Florida Estate Planning and Probate Law Blog focused on recent case law and planning ideas.

PREPARING FOR YOUR ESTATE PLANNING MEETING

Many individuals become overwhelmed with the decisions that they need to make when preparing or updating their estate planning documents. The purpose of this list is to help you analytically consider all the questions and issues that must be addressed, provide you with time to reflect on them and work your way through what will be discussed at your meeting with your estate planning attorney. The goal is to achieve your planned result.

1. Create A List Of Your Assets And Liabilities. Knowing what you own can make the estate planning process a lot simpler. Your asset list should include your house (and mortgage), bank accounts, investment accounts, business interests, personal belongings with value (e.g., artwork or jewelry), insurance policies on your life and retirement accounts. For each asset on the list, include an estimate of its value or current balance, as well as whether you own the asset in your individual name or in joint name with another person, such as your spouse. It is equally important to make a list of your debts and legal obligations (mortgage on home, lines of credit, business loans that you have personally guaranteed, etc..

2. Decide Which, If Any, Personal Belongings You Want To Leave To A Specific Person. You should consider what you own and to whom you want it to pass upon your death. The value of the item should not be a consideration as it may have great sentimental value to the recipient. Most couples provide that all of their household furnishings, jewelry, collections, etc., pass to the surviving spouse, when the first spouse dies, and then everything will be divided equally among their children when both of them are gone. If there is a concern that your children or heirs may fight over items which have nothing more than sentimental value you should consider empowering an independent individual to be the ultimate decision maker.

3. Who Should Be The Personal Representative(s). A Personal Representative is the individual or entity appointed to administer your estate at death.  Their duties include collecting your assets, paying debts, expenses and any taxes that may be due and then distributing the assets as directed by your estate plan. People typically name their spouse and then child(ren) to serve as the personal representative of their estate. Florida law only requires that the individual named be (i) a state resident; or (ii) family member.  You can also name more than one person to serve as your Personal Representative.

4. Outright Distributions or Creation of Trusts For Your Children And Grandchildren. Since it is your hard earned money, at your death you can decide how and to whom you want it distributed.  You can elect to have it all distributed to your surviving spouse and then child(ren) or held in trust for their benefit and distributed to future generations. Other options include dividing the trust property into equal/unequal shares, with each share held in trust for a child or grandchild until they reach a specified age (e.g., 1/3 at age 30, 1/3 at 35, and the balance at 40), or their entire lifetime (Florida allows a trust to exist for 360 years after the creators death) or attain certain accomplishments (college or post-graduate degree). Two benefits of holding an inheritance in trust is that (i) the property can be insulated from the claims of that beneficiary’s creditors, including a divorcing spouse; and (ii) it can prevent rapid depletion of the funds by a youthful recipient. 

5. Who Should Be The Trustee(s). As with the appointment of a Personal Representative, the individual or entity that select as the trustee of your trust, following your death, can be a family members, friend and/or professional.  The trustee will be responsible for managing the assets and making sound distribution decisions, so there will be adequate resources to meet your spouse’s and/or your children’s needs after you are gone. Unlike a Personal Representative, there is no restriction on who you can select to serve as a trustee.

6. Who Should Make Medical Decisions For You If You Are Incapacitated. Your health care surrogate is appointed as your agent to make health care decisions for you. Make sure the individual(s) selected are capable of performing their responsibilities on your behalf. There is no restriction on who you can select to make these decisions on your behalf.

7. Who Should Take Care Of Your Financial Affairs If You Are Unable.  Your power of attorney appoints the individual(s) to act as your agent with regard to financial matters during your lifetime. In Florida, a power of attorney is in effect immediately after execution, even if you are not incapacitated. There is no restriction on who you can select to make these decisions on your behalf.