At the Law Offices of Frye & Vazquez, P.L., there are a few strategies that we do not recommend when planning an estate. These strategies — specifically, pay-on-death accounts, joint ownership of assets and beneficiary designations — can expose an estate to a variety of problems, including the following:
- Otherwise avoidable tax liabilities
- Unnecessary exposure to creditors
- Disputes between joint owners
- Problems with homestead exemption
- Difficulties in distributing assets to beneficiaries
- Lack of beneficiary protection otherwise afforded by a trust
Rather than using these often unreliable strategies, estate planners in Miami should consider creating and funding a living trust.
If a person has only a will and not a living trust, then the estate will enter probate, which is a court-managed, time-consuming and costly process. Creating and funding a revocable, living trust can let the estate avoid probate, as well as result in the immediate transfer of assets out of the estate and into the trust after death.
Probating an estate is also a public process, so using a living trust typically gives the family more privacy.
When you create a living trust, you designate a successor trustee. You can also keep complete control of the trust assets because, with a living trust, you are the trustee and beneficiary during your lifetime. Because a living trust is revocable, you have the option of altering its terms or terminating it.
Essentially, a living trust works to preserve assets for you and your beneficiaries, while allowing you access and control over the funds during your lifetime.
For more on strategies that we recommend for our clients, please see the Law Offices of Frye & Vazquez’ estate planning overview.