Estate Planning Fundamentals

In the absence of planning to the contrary, your estate will be distributed according to Florida’s laws of intestacy. This so-called “default” estate plan might not reflect your wishes. This is a one of the benefits of estate planning.  With advance planning, your estate will be administered according to your exact preferences.

Planning is important for every adult – whether you are single or married, have children or do not, old or young.  At Perlin Estate Planning & Probate, we get to know you and understand your specific needs and concerns.  In doing so, we can a tailor a plan that’s just right for you.

Please read on for some additional details about estate planning documents.

Trust

A Trust can serve a variety of legal, personal, investment and tax planning purposes. At the most basic level, a trust is a legal entity with at least three parties involved: the trust-maker (the grantor or settlor), trust manager (the trustee), and the trust beneficiary. Sometimes, all three parties are one person or a married couple. In the case of a revocable living trust, a person may create a trust and name himself or herself as the current trustee to manage the trust assets, and can also be the beneficiary of such assets.

There are many advantages to creating a trust. One significant advantage is the avoidance of probate. In most cases, assets owned in a revocable living trust will pass to the trust beneficiaries immediately upon the death of the trust-maker(s), with no probate required. Certain trusts also may result in tax advantages, both for the trust-maker and the beneficiaries. Trusts may also be used to protect property from creditors, or simply to provide for someone else to manage and invest property for the trust-maker(s) and the named beneficiaries. If properly drafted, another advantage of trusts is their continuing effectiveness, even if the trust-maker dies or becomes incapacitated.

Will

A Will is a part of a comprehensive estate plan. If a person dies without a will, he/she is said to have died “intestate” and state law will determine how the assets will be distributed. Some things to know about wills:

• A will has no legal authority until after death.
• A will does not help manage a person’s affairs if he/she becomes incapacitated.
• A will does not help an estate avoid probate.

For parents of minor children, a will is a critical document; it is used to nominate the guardians of minor children, should they be orphaned. All parents of minor children should document their choice of guardians within a Will. Without doing so, it is possible to cause family infighting, or to leave your children in the care of the wrong guardian.

Power of Attorney

A power of attorney is a legal document giving one person (the “Agent”) the legal right to do certain things on behalf of the person who grants those powers. A power of attorney may be very broad and comprehensive, or very limited and specific. All powers of attorney terminate upon the death of the principle, and may also terminate when the principal becomes incapacitated. When the intent is to designate a back-up decision-maker in the event of incapacity, then a durable power of attorney should be used. Durable powers of attorney do not end at incapacity; however, because banks and other financial institutions may hesitate to honor a power of attorney that is more than a few years old, durable powers of attorney should be updated regularly.

A Power of Attorney is an important document for every adult, regardless of your financial situation or age.

Health Care Documents

A Health Care Power of Attorney is a document that specifies the medical and personal care desires of a person who loses the ability to make his or her own decisions. A Living Will speaks to one’s desires with respect to end of life decisions. For example, a person may want to deny treatment if such person is in a permanent coma with no reasonable chance of recovery.  An additional important document is a HIPAA Authorization – an authorization to your medical providers that allows specified individuals to medical information. Without this prior written authorization, doctors are prohibited from disclosing confidential medical information.

Health Care Documents are important documents for every adult, regardless of your financial situation or age.