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Miami Estate Planning Law Blog

Revival trusts available for those hoping to live again

Florida residents who plan on being revived at some point in the future may want what is called a revival trust. It can ensure that there is money and resources available to live on in the event that cryonics proves to be an effective way to beat death. If a person undergoes the cryonics process, his or her body is placed into a bottle called a cryostat.

Prior to going into the bottle, water is removed from the body, and this is done to protect the body at the cellular level. The process can cost anywhere from $28,000 to $200,000, and the cost of creating a trust can be anywhere from $5,000 to $15,000. In addition to the cost, it may be a good idea for an individual to consider potential legal challenges from surviving family members. There could also be unique tax issues to consider as well.

Protecting adult children from themselves

Parents in Florida looking to provide financial peace of mind for their children sometimes set up an irrevocable trust with the assumption that the funds will be used responsibly by the time they are accessible. Unfortunately, this is not always the case. It's not unusual for a trust holder to become frustrated with an adult child with no real ambition to seek meaningful employment due to the anticipation of a trust fund "kicking in" when they reach a certain age.

At one time, it was conventional wisdom for estate planners to suggest irrevocable trusts. Even though economic and societal circumstances have changed, irrevocable trusts can be difficult or nearly impossible to alter. But this is now changing since many states have added "decanting" statutes that allow trust holders to fix a broken irrevocable trust. What's sometimes referred to as a "do-over trust" allows a trust holder to transfer assets from an existing irrevocable trust to one with more suitable provisions.

The role of revocable trusts in estate planning

When it comes time to begin the estate planning process in Florida, there are many options to consider. A will, power of attorney and medical directives are just some of the common instruments that may be part of a comprehensive estate plan. Another possibility is what's termed a revocable trust, which allows the person who creates the trust (grantor) to alter or cancel provisions.

Revocable trusts live on indefinitely following the grantor's death, at which point they become irrevocable. However, successor trustees and designated beneficiaries can be named in advance. One of the biggest benefits associated with a revocable trust is the ability to avoid probate. By avoiding probate, the grantor can add significant savings for surviving family members. Probate makes an estate's details public record, so a revocable trust can also eliminate this necessity and maintain privacy for a family.

What are the duties of an estate administrator?

If you have recently lost a close friend or loved one, you may have been named the administrator of the estate. Although you may be going through an array of different emotions at losing a loved one, estate administrators are responsible for tying up the estate’s loose ends and ensuring the property included in the last will and testament is property distributed to the heirs to which they were intended. There are many responsibilities associated with becoming an estate administrator. It is critical that you are aware of these tasks so that you can perform your duties to the best of your ability.

As the estate administrator, you may have to take the estate through the probate process. First, you will obtain all necessary documents, including the last will and testament and death certificate. You must then contact certain entities, such as life insurance companies and creditors, to inform them of the death. In addition, you must gather up the property and assets associated with the estate and determine the value. Once the value of the property is measured, you must pay any debts owed out of the value of the estate. For example, property taxes, federal taxes and loans may be resolved by paying out from the estate. Once the property is clear, you can locate the beneficiaries and distribute the property to them as directed in the will. During this process, it is important that you protect all property from theft and vandalism.

Are life insurance benefits taxable?

When creating an estate plan, it is important to think of ways you can pass on your inheritance without having to pay a host of taxes on your assets and possessions. Once you pass on, all of the things you have worked hard to amass, including your life insurance benefits, are distributed to the beneficiaries that are named in your last will and testament. There are however, ways that taxes can affect the overall amount of the life insurance policy and what is left to distribute to beneficiaries.  

First, it may be beneficial to leave your life insurance policy to an actual beneficiary rather than list it as ‘payable to my estate.’ If the name of a beneficiary is not listed, the life insurance policy may become eligible to go through the probate process along with other parts of the estate. Furthermore, if you make the policy part of the estate, it increases the estate’s total value and causes even higher estate taxes. While your beneficiary will not have to pay federal taxes on the life insurance policy earnings they receive, they may have to pay the additional estate taxes if the policies is included in the estate.

Estate planning as a small business owner

Estate plans are important for a number of reasons, such as protecting the way in which one’s assets are split up among those they love and finding some peace of mind in knowing that these matters will be handled properly in the future. Everyone is in a different position when it comes to estate planning, whether someone has a vast amount of wealth or a relatively modest income, has a large family or is unmarried with no children, etc. Moreover, those who run a small business have additional issues to take into consideration.

Small business owners have to consider a plethora of factors when creating an estate plan. For example, they may need to focus on how their business will be passed on to those they love, and how this decision could impact the future success of a business they have worked so hard to develop. From disagreement within the family to an inability to successfully run the business due to inexperience, there are a number of potential hurdles to consider when it comes to your business.

Why unmarried couples need an estate plan

It may be important for unmarried couples in Florida who live together to create estate plans to ensure that they have certain rights that are granted automatically to married people. First, each person should have a health care power of attorney that authorizes the other person to make medical decisions. This reduces the likelihood of a battle with family members for this authority if one person falls ill.

Another error commonly made by unmarried couples is sharing a home when only one person is on the title. Even if both have paid for the mortgage, if there is no mechanism in place to transfer the home to the other person, such as a will or joint tenancy with rights of survivorship, the other person could be forced to move on the owner's death. This might be the case with all assets if a person has not prepared a will or a trust. With no estate plan, the state will distribute assets to next of kin, and the unmarried partner would be left out entirely.

Why everyone should have an estate plan

Individuals in Florida and throughout the country could benefit from having an estate plan. This is true even if they have few assets and no children. According to the American Association of Retired Persons (AARP), 78 percent of millennials don't have a will or other common estate plan documents. A living trust can be helpful in the event that an individual is unable to communicate his or her wishes.

A power of attorney may also make it easier for a person to retain control over assets or health care decisions while incapacitated for any reason. An estate plan can help a person structure gifts in an orderly manner without necessarily having to pay transfer taxes. In 2019, an individual can make gifts of up to $15,000 without triggering a taxable event. The amount is $30,000 for married couples. Without a will, the state may determine what happens to a person's assets.

The necessity of estate planning

It's a prevalent belief that estate planning is only necessary for the wealthy. However, the truth is that money and other assets, regardless of how much they are worth, can be subject to court costs and fees if the owner died without completing certain estate plan documents. Florida residents should strongly consider creating an estate plan, even if they are not wealthy.

Estate planning entails completing legal documents and tasks to ensure that the wishes of an individual are honored if they become incapacitated or die. This includes having a healthcare directive, will, life insurance policies and more. It also means designating trusted family members or friends as guardians for minor children and determining who will receive any cash left behind by the decedent. Without an effective estate plan in place, the surviving loved ones of a decedent could find it difficult to complete simple housekeeping tasks that may be necessary after a death, such as paying off credit cards of the decedent or selling the decedents' vehicle.

What are Florida's death taxes?

Whether you are a lifelong resident of Florida or you wish to make the Sunshine State your new home post retirement, it is important that you understand the various taxes your estate beneficiaries will have to pay upon your passing. Fortunately, there is not much to understand, as Florida does not levy estate taxes, or many taxes for that matter.

Estate taxes, or death taxes, are taxes imposed by the government on the estates of recently deceased persons. In states that do have estate taxes, the tax only kicks in on estates worth a certain amount, which vary from city to city. According to Smart Asset, Florida is one of 38 states that does not levy estate taxes. This is true regardless of an estate's size. The state abolished these taxes in 2004.

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