plan not interfere with the way individuals want to live the rest of their lives. In this regard, the initial division of assets one-half into the husband’s name and one-half into the wife’s name is often impossible to accomplish. Often, the psychology of having the assets split into two names is something that clients do not want to or cannot deal with. One elderly client of ours said to me that he had been married for fifty-three years and was not about to split their assets up like they were divorced. Our argument that it would save estate taxes was not compelling to him.
Another practical disadvantage to the Credit Shelter Trust is that oftentimes spouses will be very reluctant to give up control over half of their combined assets. We describe their rights under a Credit Shelter Trust as follows: they have the right to the income, but they have to ask the trustee for more money. Most clients have grown accustomed to living on their entire asset pool and to have the freedom and independence that that creates. To tell them that because their spouse died, which is difficult enough to deal with, that then they have to give up full dominion and control over half of their assets adds another level of change to their situation that is often unacceptable to them. We have had a surviving spouse tell us that when she asked for a distribution from the principal of the Credit Shelter Trust for travel the trustee suggested a different destination or traveling at a different time of year. This resulted in severe agitation on the part of the surviving spouse of the trust because now someone else was telling her what she could do with “her money”. We also had a situation where a client had placed fifty percent (50%) of the stock of his company, which he had worked years to establish, into a Credit Shelter Trust that his wife had created to avoid estate taxes. His wife had her brother as the trustee of her Trust. When we told him that if his wife died, his brother-in-law would control half of the stock of his company, he went ballistic. The possible estate tax savings that would result from the Credit Shelter Trust simply did not offset the potential loss of control of his business.
The essential disadvantage of the Marital Deduction Trust is that the survivor is giving up absolute dominion and control over the assets in the Credit Shelter Trust. If this is something that will make the survivor uncomfortable, then this planning tool does not work.
With an Enhance Life Estate Deed, you could transfer the remainder to your child or to a revocable living trust that would permit greater control of the property after your death. The Enhanced Life Estate Deed is a specially designed instrument that is only available in a few states, including Florida. It is similar to a traditional Life Estate Deed, and there is no capital gains tax if the property is sold shortly after your death. However, you retain the right to change your mind. Without your child’s consent, you can take the property back and give it to someone else. In addition, you have the right to sell or mortgage the property and keep all of the proceeds without your child’s consent. To underscore the difference between the Traditional and Enhanced Life Estate Deed, with an Enhanced Life Estate Deed,
- The condominium association approval should NOT be required.
- You should NOT need mortgage company approval.
- The transfer should NOT affect your homestead tax exemption.
- You should be able to sell or mortgage your property without your child’s consent (although some title companies may ask for your child to sign).
- You will NOT be required to file a gift tax return since IRS considers the transfer and incomplete gift.
- The value of the interest transferred will NOT be considered as a completed gift for Medicaid purposes and will NOT be the basis for a “waiting period” that could delay your access to Medicaid benefits to pay for skilled nursing home care.
- However, if your child has any income tax liens or judgment liens, they may have to be paid off before the property can be sold. There are differences of opinion on this point. Until there are court decisions resolving these issues, we assume that the liens will have to be cleared. Many attorneys take the position that if you can sell your property without the signature of your child (the remainderman), then why should you have to pay off the remainderman’s lien in order to sell your property?
In conclusion, the Enhanced Life Estate Deed is an incredible tool for avoiding probate with minimal downside when compared to the alternatives.
Not really. There may be exceptions to this, one being if you and your spouse signed a nuptial agreement permitting such a distribution. Normally, if you pass away, the house you are both living in (known as your homestead in Florida) would either transfer solely to your spouse if you’re both joint on the deed or allow the spouse to reside there for his or her lifetime if they were not on the deed.
Unfortunately, even if a spouse has dementia, they are still deemed to be an individual, capacitated person unless a court order indicates otherwise. If there is no Durable Power of Attorney allowing you to act as your spouse’s agent, then a guardianship may be necessary to have the authority to act on your spouse’s behalf.
Yes, in two ways. First, it’s important to discuss your overall assets with your estate planning attorney so that they can help you best determine the most effective strategy for ensuring any funds remaining in your retirement and insurances go where you want them to go. Second, you can either designate beneficiaries of your various assets directly with the holding institution or simply have those accounts be distributed to the estate at death, with the Last Will directing the distribution or via a Trust. Again, discussing such matters with an Elder Law attorney is your best starting point.
The most immediate difference is that a Last Will guides the probate process and how the courts are to handle the distribution of your estate. A Revocable Living Trust (the only Trust discussed here, as there are many types of trusts) is usually not part of the probate process and is in place to help distribute your assets without the necessity of waiting for the court to permit the distribution of assets. Further, a Trust is the only option when seeking to distribute assets periodically over time or based on certain events. Other key differences should be discussed with an Elder Law attorney.
In general Florida Statutes 736.0801-736.0817 set forth the duties and powers of the Trustee. As a Settlor (creator) of a Trust is the initial Trustee, the answer to this question will be based on having the successor Trustee accepting such role. Most importantly, after a trust administration is initiated, the Trustee has 60 days to provide notice to all Qualified Beneficiaries (QB) of the Trust. A copy of the trust must be provided if a QB requests it. A Trustee must also provide an accounting of the trust assets to the QBs.
Under most circumstances, the creation of a Revocable Living Trust is coupled with the drafting of a Last Will. Revocable Living Trusts (the only Trust discussed here, as there are many types of trusts) are usually not part of the probate process and are in place to help distribute your assets without the necessity of waiting for the court to permit the distribution of assets. Further, a Trust is the only option when seeking to distribute assets periodically over time or based on certain events. Other key differences should be discussed with an Elder Law attorney. The Last Will is merely an instruction manual for the courts as to how the Testator (maker of the Last Will) would like to have their assets distributed after passing away. Without a Last Will there would be only the default state statutes for the court’s guidance. Filing the Last Will provides the necessary direction to the courts and the Personal Representative (aka Executor) as to how your mother wants the assets distributed.