David Howard Goldberg, P.L.

Miami Estate Planning Blog

Assets not funded to trusts lead to complications for heirs

Establishing a revocable living trust is a wise move for many in Florida who are planning their estates. Revocable trusts protect assets from taxes and probate and allow heirs to benefit from the assets according to the trustee's directives. However, establishing a trust is only the first step. Assets are not covered by the terms of the trust if the trustee does not fund them to the trust.

It is not unusual for someone to gain and lose assets as time passes. A trustee may purchase a new home, sell a business or trade valuable art or jewelry. Failing to title any new property to the trust after these changes may leave the assets open to probate. This may make things especially complicated for heirs. If, for example, the trustee purchases additional real estate in another state without funding the property to the trust, the heirs will not only have to deal with a prolonged probate, but likely an ancillary probate for the out-of-state property.

Who will hold fiduciary duty in relation to your estate?

As you consider your estate plan, you may realize that you have a number of positions to which you could appoint individuals. These positions can range from executor of your estate to guardian of your children, and you certainly want to make sure that you appoint the right person for each role.

The individuals acting in these roles have what is known as fiduciary duties. This term means that any appointed person must act honestly and in a trustworthy manner while wielding the power he or she receives. If any fiduciary breaches his or her duty, serious consequences could arise.

Wills can be effective estate planning tools

Dealing with matters of estate planning is not a pleasant thing to do, but it can be even more unpleasant for those loved ones left behind to sort out the details of an unprepared estate. Unfortunately, most people in Florida and across the country do not even have simple wills to express their wishes and to name someone to handle the process of closing the estate. A will is an excellent way to organize one's affairs so that loved ones are not left with an additional burden.

A will should include the names of those to whom the testator, who is the writer of the will, wishes to distribute his or her assets. Those assets can include personal belongings but also real estate, securities, stocks and bank accounts. A married couple should have separate wills, not a joint one. That way, each spouse can address his or her personal circumstances, such as children from previous relationships, separate assets and individual intentions toward specific causes.

Why do I need to make an estate plan?

There are many reasons to avoid creating an estate plan. It is time consuming. You may prefer to spend your money on other things. There is also the unavoidable need to think seriously about your last days and the eventualities that may accompany them. Nevertheless, an estate plan is critical for many reasons -- even if you believe your estate is not big enough to take the trouble.

You may be hearing people around you discussing their estate plans. Even TV commercials remind you of the importance of preparing your estate and your loved ones for the end of your life. No, it is not the most pleasant thing to talk about, but the topic keeps coming up, and you may be ready to explore the options.

Pet trusts are a loving legacy

The thought of losing a beloved pet is almost too difficult for most people to bear. However, few pet owners consider what may happen if their animal companions should outlive them. Countless pets end up in shelters and worse when their owners pass away without establishing a plan for the care of their pets. Fortunately, thorough estate plans can include trusts to provide for surviving pets.

Florida and most other states consider pets in the same category as property. As painful as it may be for animal lovers, a pet has the same legal status as a sofa or a lamp, so a pet parent cannot leave money to a pet in a will. It is also not wise to leave a pet to a friend or family member in a will because there is nothing to legally bind that person to caring for the pet as the owner desires.

Removing a trustee may require trust litigation

The establishment of a trust is a complex step in the estate planning process. Because a trust goes beyond simply distributing assets after its creator trustee dies, there may be numerous legal elements at play, including tax ramifications and the trust's effect on government benefits. When a Florida trust creator names a successor trustee, the creator gives that person the legal authority to manage the assets according to the terms of the trust. However, if the beneficiaries of a trust are not happy with the successor trustee, it may lead to trust litigation.

It is possible for the beneficiaries of a trust to petition the court to remove or replace the trustee. However, this is not something the courts are happy to do just because the beneficiaries do not get along with the trustee. If the trustee is doing an adequate job managing the funds in the trust, the court is not likely to take action to remove him or her. However, in some cases, the court will approve a change in trustees.

When is it time to file for guardianship for parents?

One of the most difficult things adult children must discuss with their aging Florida parents is the need for a solid estate plan. Beyond distributing assets after parents pass away, a well-crafted estate plan includes documents that can protect one's parent during life, including a power of attorney and health care proxy. When a parent refuses to sign such documents, it may leave an adult child with few choices except seeking guardianship if his or her parent becomes unable to handle necessary financial and medical issues.

Filing for guardianship of a parent is something a child does not look forward to, but the alternative is to run the risk of needing a court order if critical decisions must be made in an emergency. It is not always easy to know when it is time to seek guardianship, but some elder law advisors say there are signs that may indicate it is appropriate to take this step. For example, if an aging parent needs professional care and attention more frequently than the child can provide but refuses to discuss moving to a nursing facility, a child will need legal guardianship to make that decision.

What happens to my loved one's debts?

You may have wished your loved one would have done more to prepare for the end of his or her life, but the fact remains that you are now the one to sort things out. If your loved one named you to be the executor of the will or a Florida probate court appointed you to represent your loved one's estate, you have a lot to do before matters can be settled.

Perhaps you have a lot of physical work, such as cleaning out decades of accumulated stuff. However, before you can begin to remove anything of value from the estate, you will have to deal with your loved one's debts.

Celebs who leave no wills: Aretha Franklin the latest

The rich and famous may accumulate their fortunes using their looks, talent or position in society. However, when it comes to end-of-life decisions, some celebrities seem to be just like many normal folk who put off making plans. Once again, fans and estate-planning advisors were left scratching their heads as music icon Aretha Franklin passed away with no will or trust. While most in Florida may want to know what will happen to her possessions, advisors want her fans to know that while wills are crucial, an estate plan can do more than distribute assets.

The death of a loved one can be an emotional and confusing time. When family members have no documentation of the deceased's wishes, confusion can quickly turn to chaos and contention. Creating an estate plan not only helps minimize the confusion, but it can be an expression of compassion and love when carefully prepared and up-to-date documents relieve the stress family members may otherwise experience. One only has to look at the drawn out and very public probate disputes some celebrities' families undertake when no will is left behind.

Simplified probate, is that a real thing?

One of your loved ones passed away, and you are trying to figure out what you need to do to close out his or her estate. In the state of Florida, probate is often a requirement to do just that. There are different types of probate offered, though, and you are not sure which applies to your case or how long it will take.

Probate can get really confusing. As previously stated, there are different types of probate, and each one has different rules to follow. Simplified probate — also known as summary administration — would be the ideal, as it takes the least amount of time and costs less as well. Not every estate will meet the requirements to use this option, however.

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