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“The definition of Estate Planning is the process of anticipating and arranging, during a person’s life, for the future management and disposal of a person’s estate when the person becomes incapacitated or after death.
Estate Planning includes the bequest of assets to heirs and may minimize gift, estate, generation-skipping transfer, and taxes.
Estate planning includes planning for incapacity and a process for reducing or eliminating uncertainties over the administration of a probate and maximizing the value of the estate by reducing taxes and other expenses.
Guardians are often designated for minor children and beneficiaries in incapacity.“
What Estate Planning Means to You:
We all will suffer the loss of a loved family member. The stress, the pain, anguish, and added stress of dividing the deceased property among other family and friends.
How can you greatly diminish this stress on your loved ones when you pass?
With an “Estate Plan.”
Solid Estate Planning protects your family as well as the assets that you accumulated while alive. Estate Planning allows you to decide what happens to your assets. If you don’t have one in place, the Commonwealth’s laws of intestacy will decide. You want to give your family peace of mind, and having Estate Planning will do that. The Lexwerx Law Firm, LLC, of Tampa, Florida, is an experienced legal firm that understands Estate Planning. Meeting with our legal team can help clients create the right plan to carry out their final wishes.
Frequently Asked Questions
Estate Planning arranges for the transfer of an individual’s assets after their death and may involve a will and/or trust or the application of state intestacy laws.
An Estate Plan allows an individual to decide who will benefit from their estate and to what extent.
It also ensures that the estate will not be destroyed by Federal, State, and Local taxes imposed on the transfer of assets at death.
By having an Estate Plan, you will provide your family and loved ones with peace of mind.
They won’t have to worry about what happens to your assets, including money, property, and investments.
You have clearly decided as to what will happen with your money through a will or trust.
Your family may have an easier time dealing with your unexpected death because of your decision and instructions.
Moreover, proper planning can save your estate thousands in court-related expenses.
An individual’s estate consists of all property owned at death before it is distributed by will, trust, or intestacy laws.
An individual’s estate may contain real estate, houses, houses, investment properties, and personal property (all other property, including bank accounts, securities, jewelry, and automobiles).
There’s no definitive answer, but even a single, 30-year-old millennial should have a Will, Health Care Proxy, and Durable Power of Attorney in place.
It would be best if you prepared for the unexpected, and you want to take care of your family.
If you have children or significant assets such as a house, property, investments, retirement accounts, and other financial accounts, you will want to have an estate plan. Please don’t procrastinate! Your loved ones will thank you.
There is no law requiring individuals to complete a will.
In most cases, however, it is a good idea to make some plans regarding the dispersal of your finances and property after you die.
First, creating a will allows you to control how your assets will be distributed after you die.
If you pass without creating a will, you will not have any say in what happens to your personal property, real estate, and finances.
A will allows you to determine who will receive your assets or whether certain individuals should be prohibited from receiving any of your property.
This is known as disinheriting an heir.
Often, designating the individual responsible for winding up your affairs can make all the difference in how smoothly your estate is distributed and closed.
Many people who make a will find peace of mind knowing that they’ve selected someone they trust to see to their final affairs.
If you have minor children, a will allows you to provide a plan for their care in the unfortunate circumstance that you pass while they are still minors.
Additionally, a will can often allow your surviving heirs to avoid having to go through the lengthy and complex probate process.
Another reason to create a will is to avoid estate taxes.
The amounts that you bequeath to your beneficiaries or heirs will not be counted toward your final estate tax accounting.
A will is not permanent and can be changed throughout your lifetime.
This allows you to make any modifications necessary should you decide to distribute your estate differently later.
A person who passes without a will is referred to as “intestate.”
Each state has enacted a set of intestacy laws that make provisions for how a deceased individual’s assets should be distributed if they pass without a will.
Since each state has the authority to create its own intestacy laws, the procedures that apply after an intestate individual passes vary greatly.
In general, however, each state’s laws provide a list of the decedent’s next of kin in the order in which they will receive a portion of the decedent’s estate.
For example, a state may specify that the decedent’s surviving spouse receives the decedent’s property or that the decedent’s surviving spouse receives one-half of the estate and the decedent’s surviving children receive the other one-half of the estate in equal shares.
These laws vary, particularly where the surviving children are from a previous marriage and unrelated to the surviving spouse.
If the decedent is single and has no surviving children, the decedent’s parents are typically next to receive the decedent’s property.
If the decedent has no surviving parents at the time of their death, the estate is divided among the decedent’s surviving siblings in equal shares.
If an individual passes without surviving siblings, their estate is divided among their siblings’ descendants.
It is important to look up the intestacy rules that apply in your state.
Whether or not you need an Estate Planning Lawyer to help you draft a will generally depend on your assets’ extent and complexity.
Many people will only use a will to pass on things like a home or personal property to their loved ones.
It is important to meet certain basic procedural requirements in preparing your will, like making sure you have witnesses when you sign the necessary documents.
However, with some careful reading and research, it is certainly possible to draft a valid will on your own if your estate is relatively simple.
If your estate will be more complex and/or involves significant assets, it may be best to work with an attorney to ensure that your wishes are carried out concerning the disposition of your property.
Losing a family member is one of the most difficult and challenging experiences that someone can endure.
The last thing that many people want to think about during this time is tying up their loved one’s affairs and ensuring that everything is seen to properly.
One of the first things that you should attend to after losing a loved one is obtaining a legal pronouncement of death.
A doctor or medical professional usually performs this.
If your loved one dies at home or under hospice care, however, you may call the hospice nurse, who can make the pronouncement of death and arrange for the transportation of the body to the hospital.
If your loved one dies outside these circumstances, you can call 911.
Without a do-not-resuscitate document executed by the decedent, the paramedics will likely engage in life-saving measures upon arrival.
You can also transport the decedent to an emergency room and have the emergency room physician to make the pronouncement.
Next, it is a good idea to notify the decedent’s family physician and the county coroner.
Close friends and family should also be notified of your loved one’s passing.
If the individual was working at the time of his or her death, it is a good idea to notify his or her employer and make any inquiries necessary regarding the payment of benefits.
If the individual had a life insurance policy, it is also a good idea to contact the policy issuer.
If the decedent has any minor children or pets, you will need to arrange for any necessary care or supervision.
If the decedent died with a will or trust, there might be instructions regarding the care of any minors or pets provided in the document.
A “Living Will” is a statement that details the author’s wishes regarding his or her medical treatment if they are no longer able to communicate informed consent.
An advance healthcare directive provides specific instructions to healthcare providers should a range of circumstances arise.
For example, if you are in a coma, in a vegetative state, terminally ill, or so sick that you cannot communicate, the advanced healthcare directive can let your treating physicians know what measures they should use to treat you.
In many cases, people use advanced healthcare directives to let their physicians know that they do not want any extraordinary life-saving measures.
A power of attorney is a form of advanced healthcare directive that allows you to appoint someone to make healthcare decisions for you if you cannot make them for yourself.
The document is referred to as a durable power of attorney, a healthcare proxy, or a healthcare surrogate in some states.
When selecting a power of attorney, it is important to choose someone whom you trust and to spend sufficient time explaining your wishes to them.
A living will or advanced healthcare directive can ensure that your wishes are carried out even when you cannot explain them or express yourself.
Many people think that these options are only for the elderly, but even young persons should consider making some provisions for their health care and distributing their assets.
Each of us is different, but here are some basics things an estate plan may include:
- A simple will or one that addresses a more complex estate with significant assets and property
- Guardianships and conservatorships, where your will includes the naming of a guardian if you have children, and a conservator for incapacitated adults in your care
- A trust that lets you manage assets while you are still alive, thus sidestepping the probate process
- An agent’s appointment under a durable power of attorney — a trusted person who will take care of your legal, health, and financial responsibilities if you are mentally incapable.
- A health care agent who will make decisions about your medical treatment if you are incapable of doing so
- A health care directive that includes instructions on what to do if you may be near death or suffer from a terminal illness
Probate is the process that courts use to enforce the provisions of a will and deal with any disputes regarding the decedent’s estate.
After an individual dies, the person named in their will as executor will file papers with the court informing the court that the individual has passed.
If there is no executor named in the will, the court will appoint someone to take on the executor’s role.
Next, the executor must prove the veracity of the individual’s will and provide the court with an inventory of the decedent’s property and debts and a list of people named in the will as beneficiaries.
A beneficiary is someone who is provided with a gift in the will.
Probate can take over a year to complete because of the many steps that the executor must accomplish. The more complex and intricate the estate or will, the longer it will tie up loose ends.
For example, the executor must secure the decedent’s assets and manage any assets that remain unsold or undistributed during the probate proceeding’s pendency.
For assets that are not distributed to a beneficiary, the executor will have to decide whether to sell the property or distribute it in a bequest. In other circumstances, a will may make a series of cash bequests.
If the estate does not have enough cash on hand to satisfy this bequest, the executor may need to sell non-accounted-for assets to generate the cash needed to pay these bequests.
Each state has different probate laws. It is important to check with your local court to determine how a probate proceeding should be initiated and conducted before taking action.
Some aspects of a probate proceeding may prove unfruitful or inconvenient for a decedent and his or her heirs.
First, the probate process can take over a year to complete.
The more complex and intricate the decedent’s estate and will, the longer it will take to accomplish all of the procedures necessary to tie up loose ends.
The longer a probate proceeding lasts, the more fees that are associated with it.
In many cases, the executor will hire an attorney to help him or navigate the probate process.
Like a regular civil court or criminal court, the probate court has its own set of complicated rules and procedures.
For some families, probate is filled with many disputes and disagreements regarding the decedent’s assets’ disposition.
If a family member or other individual disagrees with how the executor is handling the will, for example, he or she can file a petition seeking a court review of the executor’s actions.
Probate proceedings are public, and any documents filed associated with the probate of a will are available for public viewing.
If your loved one has any personal or sensitive information available in his or her will, this information will therefore be available to the public.
Since some wills contain detailed information about family history or controversial information like the disinheritance of a relative, the public nature of a probate proceeding can create unwanted tension.
Some ill-intentioned wrongdoers routinely peruse probate filings to identify potential robbery targets.
Most decedents’ homes remain empty after they pass, leaving their valuables vulnerable.
A “Trust” is a written document that places your assets into a trust for your benefit during your lifetime. That provides for the transfer of those assets to a specified individual or individuals upon your death.
In many cases, these individuals are referred to as secondary beneficiaries.
Unlike with a will, legal title to the identified assets is placed in the trust.
The beneficiary will appoint a third party to serve as the trustee of the estate.
The trustee is responsible for managing the trust’s assets and seeing any transfers necessary upon the beneficiary’s death or incapacitation.
One of the most attractive benefits of a trust is that they do not require probate.
There are many circumstances in which a will must be administered through the probate process, which can be costly, time-consuming, and extremely public in nature.
As a result, the administration of trust following a decedent’s death typically allows a faster distribution of the assets contained therein than the administration of a will.
In some situations, the secondary beneficiaries become primary beneficiaries immediately upon the trust founder’s passing.
A trust can also provide a method for increasing your financial stability and providing a better outcome for the secondary beneficiaries.
A trust’s assets can remain in investment accounts during the founding beneficiary’s lifetime, allowing them to increase in value.
Additionally, a trust provides the founding beneficiary with significantly more privacy than a will.
A trust can be designated as confidential and remain unavailable to prying eyes.
It is possible to provide for your pet through a will, though you will generally want to leave money for pet expenses in the care of the person taking the pet rather than leaving money directly to the pet.
In this situation, it is also important to identify a backup caregiver, provide care instructions, and specify that the funds you are leaving to any caregivers are intended for your pet’s care.
You also have the option of setting up a trust for your pet, though this is an expensive and complicated process that likely won’t be the best fit for most people.
In the absence of a will or trust, there are animal care non-profit and rescue organizations that can help locate a good home for your pet. Still, it can be risky to rely on this option if such organizations do not have the capacity or are not located in your area.
Finding a friend or family member who will agree, either legally or informally, to take care of your pet and setting aside funds and information for pet care may be the safest option.
Current federal laws require United States citizens and residents to pay three types of taxes on a transfer of property: estate tax, generation-skipping transfer tax, and gift tax.
An estate tax, which is also referred to as an inheritance tax, constitutes a tax on your right to transfer property at the time of your death.
The first step to calculating your estate tax is to determine your “gross estate.”
This typically includes every asset and interest that a person owns or has an interest in at the time of their death.
Some other calculations and additions are conducted when determining an individual’s gross estate.
For example, the value of any property that the decedent had, at any time, transferred during the three years before his or her death is added to the decedent’s gross estate, even if he or she no longer owns the property at the time of death.
After calculating the gross estate, federal law allows certain deductions to be made on the “taxable estate.”
These deductions include, but are not limited to, funeral expenses claims against the estate, administration expenses, contributions to charitable organizations, and certain bequests made to surviving spouses.
Calculating the amount of inheritance tax owed also requires determining the tentative tax base that applies to the estate. The tentative tax base schedule changes each year.
Check with the IRS website to determine which figure will apply to a particular estate.
At least 15 states have an estate tax, and over five states have an inheritance tax.
Some states, like Maryland and New Jersey, use both.
Check with your state’s rules to see what tax obligations apply in your location.
A Power of Attorney is a document that grants a specified individual the right to act as the grantor’s attorney in fact or agent should the grantor become incapacitated.
The laws governing the creation of powers of attorney and the scope of the designated individual’s authority vary from state to state.
In most cases, however, the individual who creates a power of attorney, often called the principal, can dictate the scope of the individual’s authority.
For example, the principal can designate one person to deal with one particular issue, which is called a specific power of attorney or provide him or her with broad authority to handle any issues that arise should they become incapacitated.
The latter version is called a general power of attorney.
An attorney-in-fact is responsible for maintaining accurate and diligent records of all transactions and decisions that they make on the principal’s behalf. Some of the types of decisions that an attorney, in fact, can make include gifts of money, financial decisions, and the recommendation of a guardian for the principal’s minor children or dependents.
Many people use attorney powers to make healthcare decisions for them if they become incapacitated.
A power of attorney can be given the authority to give, withhold, or cease all medical treatments, diagnostic procedures, or services.
The document will usually include instructions from the principal regarding how far they want their treating physicians to go before ceasing all life-saving measures.
The principal can designate an adult as his or her attorney, including an adult child or trusted friend.
When leaving money to a charity, however, it is important to consider certain taxes and exemptions that will be applied to your contribution.
Leaving money to a charity in your will typically results in a charitable tax credit of up to 50 percent and may result in other exemptions from estate tax calculations.
In most cases, leaving money to a charity will result in a reduction of the inheritance tax that must be paid during the administration of your estate.
When identifying the charities to which you would like to donate, it is important to ensure that they do maintain a government-recognized charitable organization status.
Individuals who leave large gifts to charities in their wills should be aware that a family member might contest the bequest.
Some family members feel slighted when they realize that the family member bequeathed more to a charity than to him or her.
The probate system allows a family member to file an objection to the executor’s administration of the decedent’s will.
These objections can include an objection to the amount of money provided to a charity.
A trustee can also be directed to contribute to a charity upon your passing.
The trust documents can contain language that directs the trustee to provide a specific monetary amount or percentage of the value of the trust’s assets to a charity after your death or upon the dissolution of the trust.
The specific charity or charities can also be identified.
Trusts are governed by state law, and the rules and procedures regarding the types of disputes that may be brought and the individuals who have to stand to bring a dispute vary among jurisdictions.
Generally, however, a person must prove that they have the standing to bring a challenge against the trust.
The concept of standing is a legal term of art, which means that the individual experienced direct harm or would experience imminent harm if the trust terms were enforced as written.
For example, if Bill creates a trust leaving all of his assets “to all my children, Sue and Betty,” and later has a third child, the third child has the standing to sue the trust on the basis that he or she was not specifically named in the trust provision.
Since the trust clearly indicates that Bill wants to leave his assets to “all” of his children, the third child’s omission would seem to contravene Bill’s intent.
A trust can also be challenged on a technical basis.
Each state has specific rules that must be adhered to when drafting a trust.
For example, most states require the settlor of the trust (the person who creates it) to be at least 18 years of age when the trust is created.
Additionally, a trust may be challenged because fraud was involved in its creation or the execution of its provisions.
For example, if the trust settlor was under duress when he or she executed the trust, which involves physical force or a threat of physical force, the terms of the trust can be challenged.
If the trust was set up to result in the performance of an illegal act, like money laundering, the trust could be challenged on the basis that there is fraud in the execution of its provisions.
There are additional bases for challenging a trust, and it is important to check with your local state provisions before pursuing a potential claim.
Legal guardianship is a legally recognized status typically used when an individual can no longer make sound or safe decisions regarding the care of his or her person or property or has become exposed or susceptible to undue influence and fraud.
A legal guardianship essentially involves removing an individual’s legal rights, so great care and attention is paid during the appointment process.
To appoint a guardian, an individual must make an application to the court that provides a detailed and thorough explanation of the events or concerns necessitating a guardian’s appointment.
Typically, most states require that the individual seeking the appointment of a legal guardian provide sufficient notice to all individuals affected by the proceeding, in addition to providing the individual in question with independent legal counsel.
The law also usually requires a heightened standard of proof, clear and convincing evidence, of the individual’s lack of capacity and provides the individual in question with the right to a jury trial.
After the court appoints a legal guardian, they will have many responsibilities when it comes to the individual’s care and well-being.
The legal guardian will consent to and oversee any medical treatment that the individual receives and determine the individual’s location of residence.
The guardian can make end-of-life decisions on behalf of the individual and have the authority to make financial decisions and determine when it is appropriate to release the individual’s private information.
Due to the broad scope of authority that a legal guardian receives, it is imperative to take great care when pursuing a legal guardian’s appointment.
Whenever a significant life event occurs, you may need to update your will or trust and review your Estate Plan.
A few scenarios exist, including buying a home, starting a business, the birth of children or grandchildren, getting a divorce, diagnosis with a serious medical condition, or even receiving a significant inheritance.
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Solid Estate Planning can bring peace of mind to you and your loved ones. By having an estate plan in place, you have decided what will happen to your assets. You ultimately are protecting not only your estate but also your family.
THE LEXWERX LAW FIRM, LLC, of Tampa, Florida, will guide you through why we are the right choice to act as your Estate Planning Counsel. In fact, we provide custom solutions based on your specific needs and corporate dynamics. We serve the greater Tampa/St. Petersburg, Florida area.
To schedule a 30-minute or 60-minute Initial Consultation, call us at 813-519-4339, or tap the Appointment icon at the top of the page.