With the start of a new year, are you thinking about your financial health for 2021 and beyond, including estate planning? In addition to a last will and testament, there are other tools you can use, such as trusts, to protect and transfer assets to loved ones.
A trust can allow one person, often called the “trustor” or “grantor,” to store or transfer assets to someone else, usually called the “beneficiary.” The “trustee” is the person or entity managing the trust assets according to the trustor’s instructions. The trust can contain different assets, such as real property, investment accounts, cash, business interests, and more.
Generally, there are two broad categories of trusts: revocable and irrevocable. A revocable trust can be changed or revoked by the grantor at any time. An irrevocable trust, on the other hand, cannot be altered, amended, or revoked, except under limited circumstances.
Within the broader categories of irrevocable and revocable trust, there are a variety of other types of trusts. There are charitable trusts which allow the grantor to transfer assets to specific charities. There are generation-skipping trusts which allow for the transfer of assets to grandchildren instead of children. Special needs trusts allow for the providing of financial support to beneficiaries with special needs without impacting eligibility for government benefits.
Choosing the right trust for you can depend on the assets you have, how you want to oversee those assets, tax considerations, and other issues. For help finding which type of trust may be beneficial to have in your estate plan, our office is here to assist. Please contact us to schedule an appointment.
Estate Planning Awareness Week, which falls on October 19th to 25th this year, can be a time to review financial wellness and, if you have not done so already, take action to protect yourself, your loved ones, and your assets. Due to the Covid-19 pandemic, now more than ever, individuals are realizing that proper estate planning can be a key priority, no matter their financial circumstances. Are you one of those people who have been reflecting on the importance of estate planning during the pandemic? An estate plan can end up saving you money, reducing stress and confusion during an already difficult time, and giving you and your loved ones peace of mind.
Benefits of Estate Planning
There can be many benefits to having a solid estate plan in place. For example, if you fell ill or passed away, an estate plan could:
Determine who inherits your property, instead of state intestacy laws dictating who gets what;
Designate a trusted person to make financial and property decisions, such as paying bills, purchasing or selling assets, or writing checks if you become incapacitated;
Designate a healthcare surrogate who could make medical decisions on your behalf should you ever become incapacitated and unable to communicate your wishes for yourself;
Document wishes about end of life care, such as whether to receive life support;
Provide access to your email, social media, or other online/digital accounts;
Inform family or loved ones about insurance coverage, such as life, health, long-term care, or others, in case they to file a claim;
Organize accounts and key information so it can be accessible to whomever needs it; and
Provide clarity to family and friends, so your wishes are clear.
Estate Planning Awareness Week during COVID serves as a reminder that preparing, or updating, estate plans can make a difficult crisis easier to manage. Further, many states are making exceptions to rules about witnessing, notarizing, and signing materials. Consider reaching out to our office to learn more.
The new year is an exciting time for many of us. It is a time to establish new goals, choose what we want for the future, and set intentions that will guide us through, not just this year, but many years to come. As a Florida Baby Boomer who is thinking about what you want for yourself and your loved ones, however, does this include considering how you can best be prepared for the future through estate planning?
When we are making resolutions, many of us do not take the time we need to consider whether or not our estate plan reflects what we need right now. In fact, studies tell us that the majority of Americans do not have any estate planning. If you do not have estate planning as a Florida Baby Boomer, there is never a wrong time to create an estate plan. Remember, from when you turn eighteen years of age in Florida forward, no one has the legal authority to make decisions for you.
Estate plans, however, are not static documents. Your needs, and the needs of your family members, may change significantly over time. For example, you may have named your adult child who resides near you to be the primary decision-maker under your durable power of attorney. As time passed, though, this child who you were relying on to make responsible decisions for you may now face serious issues such as bankruptcy or disability. By contrast, your children may have gotten married and have children of their own, and you may need to change your estate plan to ensure you are leaving a legacy for future generations.
Further, your estate plan may not contemplate the aging process and a potential, future need for long-term care support. Most estate planning does not contemplate this potential issue. As a Florida Baby Boomer, however, you need for your estate plan to be able to work with any potential long-term care needs you may have in the future.
In addition to changes in your life, there may be changes to the estate planning laws as well. The laws that govern your estate plan are subject to change and this is just one of the reasons why you need to stay in communication with your attorney. For example, could new law changes impact the tax structure for your estate plan? Could there be changes that will allow less flexibility for your children to make your decisions, when needed, in the future? Are there significant elder care challenges that you need to plan for now?
These are just a few of the reasons why you want to consider scheduling a meeting with your estate planning attorney at the start of the year. Be sure to discuss with your estate planning attorney what his or her comfort level is when it comes to not only planning for your legacy, but also the long-term care challenges. Unfortunately, as we age, estate planning alone is not enough. We need an elder care plan to address long term care issues and help us plan forward to ensure we are protected. We encourage you to contact us to discuss these questions, and any others that you have, at your earliest convenience.
We often find that adult children and their aging parents will come to our office and present to us, their newly recommended estate planning attorney, a last will and testament that is at least twenty years old. This estate planning document nominates a brother or a sister as a guardian for the minor children. It also provides for the assets to be distributed on death to a bank trust company that is to retain the assets in trust until the children have attained age 21.
One of the problems with this estate plan, which needs updating, is that the youngest of the children is now age 25 and the eldest is age 35. In addition, the bank nominated in the last will and testament to serve as the trustee is no longer in business. Further, if there was a trust agreement, it was never funded.
In this scenario, we are fortunate that the parents lived these many years and it was not necessary to use the estate plan, or even fund the trust. In situations like this, one of the ways we can help the parents is by drafting a new estate plan that corrects these issues. For example, the new trust agreement could dispense with the need for a guardian of minor children and name a trust company now in existence to serve as the trustee.
The parents, however, have aged to the point that a new estate plan alone is not sufficient for them. The parents need their own updated advanced directives in the event of a disability. Therefore, the parents will also need to consider signing, at a minimum, durable powers of attorney, health care surrogate designations, and living wills.
Further, they need to consider long-term care planning.
An estate plan alone will not be sufficient to help them be able to afford the high cost of long-term care in an assisted living facility with memory care or a skilled nursing home. Medicare is also not able to help with the cost of the daily custodial care. The parents need an estate plan but also an elder care plan that can help them plan for how they will be able to afford long-term care and not lose their lifetime of savings.
We work with parents and adult children each day to tackle this difficult issue.
The key is to not put off this type of planning as time is of the essence. If you have questions on this or any issue, we encourage you to contact us to schedule a meeting.
Whether or not your aging parents live close to you or in another state, such as Florida, there is never a wrong time to discuss their estate planning.
Unfortunately, studies continue to show us that less than fifty percent of all Americans have estate planning in place.
This becomes an increasing concern as your parents age and become increasingly susceptible to age-related health care issues or long-term care concerns.
Despite your concerns, it may be hard for you to start a conversation with your aging parents. We know, based on our experience, that there is never a wrong time to start the discussion. We encourage you to openly speak with your aging parents about what they need to ensure they are protected as much as possible.
Let us share with you nine ways you can begin discussing estate planning with your loved ones today.
1. Ask for all decision makers to be at the meeting with your parents. You want to have a meeting when all involved can be present. Ask your aging parents who they want to be included and make sure these individuals can be in attendance.
2. Set the meeting at a time that interruptions will be limited. This conversation can be difficult to have, and made even more so with frequent interruptions. Decide on a place and time when the necessary parties can not only be in attendance, but will not be pulled away during an important topic.
3. Do not avoid difficult topics. Discussing death and incapacity and a lack of control can be hard for any of us. Simply because it is “hard” to talk about does not mean the topic should be avoided. It may help to create an agenda of what you need to discuss so topics will not be avoided or put off to another time.
4. Discuss everyone’s schedule and availability both now and in the future. A critical part of estate planning is naming a person who will have the legal authority to act for your parents in a crisis. This means that their decision makers will need to be available in a crisis. Talk about this openly together to ensure that everyone can be involved or if changes need to be made.
5. Ask you parents what their goals are. Your parents know better than anyone else what they want. Talk to them about their goals for their legacy, their living situation, the future as it is related to long-term care, and any other issues they wish to discuss. They need to feel supported and that their loved ones will help them achieve their goals.
6. Check in on finances as they are related to long-term care needs. Although it is not estate planning, elder law concerns should also be discussed together. Long-term care can be expensive and, in almost all instances, is not covered by traditional health care insurance or Medicare. Discuss together how you would be able to afford long-term care support, should it become necessary.
7. Know that different states have different laws. Each state in America is different when it comes to estate planning. While there are similarities, the law may not be the same. If your parents have estate planning from a different state, it may be time to update to estate planning documents that reflect Florida laws.
8. Make a list of questions. As we shared before, making a list of questions and topics can ensure that everything is addressed in your meeting together. Write down your questions, your parents’ questions, as well as anyone else who is involved in the meeting, leaving room for new questions that arise as a result of your conversation. Determine what you can answer together and where you will need the help of an experienced attorney.
9. Schedule a meeting with an experienced attorney. Your parents need an experienced estate planning attorney who will be able to support them in creating the plan they need. Do not wait to schedule this meeting and get answers to everyone’s questions. Be sure to determine in advance who will attend this meeting and ascertain from the attorney’s office if adult children may be present in the meeting with their parents’ consent.
We encourage you to ask us your questions about this important topic. We know that this article may raise more questions than it answers and want you to have the support you and your aging parents need. Do not hesitate to reach out to our office and schedule a meeting on this issue or any elder care concerns.