Estate Planning Tips

ESTATE PLANNING TIPS

People often ask me for quick tips on Estate Planning. Being an Estate Planning Lawyer and a Probate Lawyer gives me an advantage when drafting Estate Planning documents because I know what mistakes people usually make and what pitfalls to avoid. Here is a very concise list of some quick tips.

1    ACCOUNT BENEFICIARY DESIGNATIONS: This is probably one of the most overlooked issues in Estate Planning, which leads to a Summary Administration or Formal Administration probate.  I cannot tell you how many times a client has come into my office with no access to their deceased spouse’s checking account because it is frozen with the bank. The checking account being frozen could have easily been avoided by simply placing a beneficiary on the account while the owner is still alive. When the owner of the checking account passes away, the account then passes directly to the designated beneficiary without the need for a Probate Lawyer to open an Administration with the court; and for lack of better words “unfreeze” the bank account. Placing a beneficiary on the account allows the designated beneficiary to get quick access to the funds and start paying necessary expenses. This does not only apply to checking accounts but also savings accounts, money market accounts, life insurance policies, etc. It is also wise to put a contingent beneficiary on your accounts in the case that the primary beneficiary becomes deceased.

2.     LADY BIRD DEED:  What is a Lady Bird Deed? A Lady Bird Deed is also known as an Enhanced Life Estate Deed.  These types of deeds are very popular in the state of Florida for a variety of reasons. In certain situations, these types of deeds can be an effective tool to have your Florida real property avoid probate.  Like placing a beneficiary on your checking account, a Lady Bird Deed basically places a designated beneficiary on your real property; thus, avoiding probate. A Lady Bird Deed does not become effective until the death of the property owner of the deed. This means that the property owner possesses all of their rights to the property during his or her lifetime. Also, during the property owner's lifetime, he or she can exercise their rights to sell the property at any time or choose a different person(s) to receive their property at death. 

REVOCABLE TRUSTS: What is a Revocable Trust? A Revocable Trust, also known as a Living Trust, is a legal document created by a “Grantor” (you).  The Revocable Trust is essentially a legal agreement to manage the Grantor’s assets during his or her lifetime and then distribute the remaining assets to designated beneficiaries after you pass away. The person that has a fiduciary responsibility for the management of the trust assets is called the “Trustee” (usually a trusted family member or Trust Company).  Since, the trust is “Revocable” you may amend, modify or even terminate the Revocable Trust during your lifetime. Assets, such as checking accounts, savings accounts, real property, life insurance and investments, must be legally transferred, also known as “funded”, into the Revocable Trust before your death. The assets must be funded into the Revocable Trust to insure that the assets will maximize the Trust’s benefits.

Why is a Revocable Trust beneficial? There are many factors that go into play when deciding if a Revocable Trust is beneficial for you. Your attorney can help you decide if one may be beneficial for your circumstances. One example of when a Revocable Trust would be more beneficial than simply placing beneficiaries on a checking account, would be if you intended to leave different percentages of inheritances to your family. For example, you want to leave 25% to your son, 25% to your daughter and then 10% to each of your five grandchildren. A Revocable Trust would be more efficient at leaving your assets to your family in a circumstance like this (which is not uncommon).