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Miami Estate Planning Law Blog

What is a charitable trust?

If you are a Florida resident for whom charitable giving is a way of life, you may wish to consider setting up a charitable trust so that you can substantially contribute to your favorite charity. You may not be aware that your charitable trust can be structured so that the assets you place in the trust can be split between the charity and someone you choose as your non-charitable beneficiary. That person may even be yourself.

Fidelity Investments explains that you have two choices for a charitable trust: a charitable lead trust and a charitable remainder trust. Both types give you a good deal of control over and flexibility with your contributed assets. Both types also can help you achieve your goals, not only for philanthropy, but also for tax management and estate planning. The type(s) of assets you wish to place in the trust, plus your targeted wealth preservation and estate planning goals will determine which kind of charitable trust you should choose.

Reviewing a ward's retained rights

Many Miami residents have come us here at The Law Offices of Frye & Vazquez, P.L. after having had a loved one committed to a guardianship convinced that those parties will become the targets of financial exploitation and abuse. If you share this same concern, your fears likely rise from the assumption that when one is determined to be incapacitated, all of his or her rights and decision-making powers are essentially revoked. Yet even when one becomes the ward of a guardian, he or she does still retain basic freedoms. 

Those freedoms can be found in Section 744.3215(1) of the Florida's state statutes. One of the most basic is the right to remain as independent as possible, including the freedom to choose where and how he or she lives (insofar as it it reasonable). Your loved one will also retain his or her right to privacy as well as to continue to communicate and receive visits from you and other family members and friends. He or she also has the right to counsel independent of his or her guardian and to have access to the courts. Your loved one must also be notified any pending proceedings or rulings in relation to his or her determination of capacity. 

Identifying common estate tax audit triggers

If there is a common concern that the many clients that we here at The Law Offices of Frye & Vazquez, P.L. have helped to prepare estate tax returns in Miami share, it is the fear of being audited. You know how stressful if can be to prepare your own individual income tax returns every year. Imagine the added pressure that can come with the Internal Revenue Service asking you to justify what you file. Your annual income may not approach the minimum estate tax return filing threshold ($5.49 million for 2017), so your concerns over having to provide a detailed account of all of those assets is certainly justified. 

They may also be well-founded. According to information shared by the IRS, 1.2 million individual tax returns for 2015 were audited. The auditing process is not necessarily a bad thing, but it may require a lot of extra work on your part. Your best bet, then, may be to do all that you can to avoid it altogether. Doing so requires understanding common estate tax audit triggers. 

What happens if you die without a will?

If you are a Florida resident who has not yet made a will, you probably will be shocked to discover that the state of Florida has made one for you – sort of. The Florida Bar explains that if you die without having made a will, you are considered to have died intestate and your probate assets will be distributed according to Florida law.

Florida defines probate assets as those things that you own in your name only at the time of your death. Probate assets also can be things you own with someone else, such as a bank account or vehicle, but which lack a provision for the automatic transfer to that person when you die.

How can I keep my loved ones from fighting over my estate?

Like other Miami residents, you only want the best for your loved ones. This includes preserving family harmony after you have passed on. It is only natural to hope the future generations of your family will get along and be close long after you are gone.

Sadly, many families are torn apart due to arguments over the estate. It is hard to believe that family members can become bitter toward each other when they cannot agree who gets the jewelry, vehicles, vacation homes and cash, but it does happen. Is there anything you can do to prevent your children and grandchildren from becoming estranged over a will dispute? The following tips, provided by AARP, might help you avert fighting among your loved ones.

  • Hold a family meeting with your heirs and discuss the main points of your estate plan with them. Involve them in deciding how to divide cherished heirlooms and other property.
  • Divide your estate equally, regardless of whether some of your children are more well-off than others. Giving one person more than another could be seen as favoritism and invite discord, even if your intentions are merely to help a child who is struggling.
  • Discuss your reasons for naming your executor. You might pick the eldest child to handle your will, or a child who has shown exemplary financial and decision-making skills. Give each family member a different responsibility so nobody feels left out.

Late singer's sons feud over family trust

Ask anyone in Miami that is currently involved in his or her own estate planning, and he or she will likely say that the main motivation for doing so is to avoid the potential for disputes arising between his or her beneficiaries. Yet oftentimes, people that have interest in an estate may easily believe that the actions of others who are also party to it may have a negative impact on said interest. The hope is that when such disputes arise, beneficiaries can sit down with each other (or the trustees or executors involved in their cases) and work things out amicably. Sadly, that does not always happen. 

It certainly does not appear to happening in the dispute currently going on between the children of the late signing icon Frank Zappa. One of his sons (who, with his sister, operate the family's trust) recently released a public statement highlighting the feud playing out between him and his brother. In his statement, he said the issues that his brother has with the trust were stipulations decided upon by their late parents. He went on to question the validity of the legal action has brother has initiated against the trust and the motives he has in reaching out through an online campaign to help raise money for his legal costs. 

Reviewing the validity of no contest clauses

For those beginning the estate planning process in Miami, the ultimate goal is to create an inheritance plan that reflects their true wishes, while also being able to avoid disputes between their beneficiaries. The said reality is, however, that it is often impossible to please everyone, especially when it comes to estate matters. Thus, will contests can be a common occurrence. 

Some of those preparing their wills may believe that they can eliminate the potential for such a dispute by adding a no contest clause. Such a clause basically says that anyone who choose to contest the terms of a will risks being disinherited. Most may assume that a testator has every right to this; after all, his or her will should be reflection of his or her wishes, not matter what those may be, right? 

Detailing public guardian accountability standards

Like many of those who have elderly loved ones living in Miami, you may agree with the decision to place your aging family member or friend under the care of a guardian. However, the circumstances of your loved one's case may leave him or her as a ward of a public guardian. Many come to us here at The Law Offices of Frye & Vazquez, P.L. after family members or friends have been placed in such a situation. If this describes your case, you likely share their concern regarding what accountability the court places on such a professional. 

You may be pleased to hear that the court recognizes that the best scenario for your incapacitated loved one may be to be in the care of one he or she is familiar with. Thus, according to Section 744.2103(4) of the Florida State Statutes, it requires that the public guardian make substantial efforts to find such a person or party to pass the role on to. That may be you, another family member or friend, or a bank or corporation with which your loved one has established ties. The public guardian must also submit a report detailing his or her efforts in this regard within six months of his or her date of appointment. 

The benefits of a spendthrift trust

Say you have assets that you want to leave to your loved ones in Miami, yet you are concerned that their already observed tendencies to be reckless with their spending could potentially get them into trouble. This scenario is the same that has faced many of the clients that we here at The Law Offices of Frye & Vazquez, P.L. have assisted in the past. Even placing your assets in a trust may not completely protect them from your irresponsible beneficiaries (or the creditors that may eventually come after them). That is, of course, only if you do not include the right provisions. 

Florida's Trust Code does indeed allow you to include a spendthrift provision in a trust that you create. Such a provision allows your chosen trustee to have complete authority over how the trust's assets are used to benefit your beneficiaries. With such a trust, the trustee could retain its assets to ensure that your beneficiary has funds to help pay for his or her schooling or buy a home, rather than giving him control to draw from trust assets to buy a brand new Ferrari. The Trust Code does limit spendthrift provisions, however, stating that they must restrain the voluntary and involuntary transfer of a beneficiary's interest. 

Voiding a trustee's transactions

Placing assets into a trust is a terrific way to both avoid the costs of probate and to protect property from potential misuse by beneficiaries. However, many of those in Miami that come to us here at The Law Offices of Frye & Vazquez, P.L. wanting to set up such trusts fail to realize the extent of the power they are giving to a trustee. If you are a beneficiary to a trust, you may feel as though your interests are completely subject to the will of the trustee. This may leave you believing you have little control over what he or she does with the trust's assets. 

Fortunately, that is not the case. The trustee has duty of loyalty to act only in your best interests (as specified by the trust's settlor). Often, it may seem as though those interests (which should also be his or her fiduciary interests) are at odds with those of the trustee. If you believe that has been represented in the from a transaction involving trust assets, Section 736.0802(2) of the Florida Trust Code states that you are able to void such an action. Examples of where a trustee's fiduciary interests may conflict with his or her personal one's include transactions between his or her: 

  • Spouse
  • Descendants, parents, siblings or their spouses
  • Attorney, agent or employee
  • Corporations with which he or she may have a vested interest
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