Estate Planning

While everyone needs individualized legal advice on what language their estate planning documents should contain, the following are some of the most common and important clauses which should be discussed with the lawyer preparing your will or living trust.

• Revocation: Previously written wills or trusts should be revoked to avoid the court intervening later to decide which parts of certain documents should be followed.
• Disaster Clause: This clause helps plan what will happen to your assets if both you and your spouse or main beneficiary die at the same time.
• Appointment of personal representative: While doing estate planning you will need to name someone as your Personal Representative who will be in charge of distributing the assets in your estate.
• Guardianship of children: If you have minor children, it is very important that you name someone as their guardian in the event that you or you and your spouse die.
• Spendthrift Provision: This clause prevents the beneficiary of your assets from transferring their rights to those assets. A spendthrift provision is often used to protect assets from creditors.
• Total failure: Total failure would occur if all heirs of your estate died before inheriting your assets. This is an extremely rare situation but, without a total failure clause, your estate would go to the government in this circumstance.  A total failure clause allows you to instead designate an organization of your choice for the estate to be given to.

If you have questions about what should be in your estate planning documents to ensure all of your wishes are met and your assets are distributed exactly as you desire, contact our office at (941) 906-1231 to speak with an experienced estate planning attorney.

It is important for Trustees of irrevocable life insurance trusts to understand their duties which exist even while the insured is alive.  Some of the most important duties are:

• The Trustee must pay premiums on the policy. This money would usually be added to the trust by the insured person as each premium comes due.
• The money added to the trust by the insured is taxable unless the Trustee issues a “Crummey” notice to each beneficiary letting them know that they do have the right to ask for a part of that money added to the trust to pay the policy’s premium. Issuing a Crummey notice qualifies this added money for a gift tax exemption.
• The Trustee could be held responsible if the insurance company through which the policy is purchased becomes financially insolvent and the Trustee did not anticipate and prevent financial losses.
• The trustee could also be held responsible if they are found to have made very poor investment or management decisions which resulted in the loss of funds.
• The trustee must ensure they do not have a conflict of interest such as receiving part of the insurance broker’s commission.
• A Trustee has the right to withdraw money from the ILIT to loan to the insured.

When agreeing to become the Trustee of an irrevocable life insurance trust, it is important to understand what your duties will be and have a plan in place for executing them properly.  If you have further questions about this post or a specific ILIT, contact our office at (941) 906-1231.

When getting remarried later in life, you must consider how that marriage will affect your previous plan to leave assets to beneficiaries such as children from previous marriages.  Most think that having a will specifying who their assets will go to is enough but, after getting remarried, a will may not be enough.  Even if a decedent has a will leaving assets to their children at the time of their death, their new spouse can be eligible to receive assets through a probate process that occurs involving an “elective share” under Florida law.

To ensure your assets are passed on as you desire, it is usually recommended that you and your new spouse-to-be sign a prenuptial agreement designating what will happen to each of your assets in the event of a divorce or the death of one spouse.  If you are already married, you can also sign a postnuptial agreement to make your wishes clear as to who the beneficiaries of your assets should be.  The use of trusts that provide for your children from the prior marriage, as well as your spouse, are also common estate planning tools.

When planning a second marriage, it is crucial to talk to an estate planning attorney and put necessary documents in place to designate beneficiaries of your assets.  To contact one of our experienced estate planning attorneys, call our office at (941) 906-1231.