The law firm answer…..it depends. Did mom leave written signed instructions? If she did, her personal property will be distributed according to her wishes. But if she did not let her wishes be known in a comprehensive estate plan, there could be dissention among the heirs.
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When you own and operate a business, your Buy-Sell Agreement is probably the last thing on your mind. It’s something your business attorney drafted years ago and most likely you have not thought about it since. Or, maybe you don’t have one at all! Just like your personal estate planning, having an estate plan for your business is very important. Without a buy-sell agreement, a closely held or family business faces the possibility of financial and tax problems on an owner’s death, disability, divorce, bankruptcy, sale or retirement. The benefits of having a buy-sell agreement in place far outweigh the cost of creating and maintaining the agreement. A buy-sell agreement can ward off infighting by family members, co-owners and spouses. The buy-sell agreement can also help keep the business afloat in the event of one of these major life events.
For many, the New Year comes with New Year’s resolutions. If you have not completed your estate planning, or have not updated your planning in some time, doing so would be a good resolution to have. You might be surprised to know, estate planning does not simply mean having a plan for what happens in the case of your death. A comprehensive estate plan also includes planning for what happens in the event of your disability – specifically, if you are not mentally competent. This part of estate planning may be overlooked or missed but it can be the most important part of
The answer is NO. When a person dies leaving a Will and/or Trust, the nominated Personal Representative or Successor Trustee is not obligated to use the attorney who prepared the documents to administer the estate and/or trust.
What is a trust?
Anytime legal terms start to be used, it is easy to get confused, especially with words that have other meanings in our day to day conversations. In this instance, a trust is a legal entity, similar to a corporation, which can own assets like bank accounts and real estate.
What does a trust do?
At the most basic level a trust simply controls assets for an individual or individuals. However, trusts can be used to provide for loved ones, maintain privacy by preventing assets going through the probate process, and ensure that our wishes are carried out when we pass.
How does it work?
Once a trust has been established, an individual or individuals can transfer their ownership of certain assets to their trust. From there, the rules established in the trust agreement will determine how the assets are managed. The person or persons who manage the assets are called “trustees”.
What stuff can go into a trust?
Cash accounts, investment accounts, stocks, and bonds are examples of assets that a trust can directly own. However, trusts can be the beneficiaries of some insurance policies, as well as retirement plans and annuities, allowing these assets to be distributed by the trust as well.
Should you create one?
The steps we take as we plan for the future of ourselves and our loved ones always depend on our circumstances. Perhaps you have a parent, a spouse, or a child that relies on you for assistance. Maybe you don’t like the idea of your finances entering the records of the public and would prefer they just go to the people they’re intended for. Or, as we so often do, you have expressed your wishes informally in conversation with family and friends, and expect that they will know what to do when the times comes. Too often these desires can be confused, forgotten, or even ignored as people grieve.
If you have loved ones who you want to ensure are financially cared for, if you want to prevent your assets going through the public setting of probate, or if you simply want to make certain that your wishes are known and followed, then a trust may be the right kind of planning for you.
The scenario: Hank and Janice were married, had a daughter together, Elsie, and then got divorced. Hank died intestate, without a will, so pursuant to Florida law, Elsie was the beneficiary of his estate. Elsie was not married and had no children. She died before receiving her distribution from Hank’s estate. What happens to her distribution? It will now go to the beneficiary of Elsie’s estate. Having died with no spouse or children, Elsie’s beneficiary is her mother, Janice. So Janice has now become the beneficiary of her ex-husband’s estate. Do you think this is what Hank would have wanted?
The take-away from this scenario: With proper planning, this could have been avoided.
Bob and Kate are an unmarried couple, neither of whom have children, and who live together in a home owned by Bob, individually. Let’s say Bob dies. The good news is he has a signed will. The bad news is he prepared the will himself, without consulting an attorney. The will leaves his home to Kate, who intends to continue living there just as she has for many years. (more…)
A commonly asked question is, “Should I own my homestead in my trust?” Generally, the answer is, “No.” This is not because of your ad valorem homestead exemption or even your Constitutional protection from the claims of creditors. It is not because we don’t want you to avoid probate. Instead, it is because Florida law dictates who can receive your Florida homestead property.
Florida has very unique and strict laws regarding the distribution of your primary homestead residence after you die. Specifically, if you die owning your homestead property in your individual name and you are survived by a spouse or a minor child, Florida law dictates to whom you can leave your property. If you are survived by a spouse and no minor child, you can only leave your property to your spouse. If you are survived by both a spouse and a minor child, the spouse automatically receives a life estate and your lineal heirs (all your children) receive the remainder interest. If you violate the law by directing a different result, the law will prevent your intended distribution and substitute its statutory rule, as outlined above. (more…)
With summer quickly approaching, if you are preparing to travel, don’t forget these important legal documents you need to include in your suitcase. We never think an accident or illness will happen while away from home. Are you prepared? There are two legal documents you will want to have a copy of in case of an emergency. (more…)
Most people under the age of 40 consider estate planning something to be done “someday”. They hope that they will live a long and healthy life. The reality is there are no guarantees. Your estate plan is similar to a hurricane preparedness plan. You should have one in place so when the storm or disaster strikes, you are ready. The difference with an estate plan is that, eventually, we will all need one.
Lack of estate planning by younger families can result in confusion, resentment and acrimonious feelings between family members. Who will become the guardian of any minor children? Who takes control of the family residence and decides what happens to it? What about any other property the couple has amassed in their time together, such as a vacation home or family business?
With an estate plan, you and your spouse get to make those decisions. Without an estate plan, these decisions could be left up to the court in your state of residence and the laws they have created regarding intestacy (dying without a will or trust in place). If thinking about creating an estate plan scares you, think about a judge whom you’ve never met deciding what happens to your wealth, your children, your pets and anything else that matters to you. That should frighten you enough to at least look into creating an estate plan!
Estate planning is not about the amount of stuff you have, it’s about what happens to it once you are gone. If you have young (minor) children, it is essential to create a plan naming initial, as well as, alternate guardians for them. With a valid will or trust in place naming specific guardians, the court can follow your wishes and does not have to make an independent decision. You can also decide how distributions are to be made for your children. For instance, will your funds be used for college or graduate level education? An initial investment in a business? A first wedding? How much can they pull from the trust and at what age?
Once you have the plan in place, you can revisit it every few years as your circumstances change. For instance, if your children are now grown and married with children of their own, you may want to update your plan to include your grandchildren. If some of your beneficiaries or agents have died or moved away, you may want to update who has responsibility for executing your wishes.
Having a plan in place is the key. Seek the advice of a qualified estate planning attorney to guide you through the preparation of a will and related estate planning documents. For more information or to schedule an appointment, call our office at (407) 977-8080.