Estate Planning and Tax Lawyer Blog

A study conducted by Harris Interactive for Lawyers.com shows that around half of Americans have no estate planning documents in place.  The biggest reason for that was that many were deterred by the legal cost and erroneously believed that without a large amount of assets, they had no need to plan at all.

First, the legal cost of setting up an estate plan is, in most cases, going to be less than your heirs have to spend in legal costs.  Your heirs will have to hire an attorney to probate their estate.  The legal fees usually end up being much higher to probate the estate than they would have been to have a proper estate plan in place which completely avoids probate.

Second, most mistakenly believe also that your surviving spouse automatically gets all your assets, no matter how much or how little, upon your death.  Actually, only 16 states allow a surviving spouse to inherit everything.  Most states have some sort of split between the surviving spouse and the decedent’s children.  This can get messy with blended families.

Continue reading "Study Shows Most Americans Do Not Have An Estate Plan" »

It is that time of year when your children are getting ready to graduate from high school and head off to college. One thing that is always left off the list of to-dos is a Last Will and Testament, Living Will, Health Care Surrogate and Durable Power of Attorney for your child.
Your child is going to start accumulating assets from this point forward by setting up a checking account, if they do not already have one, and probably getting some sort of a job to supplement their spending habits in college. Without a Last Will and Testament naming someone to take ownership of their assets upon their untimely death, the State of Florida (or whatever state you live) has made a Last Will and Testament for them.
Unfortunately, accidents tend to happen while children are away at college and medical decisions need to be made for their benefit. Without a Health Care Surrogate or Living Will in place, you will not be able to have a say in how your child is taken care of.

Continue reading "Its Graduation Time, Now Time for a Will" »

Most individuals would be in agreement that when it comes time, they want a good death. Too often, this is not further defined by the person, and there are uncertainties abounding when a crisis occurs. Spouses, children, siblings and others often find themselves in the unpleasant position of surrogate decision-maker, trying to decide what their loved one would want if they could make the decision. This is a role many have to step into, with only one in four people having signed advance directives that indicate their desires if they cannot make medical choices themselves.

An advance directive includes a healthcare power of attorney and a living will. A living will describes the type of life-sustaining treatment an individual wants if they end up in a terminal and persistent vegitative state. A healthcare power of attorney selects someone to make medical decisions for an individual who cannot make medical decisions for themselves. Unfortunately, specific medical situations are not always addressed by advance directives. Clinicians can help family members with the decision-making process. Physicians may feel uneasy stating the consequences of different decisions, but an increasing amount of family members want to know the prognostic information in the ICU. An effective surrogate will ask physicians lots of questions to ensure that their loved one’s wishes are carried out.

To read more on this article, visit Prepare for a 'good death' with an advance directive and effective surrogates.

Continue reading "Advance Directive can Provide a "Good Death"" »

The death of child actor Gary Coleman should serve as a reminder to us all of the importance of having an advance medical directive.

After suffering a major brain hemorrhage sustained in a bad fall, Coleman was placed on life support at a Utah hospital while doctors consulted with the woman they believed to be his wife – but who, it turns out, had been divorced from Coleman in 2008.  She was no longer legally able to provide direction for his care.

Luckily, Coleman had drafted an advance medical directive, no doubt because of his long history of health problems.  Medical authorities followed his wishes as laid out in that directive, and he was removed from life support and died shortly thereafter.

Advance medical directives include:

Living Will – a document that specifies what kind of medical treatments should take place in case you are incapacitated.

Health Care Proxy – a document that designates a person who can make health care decisions for you in cases where you cannot.

Durable Power of Attorney – a document that gives the power of attorney to others to make financial transactions for you in case you are medically incapacitated.

For more information on advance medical directives and Florida estate planning, contact our Jacksonville Florida estate planning law firm.

If your phone contact list includes both a pediatrician and a gerontologist, welcome to the sandwich generation, that growing demographic segment of the population who are taking care of their parents and their kids at the same time.

Besides healthcare, many of us are also taking on more responsibility for helping older parents manage their finances.  If you are currently tasked with that responsibility – or will be at some point – here are some things to put on your checklist:

Prescription drug coverage. Is the Medicare drug program your parents chose a year or two ago still the right one for them?  Most seniors find the plethora of choices confusing, so defer making any changes they might need.  Mark Nov. 15 on your calendar, which is the start date for Medicare’s open enrollment program (it ends on Dec. 31).  Visit www.medicare.gov and use the online prescription drug plan finder to find the best plan for them.

Retirement account distributions. If you have parents over the age of 70 ½, they must take the required minimum distributions from their qualified retirement accounts by the end of each year.  If they don’t, whatever is left over on Dec. 31 is subject to a 50 percent penalty.  You can set up automatic deductions to solve this problem as well.

Estate planning.  If they have not done so already, your parents need to visit with an estate planning attorney.  Estate planning laws change constantly, so even if they do have an estate plan in place but haven’t updated it in awhile, they need to do so.

For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.

The recent death of child actor Gary Coleman should serve as a reminder to us all of the importance of having an advance medical directive.

After suffering a major brain hemorrhage sustained in a bad fall, Coleman was placed on life support at a Utah hospital while doctors consulted with the woman they believed to be his wife – but who, it turns out, had been divorced from Coleman in 2008. She was no longer legally able to provide direction for his care.

Luckily, Coleman had drafted an advance medical directive, no doubt because of his long history of health problems. Medical authorities followed his wishes as laid out in that directive, and he was removed from life support and died shortly thereafter.

Advance medical directives include:

Living Will – a document that specifies what kind of medical treatments should take place in case you are incapacitated.

Health Care Proxy – a document that designates a person who can make health care decisions for you in cases where you cannot.

Durable Power of Attorney – a document that gives the power of attorney to others to make financial transactions for you in case you are medically incapacitated.

For more information on advance medical directives and Florida estate planning, contact our Jacksonville Florida estate planning law firm.

If your phone contact list includes both a pediatrician and a gerontologist, welcome to the sandwich generation, that growing demographic segment of the population who are taking care of their parents and their kids at the same time.

Besides healthcare, many of us are also taking on more responsibility for helping older parents manage their finances. If you are currently tasked with that responsibility – or will be at some point – here are some things to put on your checklist:

Prescription drug coverage. Is the Medicare drug program your parents chose a year or two ago still the right one for them? Most seniors find the plethora of choices confusing, so defer making any changes they might need. Mark Nov. 15 on your calendar, which is the start date for Medicare’s open enrollment program (it ends on Dec. 31). Visit www.medicare.gov and use the online prescription drug plan finder to find the best plan for them.

Retirement account distributions. If you have parents over the age of 70 ½, they must take the required minimum distributions from their qualified retirement accounts by the end of each year. If they don’t, whatever is left over on Dec. 31 is subject to a 50 percent penalty. You can set up automatic deductions to solve this problem as well.

Estate planning. If they have not done so already, your parents need to visit with an estate planning attorney. Estate planning laws change constantly, so even if they do have an estate plan in place but haven’t updated it in awhile, they need to do so.

For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.

What are the basic estate planning tools that you can use to protect your family – and your assets – no matter what age you are right now?

Will – if you die without a will or a living trust in place, your assets will be divided up according to state law.  And you might not like it.  Are you on a second marriage?  Just been through a divorce?  Without a will designating how your assets will be distributed, you will be leaving a mess for your heirs to clean up.

Financial Power of Attorney – this allows you to designate a responsible party to handle your financial affairs in case you become incapacitated.

Living Will – a living will or a healthcare power of attorney designates someone to make major healthcare and/or end-of-life decisions for you when you cannot, according to your wishes.

Beneficiary Forms – even if you name the beneficiaries of retirement accounts or life insurance policies in your will, if those names are not on the account or policy’s beneficiary form, they will not receive them.

Title Your Assets – if you have set up living trusts for your spouse or children, you must be sure to retitle the assets in the name of the trust or the living trusts are invalid.

Need to learn more about protecting your family through careful estate planning?  Contact our Jacksonville Florida estate planning law firm.

A University of Michigan study on the effectiveness of advance directives (living wills and durable powers of attorney) shows that medical professionals almost always respect the wishes of people who have advance directives in place.

The study, published recently in the New England Journal of Medicine, is one of the largest ever done on the effectiveness of advance directives.

From an article on the study in the Los Angeles Times:

In a study of 3,746 deaths, researchers found that 42.5% of patients had faced treatment decisions near the end of their lives but that more than 70% of those people had lacked the ability to make choices because of their mental or physical health. Among that group, however, the majority -- 67.6% -- had advance directives.

Moreover, the instructions left in the advance directives were almost always carried out by surrogate decision-makers. The will of the patient, said the lead author of the study, prevailed.

"This is a big change from the early '90s, when studies reported that only about 20% of people had advance directives," said Dr. Maria J. Silveira, a clinical scientist at the Veterans Affairs Ann Arbor Healthcare System and an assistant professor at the University of Michigan. "I think it shows the public has bought into this and thinks it's important."

Silveira used data from the long-running Health and Retirement Study, which surveys adults ages 51 and older nationwide. In analyzing data from people ages 60 and older who died between 2000 and 2006, researchers found that of the 398 incapacitated people who had used a living will to request limited care at the end of life, almost 83% received it. Limited care was described as care in only certain situations.

Of the 417 incapacitated people who had requested comfort care in a living will, 97% received it. Comfort care was described as being kept comfortable and pain-free while forgoing extensive measures to prolong life.

If you need more information about living wills or durable powers of attorney, contact our Jacksonville Florida estate planning law firm.

My last blog began a series of questions you should ask yourself to see if your estate plan needs to be updated.  Again, if you answer “No” or “I don’t know” to any of the questions, please set up a consultation with us so that we may review your estate plan with you to either tell you what it says or update it so that you have an estate plan that works for you and your families needs:

1. I am satisfied with the persons I named as guardians of my minor children in my current plan.
2. I am satisfied with the persons I named as executor or trustee in my current plan.
3. The persons I named as executor are either a Florida resident or a family member.
4. I am satisfied that my current plan sets up a contingent trust for my minor children.
5. I am aware of all future estate planning fees and expenses; including an understanding of those involved at the time of my death.
6. My children have met with my attorney and fully understand their roles and responsibilities upon my incapacity or death.
7. My Revocable Trust, if any, and Power of Attorneys specify an understandable test to determine my disability.
8. My Revocable Trust, if any, gives instructions for my care and the care of my loved ones if I become mentally disabled.
9. My Revocable Trust, if any, is fully funded so that my family can avoid the delays, publicity  and expenses of probate.
10. I and my spouse, if applicable, own everything jointly.
11. I have put my personal property into my Revocable Trust, if applicable.
12. I own property in another state which has already been dealt with in my estate plan.

If your estate plan needs updated, please conult with an estate planning attorney to set up a review of your current estate plan.

Does your estate plan need a tune up?  Although most Americans do not have an estate plan, those who do have an estate plan set up their estate plan, shove it in a file drawer in their homes and completely forget about it afterwards.  Below are a series of questions to quickly ask yourself to make sure that your estate plan still does what you originally wanted it to do.  If you answer “No” or “I don’t know” to any of the questions, please set up a consultation with us so that we may review your estate plan with you to either tell you what it says or update it so that you have an estate plan that works for you and your families needs.

1. I have a current Health Care Power of Attorney that has the required HIPAA authorizations to permit my spouse, children and/or family to make emergency health care decisions for me in the event I am unable to do so.
2. I have a current Durable Power of Attorney that is less than four years old to permit my spouse or children to handle my financial affairs in the event I become disabled.
3. I am certain that my current estate plan will minimize possible federal estate taxes at my death, including taxes on my house, life insurance and IRAs.
4. I have taken steps to avoid possible will contests and disputes at my death.
5. I have taken steps to protect my children’s inheritance in the event my surviving spouse chooses to remarry.
6. I have recently checked the beneficiary designations of my retirement plans and life insurance policies, and I am confident that I have not listed my estate or any minor children as either primary or secondary beneficiaries.
7. I have a plan to provide creditor and lawsuit protection for assets passed to my surviving spouse.
8. My current plan provides creditor and lawsuit protection for my children’s’ inheritance.
9. My current plan addresses income tax planning.
10. I have a plant to protect my children’s inheritance from a divorcing spouse.

Again, if you answered "No" or "I don't know", please consult with an estate planning attorney to review your estate plan and ensure it still works for you and your family.

Although there is currently no estate tax (which could change any day), there are eight basic estate planning steps that everyone should take, no matter what your net worth is. 

The first step is to have a financial power of attorney.  The financial power of attorney appoints someone to handle your financial affairs if you are unable to do so yourself.  This document ensures that all of your assets are taken care of and your bills are being paid.  The person appointed can be appointed immediately or only upon your disability.  Without a financial power of attorney, your family will have to go to court to have permission to deal with your assets.  State laws change frequently, make sure your financial power of attorney is valid under your state’s law.

Step two is to make sure you have a valid health care power of attorney and living will.  The health care power of attorney allows someone to make health care decisions for you if you are unable to make them for yourself.  A living will states what your intent is if you are in a persistent, vegetative state.  More commonly stated as “whether or not to pull the plug”.  Your health care power of attorney needs to have the HIPAA authorizations within it, otherwise it is not a valid document.

Step three is to calculate your net worth.  You may be surprised where you stand financially.  This is important from a tax standpoint but you will also get a hold of everything you own.  Sometimes assets fall through the cracks and are not properly planned for because they were not brought up during the estate planning discussion.

Step four is to review your beneficiary designations.  Upon your death, your beneficiary designations control how that specific asset will pass.  A will or trust has no say.  If your ex-spouse is named accidently, the ex-spouse will receive that asset.  Beware, it happens everyday!

Step five is to create or update your will.  A will allows you to determine how your assets pass to your loved ones.  If you do not have a will, the state where you live has graciously set one up for you but it probably does not pass your assets according to your wishes.  This is especially true when you are remarried and have children from your current and/or previous marriage. 

Step six is to plan for your state’s estate tax.  The District of Columbia and23 other states have their own estate or inheritance taxes.   If you don’t plan for them, you could inadvertently cause a state estate tax upon your death.

Step seven is to check how your assets are currently titled.  Do you have everything titled jointly?  If you have a trust, does your trust own your assets?  If you are unsure how your assets are titled, please review the title of your assets as it makes a big difference upon your death.

Finally, the last step is to gift while you are alive.  Currently, you can give $13,000 per year to anyone you wish.  You can stand outside of your church and write a $13,000 check to everyone who passes by.  Additionally, you can pay anyone’s college or private school tuition or medical bills so long as they money goes directly to the educational facility or medical provider.

If you need help with any of the above estate planning steps, please consult an estate planning attorney for estate planning legal counsel.