An Estate Can be Planned With a Last Will and Testament or a Trust-based Plan
- Deciding if you need a Will or Trust based plan depends on your family circumstances as well as your financial situation.
- Do you want to plan for your care and the use of your assets in case you become mentally incapacitated?
- Do you want your family to avoid Probate?
- Do you want to protect your children’s inheritance from creditors or future divorces?
These are some of the questions we help you think about to find the right plan for you.
At Ana M. Veliz, P.A. we use the initial consultation in our process, to learn about your family and financial circumstances, your objectives, and desires so we can recommend either a Will or Trust based plan.
Do you know what the major differences between a Will and Trust are?
What is a Last Will and Testament?
A Last Will and Testament is a legal declaration by which a person provides the instructions for the distribution of his or her property after death.
A Last Will and Testament does not avoid Probate.
Some things for you to consider:
- What happens if you die without a Last Will and Testament?
- Do you have minor children? Who will raise your children if both parents die?
- Did you know that a Last Will and Testament must be admitted in Probate Court so that your property can pass to those you have listed as beneficiaries?
- Did you know that a Last Will and Testament may not control all the assets you own?
At Ana M. Veliz, P.A. we use the initial consultation in our process, to learn about your family and financial circumstances, your objectives, and desires so we can recommend either a Last Will and Testament or Trust based plan.
What is a Will?
A Will or testament is a legal declaration by which a person, the testator, names one or more persons to manage his or her estate and provides for the distribution of his or her property at death. A Will does not avoid Probate. If you die without a Will your assets will be distributed to your heirs at law in accordance with Florida Law.
Some things to think about:
- What happens if you die without a Will?
- As a soon to be parent, are you aware of how crucial a Will is?
- How difficult is it to create a Will?
- What are the legal restrictions/capabilities of a Will?
- Did you know that a Will needs to executed in Court (Probate) so that your property can pass to those you have listed as beneficiaries?
- Did you know that a Will may not control all of the assets you own?
What is a Trust?
A trust is a legal agreement whereby property is held by one party for the benefit of another. A trust is created by a settlor, who transfers property to a trustee. The trustee holds that property for the trust’s beneficiaries.
Having a Revocable Trust as the basis of your estate plan will allow you to serve as Trustee until incapacitation or death. That means you control and benefit from the trust and its assets until you become incapacitated or die.
Some things for you to consider:
- Why do you need a Trust?
- What are the advantages/disadvantages of using a Trust over a Last Will and Testament?
- What are the differences between Revocable and Irrevocable Trusts?
- If you plan with a Trust do you have to give up control of your property?
Trusts: Revocable VS Irrevocable
Choosing between setting up a Revocable or Irrevocable trust is critical and key to making the right decision about the best strategy available for your family’s situation in Estate Planning. Each option is very different in effect and each serves very particular purposes.
We can explain in detail how each type of trust works and if which one is right for your plan!
Below are a few of the major differences between Irrevocable or Revocable trusts:
Irrevocable Trust
- Ownership of Property:
- Once assets are placed in an irrevocable trust, the property no longer belongs to the Creator of Trust; but to the trust.
- A properly set-up, implemented, and funded irrevocable trust can provide the best possible protection of assets from claims by creditors, as the assets have literally changed ownership.
- Estate Taxes:
- Since the Creator of Trust no longer owns the property, it is not included in calculations of the total value of property at the time of death.
- Modification:
- This type of trust can not generally be changed, amended, modified. However, Florida law allows certain exit strategies which provides flexibility.
- Protection of Assets:
- Since the assets in the trust no longer belong to the Creator of the Trust, they are generally protected from creditors or from other claimants.
Revocable Trust
- Ownership of Property:
- With a revocable trust, the Creator of Trust retains complete ownership of the property.
- The control over the management and use of the property remains with the Creator of the Trust.
- Estate Taxes:
- Since the Creator of the Trust still owns the property, the value of the property in the trust will be included in the calculation of the total value of property at the time of death.
- Modification:
- This type of trust allows the instrument to be modified or revoked at the Creator of the Trust’s discretion.
- Protection of Assets:
- The assets are not protected: since the Creator of the Trust retains full control and power over the assets, he or she is still liable for legal claims against the assets.
We can help create the right estate plan for you and your family!
At Ana M. Veliz, P.A. we use the initial consultation in our process, to learn about your family and financial circumstances, your objectives, and desires so that we can recommend strategies for your estate plan.
Health Care Directives
One very important component of a comprehensive estate plan are documents that administer the legal tools needed for someone to control your medical care, should you become incapacitated in such a way that you are unable to properly make health care decisions.
If you are unsure on where to begin to plan to get your affairs in order for a simpler tomorrow, click the button below.
We Put The “Power” In Power Of Attorney
Giving someone a Power of Attorney is an important decision that should not be taken lightly. . In Florida, a Durable Power of Attorney cannot be limited to use only in case of mental incapacitation. The Durable Power of Attorney is effective upon signing. In many ways it is a blank check that you are giving a trusted individual. It is important to discuss the consequences with a counseling oriented attorney.
Usually thinking about one’s incapacitation might seem grim. However, if it does happen, it’s best to be prepared. When you appoint a person as agent in a “Durable Power of Attorney”, you are trusting that person to make decisions for you. Although effective immediately, usually the Durable Power of Attorney is used in case you’re unable to make decisions because of illness, accident or absence. You can appoint virtually anyone as long as they are a trusted individual and willing to act on your behalf.
So why is it selecting a power of attorney so important? The consequences of not having a Durable Power of Attorney can also be difficult for a family. Usually if a Durable Power of Attorney is not in place, a Guardianship will need to be established if a person is mentally incapacitated. If you neglect appointing someone to act on your behalf in the event of your incapacitation, serious financial issues can arise. Bills can be left unpaid and your dependents may go indefinitely without the benefit of your financial support. It is very likely that your assets may even become frozen.
Do I need an attorney to appoint someone?
You may not need a lawyer to appoint someone. However we encourage having a legal professional look into your needs to keep you and your estate protected. A power of attorney is a very powerful tool, and providing someone with access to it can leave you defenseless if that person is chosen wrong. Our team can assist you in deciding whether you should appoint someone with unlimited power or restricted, which is vital.
Health Care Surrogate
In Florida, a power of attorney for medical decisions is known as a Health Care Surrogate. It is the document that names an agent to make health care decisions in the event that you are unable to make health care decisions for yourself.
Funeral Arrangements
You may not want to think about your funeral. But taking care of this arrangement can spare the pains of your loved ones making these decisions for you during troubling times.
