As a 17 year resident of Weston with a family of three children, Weston estate planning attorney Phil Rarick knows the challenges of running a small business and raising a family in a risky environment where one lawsuit can ruin a life of savings. A big theme of our practice as Weston estate planning attorneys is keeping you and your business out of court. This requires strategic planning now – not when the threat of litigation arises because by then it may be too late.
Unlike some estate planning attorneys, we believe good estate planning usually integrates asset protection with your estate plan. Estate planning without considering asset protection is like planning with blinders on: likely you will see only a narrow part of the landscape and only accomplish part of your objectives to protect your family. As Weston estate planning attorneys we want to help you see the full picture and see all your viable options.
5 Key Estate Planning ObjectivesGood estate planning needs to be integrated with asset protection to accomplish the following five key objectives:
Protect your exposed assets. Florida has strong laws to protect major investments such as your home, 401K, or IRA. However, rental properties or equity investments are likely exposed to creditors. The good news is you can take advantage of strong Florida laws and laws of other states (like Delaware and Nevada) to help protect these investments.
Protect the life style of your children – in good times and bad. Of course, young children need the most protection. However, adult children in their 20’s are often poor money managers, get into bad marriages, and make bad decisions. Good estate planning can help avoid poor money management decisions by naming a trusted advisor who can make such decisions until the adult child reaches a certain age or has matured and become a good money manager.
Help ensure that your children receive a quality post-high school education. This objective requires naming a person in whom you have complete trust to manage your child’s financial affairs if you die or become mentally incapacitated.
Avoid Court Intervention in event of a mental incapacity or death. This means having a succession plan if you suffer a temporary or permanent mental incapacity. Such a plan may be obvious for a single person. However, many married people think their spouse can automatically step in and make legal decisions. Contrary to popular belief, there is no law that allows this because there is no such thing as a perfect marriage. You need to give your spouse strong legal authority to make financial and medical decisions. You should also have at least two backups in the case of an accident that renders you and your spouse mentally unable to act.
Minimize taxes. Many people are now under the estate tax exemption ($5.5 million for U.S. citizens in 2018) but income tax planning has now become important to minimize income taxes for anyone with real estate investments or securities. However, anyone close to the estate tax exemption needs to plan carefully as the estate tax is 40% over the exemption.
To accomplish the objectives discussed above, you will likely need the following four basic estate planning instruments:
Living Revocable Trust. A trust is a simply detailed, legally binding instructions to make sure every dime of your hard earned money is used first for your needs. Upon your death, it is designed to give what you have, the way you want, when you want – at the least possible cost by avoiding probate. See our booklet, Understanding Living Trusts.
Health Care Surrogate. It is important that you have a strong legal instrument to cut through hospital and health insurance bureaucracy. To accomplish this you need a very strong health care surrogate that takes full advantage of Florida law.
Durable Power of Attorney. The DPA is like a Swiss Armey knife: It can help resolve legal issues that you may not be able to accomplish with a living trust. Florida amended its DPA laws in 2012. If you have a DPA drafted prior to 2012, it most likely needs to be updated. See What is a Durable Power of Attorney – And Why It Is So Important
Pour-Over Will. This is a simple will that acts like a safety net to make sure all assets outside our trust are “poured” into you living trust. Note: assets controlled by the Pour-Over Will must go through the probate process.