Florida Trust & Probate Attorneys Blog
______ #1. Trust Funding. After we signed your trust, we reviewed the funding of your trust and I gave you detailed Funding Notes. Have you followed up on these instructions? Funding is simply the transfer of your assets into your trust. It is a good idea to annually review the funding of your trust. It is also advisable to annually sign a new assignment of assets into your trust, that will help sweep into the trust assets acquired to date.
______#2. Successor Trustee. This is the person you have appointed to step into your legal shoes if you become incapacitated – in other words, one of the most important decisions you can make. Who have you appointed to take charge if you are incapacitated? What is the order of succession of trustees who will take over management of your financial affairs if you are unable to do so? If you have any question whatsoever about your order of succession, please call the office.
______#3. Transitions. Has there been a marriage, divorce, or separation of anyone named in your will or trust? Has there been a birth or adoption of a child or grandchild? If so, your estate plan may need to be amended.
______#4. Asset Protection. The recession may be over, but will your business survive the recovery? Do you know which assets you own that are protected and which are exposed? NOTE: While a living revocable trust helps avoid probate and keep legal control in your family, it does not protect your assets. We have a number of other legal tools to help make you an unattractive target for a lawsuit. If we have not done a recent asset protection analysis, now may be a good time to do so.
_____ #5. Life Insurance. When is the last time your checked (a) the owner of your life insurance policies; and (b) the beneficiary designations for those policies? Most life insurance either should be owned by an irrevocable life insurance trust or name your trust as the primary beneficiary. Why? If the policy is owned by a life insurance trust that is properly maintained, you protect the full value of the policy by avoiding estate taxation if you have a taxable estate. If the policy does not name your trust as a beneficiary, all the instructions in your trust to safely manage that money will be useless.
______#6. Corporate Minutes. If you have an incorporated business, when is the last time that you filed corporate minutes? It is important, at the least, to keep annual minutes. Remember, the corporate veil can be pierced and your personal assets attacked if you do not follow the corporate formalities. We will review your corporate minutes at no charge; if the record needs to be updated, we will advise you of the total cost to bring the record current.
______#7. $13,000 Gift Allowance. Do you wish to consider making gifts to family members to reduce your estate tax exposure? Current law allows you to make gifts of $13,000 per person per year ($26,000 if married) with little or no tax consequence to you or the recipient. For many persons, this is an effective tool to reduce your estate tax liability. However, see the warning in Point #8 for gifts to minors. NOTE: Gifting must be done prior to January 1; preferably November or early December.
______#8. Gifting To Minors. Beware of UGMA accounts! The full name is Uniform Gift to Minors Act. Unless your child is a future Warren Buffet, it is not advisable to give minors any substantial gifts without placing those funds in a trust. UGMA accounts should be used for only small amounts – such as $1,000 or less. Otherwise, the minor can have complete access to the funds when he or she turns 21.
______#9. Estate Tax Check. Do you know your current estate tax exposure? Absent congressional action the exemption will fall back to $1 million per person with a top rate at 55% on January 1, 2011. Following the Republican mid-term election successes, Congress may act to change the estate tax law. Stay tuned – we will be sending out an Alert via e-mail if Congress does so act. Note: If you have a trust with a Marital and Family Trust (technically called a credit shelter trust) and we have not recently reviewed your estate plan, we should run the numbers to see if the funding formula in the trust allocates the exemption to achieve appropriate tax planning for your family.
______#10. Health Care Surrogate. If you have a child over 18 who is now in college it is highly recommended that he/she give you legal authority to make medical decisions on their behalf. Remember, once your child turns 18, he/she is sui juris, and you have no legal authority to make any legal decision on their behalf. Also note, if we have not met to review your estate plan since 2004, it is likely that your health care surrogate is not current.
______#11. Estate Plan Review. Has it been more than two years since we sat down and reviewed your estate plan? If so, I recommend we schedule a meeting before the end of the year to assess whether it continues to meet all the needs of your family.
APPOINTMENT:
To schedule an appointment to review or update your estate plan or the funding of your trust, call Rarick & Associates at (305) 556-5209 or email Phil at prarick@raricklaw.com.