This article is provided by Mary King, ESQ, a Sarasota based Attorney speaking with knowledge that seniors need to know about estate planning, financial choices and challenges. Legal anf financial literacy in older age will assist seniors with financial issues and making informed decisions in Florida.
As an estate planning attorney who meets with clients to discuss their estate needs, I have found over the years that there are number of myths that persist about wills, trusts and probate in the State of Florida. Before we delve into those myths though, it is even more crucial to know what 4 estate planning documents that every single individual should have at a minimum: a Last Will and Testament, a Health Care Surrogate, a Durable Power of Attorney and a Living Will.
This is not to say that more complicated estate planning techniques, beyond tha 4 minimum documents mentioned above, may be appropriate for certain individuals. This is where an education and counseling focused attorney can assist clients in learning how to best plan their estates to meet their goals and needs both while they are living and after they pass on. For the purposes of this article, however, I am just going to discuss the documents mentioned above and why they are so important for seniors living in Sarasota, Florida.
Wills vs. Trust
When a person dies, they have prepared either a Last Will and Testament which is called testate, or in the event that they have not prepared a Last Will and Testament,they die intestate. In either situation, their estate must be probated by the Florida Courts. The Florida Statutes provide the outline for the administration of a probate estate.
A will is a document which only begins to function at the time a person passes away. Essentially, it is an instruction book to the Executor (in Florida called a Personal Representative) about how to dispose of assets after all expenses and obligations of the Estate are taken care of following the person’s demise. In the event that there are minor children of the decedent, a guardian may be nominated within the Will to care for their personal and financial needs. therefore, a Will serves to take away the speculations about a person’s final wishes which may otherwise arise when a person dies intestate.
In my estate planning conferences with clients, many times I have heard these clients express the myth that if they die without a will, their entire estate will go to the State of Florida. As stated earlier in this article, the Florida Statutes provide for the administration of estates in our State. Those statutes also provide for how intestate estates will be distributed. In most cases, the assets are distributed to the family members in percentages which are set forth in the statutes. However, in very rare instances, when a person dies without family members, the estate would go to the State of Florida.
Regardless of whether or not it is a testate or intestate case, family members are protected from the decedent’s creditors by way of Family Allowance and Exempt Personal Property set asides. Through these provisions in the Florida Statutes, the surviving family members that were dependents of the decedent are entitled to receive up tp $18,000 per family expenses during the probate process. Under the exempt personal property provisions, the furniture, and personal automobiles owned by the decedent are also protected from creditors.
A few final thoughts regarding the Last Will and Testament and probate process. As a general rule, the probate process will take apporxiamtely six (6) months to a year depending on the variety of factors, which include but not limited to the state of the real estate market if there is a real property to be sold. Within the provisions of a Will, a testator cannot project his testemetary wishes beyond the time frame of the probate process; ie. he cannot control the disposition of his assets beyond the grave. Should a testator decide what wishes to retain control over how the assets are distributed over time to his beneficiaries, then he may wish to consider the use of a Revocable Living Trust which provides more options both during life and thereafter.
Trusts have been used for hundred of years. The basic trust agreement consists of a Grantor who appoints a Trustee to manage the assets of the estate for the benefit of certain named individuals.Over the years, Florida has enacted numerous statutory provisions governing trusts,the most recent and sweeping changes occur in 2007, which substantially changed the Florida Trust Code completly.
Unlike a Will, when trust is formed it is a separate and distinct entity from its creator, the Grantor. In other words, when the grantor appoints a trustee to manage assets for the benefit of the individuals he has selected, a separate legal entity comes into existence, which holds title to the assets. Due to the fact that this is a separate legal entity, it can exist long after the Grantor’s death, thereby providing for distribution of assets far into the future according to the Grantor’s wishes.
As an estate planning attorney, not only do I concern myself with designing strategies that minimize a client’s exposure to creditor’s attacks, but also try to reduce their overall estate tax liability at the time of death. Both of these objectives may be attained by focusing on the client’s goals and determining the appropriate estate planning strategy for them. However, it is also important to focus on the client’s needs during their life. Therefore, I recommend to clients that they try to anticipate and provide the necessary tools to deal with periods of incapacity. With that in mind, almost all clients that I prepare a will or trust for will also receive a set of power of attorneys.
Durable Power of Attorney
A Durable Power of Attorney grants immediate authority to a trusted individual to buy, sell, mortgage, and many other financial powers that become invaluable during a period of incapacity as a result of illness or accident. Unlike a general power of attorney, the power conferred is durable, meaning it is unaffected by the person’s disability.
Health care Surrogate and Living Will
The designation of health care surrogate and living will are also durable powers. However, they are specifically limited to medical and hospital settings. Through the preparation of these documents prior to the time a person is incapacitated, a person can express their wishes for their medical care during periods when they are unable to do so. This can become especially important in the event of a serious or catastrophic illness at a hospital, hospice or nursing home.
By preparing a living will and designation of health care surrogate when they are well, these documents enable a seriously ill or comatose patient to designate a trusted friend or family member to prevent the use of respirators and other heroic medical treatments and life sustaining measures that may be viewed as only extending life when there is no reasonable hope or expectation of recovery.
In conclusion, this has been a very brief discussion of estate planning options. Numerous options exist for advanced planning techniques for those individuals who are interested in qualifying for Medicaid benefits, as well as asset protection for high-net worth individuals but may be interested in meeting with me to discuss estate planning or one of my other practice areas, please contact me at (941) 906-7585 or visit my website at www.kinglawpl.com.
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