There are various forms of guardianship recognized in the State of Florida.  An involuntary guardianship generally arises when another individual petitions the court for permission to handle your affairs.  A voluntary guardianship occurs when you authorize another person to be responsible for your affairs and it can be revoked by filing a petition with the court.  Plenary guardianship is defined as a full guardianship over you and your finances.  A guardianship can also be limited in nature, meaning that the guardian only has certain rights.  Guardianship proceedings are very complex and have many requirements that must be fulfilled in order to comply with the rules governing guardianships in Florida.

Yes.  These documents are typically designated as “Advanced Directives” because they state your wishes in regards to many different aspects of your life in the event you are unable to make those decisions yourself.  A living will directs hospitals and doctors to remove you from machines that are artificially prolonging your life if you have been deemed in a persistent vegetative state, an end-stage condition, or a terminal condition.  It is important to note that you should also have a Do Not Resuscitate (DNR) order that states the same instructions as your living will because first responders, such as paramedics, deal with DNRs, not living wills.  Without a living will, your family and friends may not be able to carry out your wishes in terminating artificial life support.

A durable power of attorney is a crucial document and you should pick your agent very carefully.  A durable power of attorney is an instrument by which you can empower another individual to act on your behalf.  A durable power of attorney can survive your incapacity or incompetency and can be effective either immediately or it can become effective only when you become incapacitated or incompetent.  Under Florida law, a durable power of attorney is effective until it is revoked.

Although a durable power of attorney can contain language authorizing the agent to make healthcare decisions for you, Florida law has created a healthcare surrogate designation to specifically deal with healthcare authority.  The healthcare surrogate designation allows you to name the individual(s) you want to make healthcare decisions for you in the unfortunate event that you are unable to make them for yourself.  A designation of a preneed guardian permits you to name an individual that you would like appointed as your guardian if you were to ever need a guardian.  Naming a preneed guardian can be important because a guardian can have control over both you and your finances and if you do not name who you wish to serve as your guardian, the court will appoint an individual to serve as your guardian.

A special needs trust is a specific type of trust that is drafted in order to protect the beneficiary’s government benefits, such as Medicaid.  Under the special needs trust provisions, the trustee can only distribute money to the beneficiary to help supplement and not supplant governmental benefits and entitlements to ensure that the beneficiary won’t lose his or her ability to obtain benefits.  Essentially, the money from the trust cannot be used for anything except to supplement government benefits or the beneficiary would be at risk for losing the governmental benefits.

A land trust is a trust that is created to hold ownership of your real estate in a way that protects your privacy.  The owner of the property is not known to the public because only the trustee of the trust is identified in public records.  As the confidential owner of the real property, you may be able to avoid certain liens and lawsuits because it is difficult for other individuals or agencies to find out who is the actual owner of the particular property.  This type of privacy would not necessarily be available if you were to hold real estate in a corporate form or in a limited liability company as the owners of these types of business structures are known to the public.  For the purposes of estate planning, a land trust is also beneficial because probate can be avoided on the specific property held in the land trust.

Most people do not realize that the death benefit proceeds on the life insurance you own are subject to estate tax upon your death.  For example, suppose a father owns a $1,000,000 life insurance policy and subsequently dies, his gross estate must include the $1,000,000 for estate tax purposes.  If the highest current estate tax rate is 45% then $450,000 would have to be paid in estate taxes to the federal government.  The father’s wife and children would only receive $550,000 of the entire death benefit due to the taxation of the life insurance death benefit.  One way to remedy this problem is to create a properly executed Irrevocable Life Insurance Trust (ILIT).  An ILIT is an irrevocable trust that allows you to remove the death benefits from your gross estate upon your death by removing any incidents of ownership you may have over your life insurance policies.  The ILIT holds your life insurance policies as the owner and a trustee is appointed to pay the premiums.  There are specific gift tax issues and waiting period requirements that must be addressed prior to the creation of an ILIT and you should contact our firm to discuss your particular situation.

Revocable and irrevocable trusts are some of the most common trusts used in the field of estate planning .  Both trusts can be either funded or unfunded to meet the specific needs of you and your family members.  A revocable trust or living trust can be created for the purposes of avoiding probate, acting as a pourover trust when you die, and can facilitate the handling of your assets in the event of incompetency.  Most revocable trusts can be created so that you, as the grantor, can also act as a trustee and an income beneficiary.  The main advantage of a revocable trust is that current transfers of property made to the trust can be revoked in the future which allows you to retain flexibility over the use of your property.  However, a revocable trust does little to reduce your estate tax burden in the event of your death due to your retained right to revoke transfers to the trust.  Irrevocable trusts are trusts that are created for the purposes of estate tax reduction, asset protection, and charitable estate planning.  Irrevocable trusts are primarily created so that individuals with large taxable estates can remove certain assets from their gross estate thus reducing estate tax liability.  It is important to note that a transfer to this type of trust cannot be revoked in the future by the grantor and you may also be subject to gift taxation on the taxable value of the asset transfer to the irrevocable trust.  Contact our office if you need assistance in determining which type of trust may be more suitable for you and your family.

A trust is essentially a mechanism to hold assets that is managed by a trustee for the benefit of a third party.  Trusts are governed by the terms of the trust agreement, which specifies the properties held, the duties of the trustee and the rights of the beneficiaries.  Trusts can be utilized for a wide variety of purposes, including estate tax reduction, incapacity planning, asset protection, and avoidance of probate.  There are many different types of trusts that can be drafted by your attorney to accommodate your specific requirements.

A will is a document that allows you to direct your estate assets to individuals or organizations upon your death.  Generally, a comprehensive estate plan almost always includes a will.  A will is an important document because without a properly drafted and executed will, the court will determine who will receive your estate assets in accordance with state intestacy laws.   A will can accomplish numerous objectives such as providing for a bequest of specific property, establishing testamentary trusts, appointing guardians for minor children, and providing family income during probate administration.

Generation skipping transfer taxes (GSTT) will apply to transfers made to a “skip party” that are completed during life or at death. A “skip party” is defined as a person who is deemed to be two or more generations below the transferor.  For example,  a grandfather making a lifetime gift to his grandchild or great grandchild could trigger GSTT in addition to federal gift taxes.  If you are considering a transfer to a skip party, you may want to consider using special dynasty trusts to obtain favorable tax benefits by maximizing your GSTT exemption.  The intricacies involved with creating such trusts will require competent legal and financial advice.

The federal gift tax is another wealth transfer tax levied by the IRS on inter vivos or lifetime gifts.  The IRS will impose gift tax on a conveyance that is considered to be a gratuitous and  complete transfer.  Examples of gifts that may be taxable can include cash gifts, gifts of personal property and any other transfer where adequate compensation is not received in return.  There are some exceptions to the general gift taxation requirements such as gifts to spouses, charities, and direct payments to medical providers or educational institutions for the benefit of another.  The Internal Revenue Code provides for an annual gift tax exclusion for individuals and married couples of present interest gifts to an unlimited number of donees.  This ultimately allows you to transfer up to the previously mentioned exclusion amount annually to each donee without paying any federal gift tax.  If you plan on gifting amounts in excess of the individual annual exclusion amount to any one donee, then a federal gift tax return will have to be filed with the IRS.  A cumulative lifetime gift tax credit is available to individuals to help offset gift tax liability; however, it is important to note that your cumulative adjusted taxable gifts (post 1976) will be added to your taxable estate in calculating your potential estate tax liability.  Gift taxation can become very complicated depending upon the specific structure of the transfer and you should contact your CPA to discuss your gift tax situation.

The federal estate tax is a wealth transfer tax that is imposed by the IRS upon the death of an individual.  In addition, certain states also levy an estate tax upon the death of a taxpayer.  It is difficult to state with certainty whether or not your estate will be subject to estate tax upon your death.  There are a wide variety of factors that will affect whether or not your estate will be subject to federal estate tax such as the current exclusion amount, valuation of your gross estate, available deductions, and applicable tax rates.  Many people are surprised to find out that the IRS includes all of their assets in their gross estate at fair market value.  All of your assets including your business, home, cars, investments, retirement accounts, real estate, and even the death benefit on your life insurance policy can be included in your gross estate.  Proper estate planning can help reduce estate taxes so that you are able to pass on more of your assets to your heirs rather than to the government.  The threshold exclusion amount for which a federal estate tax return will be required can change periodically; therefore, you should contact our attorney to discuss your potential estate tax liability.  Our attorney can work closely with your CPA and/or CFP to incorporate estate tax reduction strategies into your comprehensive estate plan.

Probate is the legal court process in which the state governs the collection, administration, and distribution of your estate assets at your death.  Distribution of your probate assets will pass either through your will and/or state intestacy laws.  Normally, a personal representative is predetermined or appointed to supervise and manage the probate process.  Many estate planning professionals advise their clients to avoid probate because the probate process can be costly, lengthy, and all probate proceedings and documents are open to the public.  Probate can be avoided by the use of will substitutes and funded trusts.

Generally, you may want your estate plan reviewed by an attorney at least every 5 years to ensure that your estate plan is up to date with the current law.  Additionally, life altering events may require you to update or revamp your existing estate plan to reflect these new life changes.  The following events may necessitate an evaluation of your estate plan:  marriage, having children, divorce, death of a spouse or relative,  disability of a spouse or relative, the sale or purchase of a business, sale or purchase of a home, receiving an inheritance or life insurance proceeds, etc.  There are many other events that can trigger the need to evaluate your current estate plan.  Contact our attorney to schedule a review of your estate plan to determine whether changes are necessary.

Estate planning is not just for the rich and wealthy.  Estate planning encompasses a wide variety of components that affect many individuals regardless of their net worth.  Estate planning is not only an effective tool to reduce taxes and preserve your wealth, it also serves to provide protection in the event of incapacity, incompetency or severe disability.  A comprehensive estate plan is a vital element in your long term planning that should not be overlooked.