Estate Planning Fundamentals
Coral Gables, Miami & South Florida Estate Planning Law Firm
In the absence of any 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. However, with advance planning, your estate will be administered according to your preferences.
Last Will and Testament
A last will and testament is one 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 you should 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, as it can be used to nominate the guardians of your minor children, should they be orphaned. All parents of minor children should document their choice of guardians. Without doing so, it is possible to cause family infighting, or to leave your children in the care of the wrong guardians.
Trusts can serve a variety of legal, personal, investment or 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, as well as 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.
Power of Attorney
A power of attorney is a legal document giving one person (the attorney-in-fact) the legal right to do certain things on behalf of another person who grants those powers. A power of attorney may be very broad or may be very limited and specific. All powers of attorney terminate upon the death of the principle, and may 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 should be frequently updated, because banks and other financial institutions may hesitate to honor a power of attorney that is more than one year old.
Health Care Documents
A Health Care Power of Attorney is a document that specifies the type of medical and personal care a person desires if such person loses the ability to make and communicate his or her own decisions. Anyone over the age of 18 may execute a Health Care Power of Attorney, and this document is legally binding in Florida. In addition, a Living Will is an important document that 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 document that usually accompanies the Health Care Power of Attorney and Living Will is an authorization to your medical providers that allows specified individuals, who could be friends or family members, access to medical information. Without this type of prior written authorization, doctors are prohibited from disclosing confidential medical information.
South Florida Estate Planning Attorney Brian C. Perlin, assists clients with Estate Planning, Elder Law, Probate Court, Probate & Estate Administration, Long-Term Care, Medicaid Planning, Veterans Benefits, Charitable Planning, Special Needs Planning, Estate Tax Planning, Business Succession and Asset Protection, in the cities of Miami, Coral Gables, and Kendal, Florida, and the surrounding areas.
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