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Miami Estate Planning Law Blog

Do I need a generation-skipping trust?

Even if you are one of the many Florida residents who already has a pretty firm estate plan in place, you may find now a good time to review that plan. As life changes, so too might your estate plan. One of the tools you might want to consider is a generation-skipping trust.

As The Motley Fool explains, a generation-skipping trust may commonly be used by people with high-asset value estates. As its name implies, a GST helps you leave assets for grandchildren or subsequent generations. There are sometimes unique situations when grandchildren may not be considered a skipped generation such as if their parents have already died and the grandchildren would then be considered the first in line as heirs.

Examining the exemption to the prudent investor rule

In the past, this blog has detailed the prudent investor rule as it applies to trustees in Miami. Simply put, it requires that trustees invest trust assets with the right amount of research and judgment one would expect from a reasonable, prudent person. This seemingly puts a lot of pressure on trustees for their investment vehicles to perform well. However, there is one major area of trust management that is exempt from this rule: life insurance.

Information shared by the National Association of Insurance Commissioners shows that in 2015, over $45.3 billion was written in life, accident and health (separate from standard health coverage) premiums in Florida alone. These numbers seem to reveal the importance that people place on having an insurance policy to help cover any expenses associated with their deaths or incapacitation.

Filing an estate tax return extension

As the executor for the estate of a family member or friend in Miami, the one area that may cause you the most trepidation is dealing with the having to pay estate taxes. Those who come to us here at The Law Offices of Frye and Vazquez, P.L. with their tax questions typically want to know two things: First, if their loved one’s estate is even required to pay taxes. If it is, then they typically want to know how long they have to pay them. If a looming estate tax return filing deadline is approaching, you may want to consider asking for an extension in order to have the time needed to collect information to do an accurate tax assessment.

As has been detailed in this blog before, you can indeed ask the Internal Revenue Service for an estate tax extension. According to the IRS website, this must be done within nine months of your loved one’s passing. Submitting an IRS Form 4768 prior to the April 15 tax deadline automatically earns you a six-month extension. Yet what if you have yet to be able to accurately identify all of your family member or friend’s estate assets, and thus have yet to determine if his or her estate meets the federal tax threshold? If you do not anticipate having all of information needed to complete a return within the six-month time period allowed by an extension, you can request to be given additional time.

Senator’s sons and widow square off over validity of his will

Miami residents are encouraged to begin their estate planning early on in their adult lives, and to involve those who may be beneficiaries of their estates in the process, as well. This attempt at transparency may hopefully help to avoid having disputes arise once one is gone. However, as family dynamics change over time, so too can one’s estate plans, much to the chagrin of those who may be negatively impacted by such changes. In such cases, no amount of planning may be able to avoid the legal battles that may arise if and when disillusioned beneficiaries try to claim what they may believe to be theirs.

The sons of a former U.S. Senator from Tennessee are currently involved in a bitter dispute with their father’s widow, claiming that she exercised undue influence over him in order to amend his will shortly before his death in late 2015. His final will named her as the primary beneficiary, with his two sons each receiving $50,000. However, the sons claim that they have evidence from the law firm that handled their father’s will stating the man did not have the needed mental capacity to comprehend the changes made to his will. They are now requesting access to the documentation detailing their father’s estate planning process as well as verification of his assets.

What is a temporary emergency guardianship?

Few in Miami may seriously contemplate the possibility that they could end up in an incapacitated state where they may be unable to make decisions for themselves. This may be the reason why so many may fail to specifically name someone to act in their place should something like that happen. Yet unanticipated events could leave one of your friends or family members needing such representation almost at a moment’s notice. In such an event, you could petition to be named as his or her emergency temporary guardian.

What is a emergency temporary guardianship? According to the Florida state statutes, such authority can be bestowed if a petition for determination of capacity has been commenced for your loved one, yet a permanent guardian has yet to be named. In order for such authority to be granted, the court must first determine that the physical or mental health of your friend or family member is in imminent danger. It may also be bestowed if it is believed that your loved one’s condition places his or her property at risk of being:

  •          Lost
  •          Wasted
  •          Misappropriated

Detailing the probate process in Florida

Many in Miami have likely heard from countless people that they should do what they can to avoid having their estates go to probate. This is due to the fact that the probate process can be time-consuming (sometimes lasting longer than one year), and any expenses associated with it are drawn directly from estate assets. However, many estate cases are still heard in probate courses every year, and for those unfamiliar with the legal guidelines regarding estate administration, the assistance offered by the probate court may end up justifying the expense.

The Florida Bar Association describes the purpose of the probate process as being three-fold:

  • Identifying and gathering all of a decedent’s assets.
  • Paying any debts he or she may have incurred.
  • Distributing assets to his or her beneficiaries.

Protecting your pets through a trust

Many of those who come to us here at The Law Offices of Frye & Vazquez, P.L. inquiring about creating a trust want to do so primarily to ensure that those they love are taken care of. That love may extend to family members, friends, and yes, even pets. Like many in Miami, you may feel a strong bond with your pet, and would likely want to see him or her cared for if you were unable to do so. You could also own animals whose use you profit off of from breeding or entertainment purposes, and would want to protect your investment. In any event, Florida law does allow for the care of animals to be seen to through a trust.

According to the state’s Trust Code, any trusts set up for the care of animals is valid only while you are still alive. For example, were you to become incapacitated, such a trust could allow you to keep your animals from being sold by one appointed as your guardian or given power of attorney. One can be given the power to enforce the trust in one of three ways:

  •          By you naming him or her specifically in the trust instrument.
  •          By a court appointment.
  •          By another party interested in the welfare of animals requesting that one be appointed.

Detailing the process of confirming death

Like most in Miami, you might assume that estate matters deal only with the disbursement of property and assets in accordance to one’s wishes. Typically, those wishes are honored after one has died. Yet, as crazy as it may seem, we at The Law Offices of Frye and Vazquez, P.L. can attest to the fact that part of dealing with an estate is actually proving that a testator is dead. You may consider this to be a simple matter, yet as is the case with any aspect of probate and estate administration, the potential for complications exists.

According to the Florida Probate Code, presenting a copy of your loved one’s death certificate is sufficient to verify his or her death. If you have a family member who is presumed dead (like one lost in an area where finding his or her person or remains is unlikely), a record stating that presumption created by a government agency is enough to officially list him or her as being dead.

Energy company and former CEO’s estate reach settlement agreement

One of the things that Miami residents may forget when engaging in estate planning is how their debts will be dealt with when they are gone. Some may think that creditors’ claims may die with a decedent, yet as long as there are assets in an estate, creditors may lay claim on them as payment for what they are owed. That is why it is recommended that people make an accurate accounting of both their assets and liabilities in their estate planning documents so that their beneficiaries do not feel blindsided when creditors come to collect.

The case of the former CEO of an Oklahoma-based energy company highlights some of the issues that estate representatives may be left to deal with when liabilities are not seen to by a decedent before he or she passes. The man, who died in a car accident last year, had been accused of stealing materials from the company before being fired as its CEO in 2013. It is alleged that he then used that information to start a rival company. The company had been seeking $445 million in damages stemming from the alleged theft, while the man’s estate filed its own claim over unpaid benefits stemming from the man’s separation agreement with the company. Both sides have since agreed to drop their claims pending the approval of a proposed settlement by the probate court.

How long does the probate process take?

One of the main reasons that estate planning experts in Miami recommend that you and your loved ones start addressing end-of-life issues when you are young is to avoid having your estate go to probate. Yet despite these expert recommendations, a good number of estate cases still end going through the state’s probate courts every year. According to information shared by the Florida Office of the State Courts Commissioner, 115,746 cases were filed in the state in 2014-15 fiscal year.

So exactly how long can the probate process take? There may be no easy answer to that question due to the uniqueness of each estate. If, for example, your family member stipulated that you and other beneficiaries were to each receive a certain monetary reward from the estate, yet those funds were planned to come from the sale of property, then you and the other parties must wait until those properties are sold for the estate to be processed and dispersed.

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