There Are Only Two Things That Are Certain: Death And Taxes.

“In This World, Nothing Can Be Said To Be Certain, Except Death and Taxes” – Ben Franklin

But short term, we are much more likely to become incapacitated than to die. So what does it mean to be incapacitated? It means that we can not make our own financial or health-related decisions. This may be due to aging, making our incapacity permanent. According to the Center for Disease Control, as many as 13% of those over 65 will become incapacitated due to some form of dementia. For those over 85, that number increases to 50%. But in speaking to everyone, anyone of any age may become injured and have a temporary period of incapacitation rendering you incapable of acting for yourself.

This is why everyone, old or young, rich or not, should have in place what are called Advance Directives. Advance Directives are documents prepared for you wherein YOU decide who will be making the financial and health decisions for you. Without these documents, your family is unable to make these decisions without the expensive and time-consuming process of applying to the court for guardianship.

The financial Advance Directive is the Durable Power of Attorney. Here in Florida, you can give someone not only the power to write checks and sell or buy property for you, but you can give them the power to create or revoke trusts, give gifts, and other estate planning acts that may be very useful in preserving your life savings so that it is available to you and your family.

The Health Advance Directives include the Designation of Health Care Surrogate, Living Will, and Designation of PreNeed Guardian. The Designation of Health Care Surrogate appoints someone to make medical decisions for you if you are unable. A designation of PreNeed Guardian empowers a loved one to make or change your living arrangements. Finally, in a Living Will, you will spell out specifically what and how much medical care and artificial and life-sustaining treatment you want at the end of your life. This is very important because although your designated Health Care Surrogate can make this decision for you if you are unable, that is a terrible burden to place on someone who loves you – to terminate your life based on what they think you would want. In a Living Will, you decide, today, what makes sense to you so that when the time comes, and that time will be emotional for everyone, your carefully thought out wishes will be known and followed.

At Florida Wills on Wheels, every one of our Wills on Wheels Estate Planning Packages includes each one of these Advance Directives. We even send the Health Advance Directives to your physician so that they are in place and on file when they are needed.

Some New Thoughts About Pet Trusts

Earlier, I wrote about the importance of setting up a Pet Trust to take care of your pets after you pass, but what happens to those very same pets if you become incapacitated? If your Pet Trust is one that is established via your Will, it won’t be set up and funded until after you pass. The same is true if you have a Pet Trust that is included in your Revocable Living Trust in that portion dealing with the Trust upon your death.

Recently, I have started including language in the Powers of Attorney that I draft for clients that authorize the Agent with the Power to set up and fund the Pet Trust upon the incapacitation of the client, including getting the Pet into the custody of the Pet Guardian and the money set aside for the Pet Trustee to pay for the care of client’s pets.

You could also create a Pet Trust right now, while you are capable of taking care of your pets, fund the Trust with your money, be the Trustee and Guardian so long as you are capable of doing so, and then name a Successor Trustee and Successor Guardian for when you are no longer capable of taking care of them.

Either way, it is important to plan for your pets not only after your death but after you can no longer care for them while you are living. They are just like children. We need to prepare for their care in every way we can!

New Parents?

You wouldn’t leave your baby in the care of a stranger. Without a Will, that awful thought could become a reality.

If something happens to both parents, for example, a car accident and neither parent survives, without a Will in place naming a legal guardian, your children become wards of the State until a court can decide which relative or other person is “fit and willing” to care for them. This lengthy process may involve not only a criminal background check of the relative who is willing to care for your children but all their relatives as well. In the meantime, your children could be in temporary foster care with strangers licensed by the State to provide that care. If that isn’t scary, I don’t know what is — and heart-breaking for your children, who have already been traumatized by your death.

Your Will naming a legal guardian for your children will, except in the most unusual cases, be honored by the court. Of course, you want to consider the choice of guardian carefully. Do your children already have a relationship with this person? Do they live in proximity to you so that not much changes, in terms of schools and friends? Do they already have children so that your children could become too great a burden on the potential guardian’s household?

It is a very big decision! But make sure YOU are making that decision NOT the Court!

Another thing that happens if both parents die without a Will is that your children will inherit property outright. Although the guardian may be able to put that money into an account for the care and education of your children when they are 18 they are legally entitled to all of it. It’s not hard to imagine an 18- year old blowing money on a car, video games, and clothes rather than college tuition! The person selected as the guardian may be great with kids, but not so great with money. With a Will, you can establish a Trust for your children, name a Trustee (who may or may not be the same person as the guardian). You would be determining in advance how the money is to be managed for your children’s health, welfare, maintenance, and education. You may specify that your children will not get any money outright until they are older than 18, say, 21, or 25 or even 35! Money given when children are older is much less likely to be blown on frivolities.

The bottom line is: you have put a lot of care into creating your family and planning for the future which you intend to share with them. Don’t let all that go out the window by failing to get proper Wills in place to protect your children should something happen to you.

Know Who You Are Hiring

We all heard about them – unscrupulous lawyers who steal money from the estates of people, robbing the person's heirs of not just money, but a sense of security in the world. I was very disheartened when I read this particular story,

It seems that the deceased person was particularly vulnerable as he was mentally challenged. An attorney who had to be the decedent’s legal guardian for over 25 years stole $900,000 from his estate after his death. How can this happen? I suspect because relatives of the mentally challenged person were all too happy to let someone they thought was trustworthy worry about taking care of their not-so-easy to take care of relative. Lessons learned –

Always investigate people you are willing to place into a position of trust –

Before this attorney stole $900,000 in 2009, ten years earlier, he had been reprimanded by the Michigan State Bar. If you look this guy up today on, there is a red triangle and “Extreme Caution – This lawyer has been disciplined by a state licensing authority.” However, he is now holding himself out as a mediator. That’s scary.

A simple search of the internet will get you some very interesting information.

Make semi-yearly checks into the care and financial management of your loved ones. Ask for an accounting of monies spent. If the lawyer refuses, ask the Court to order them to make regular accountings of money.

Every attorney is required to keep information about his/her client confidential, but a good attorney will get permission from your loved one to give you at least some information. The mere fact that you ask for information may give them pause when they are tempted to help themselves.

If all else fails, report the attorney to the state bar and let the bar investigate what is going on for you. This, most definitely, will give them pause – if not chest pains!

Is Your Estate Protected From Your Ex-Spouse?

Divorce is a time- and energy-draining event. Once it is over, you are exhausted! The last thing you think about is how your estate plan should change to reflect the divorce. However, on that issue, I have good news and bad news.
The Good:

In Florida and many other states, if your divorce is final, your Will, which names your ex-spouse as beneficiary and executor, will be construed as if your ex-spouse died before you. That’s the good news!!

However, there is bad news on a few fronts.
The Bad:

Some of your assets may pass outside of your estate and may still end up with your spouse. For example, your 401K, profit sharing plan, or IRA has a beneficiary name attached to it. It is likely that at one time, you named your ex-spouse as beneficiary. Until that is changed, should you die, your ex-spouse will likely get any assets on which he/she is named “beneficiary.” If you have “payable on death” accounts at the bank or stockbroker, these too may end up in the hands of your ex unless you make a change to the beneficiary designation. Finally, if you have life insurance, again, you have named a beneficiary of that insurance. At one time, it was probably your spouse.

But even if you did remember to change the beneficiaries and if your children are now your beneficiaries, your spouse may end up with control over the monies you have left for them if they are minors and without a trust. Maybe your ex will do the right thing and maybe not. If you will set up a trust, you are now in charge of who will hold, manage and distribute these assets to your kids upon your death.
The Ugly:

I know this sounds silly, but you need to make sure that your divorce is really final. In my first six months of practice, I ran into not one, but two clients who had been separated from their spouses for a long time, but had not actually received a divorce decree. If you are still married, even if your Will names someone else, your spouse (not really an ex) can petition to receive the right to live in your home for life and inherit as much as 1/3 of your personal property – and personal property includes money and stocks!
Make that call!

The best way to make sure your ex doesn’t end up with your estate is to make that call to an estate planning attorney. I know it is the last thing you want to think about after the battle of the divorce, but trust me, all your hard work protecting yourself in the divorce could be undone if you don’t make that call. Chances are that you will be able to quickly cross all of the t’s and dot all of the i’s to make your new estate plan (which does not include your ex) a reality. Don’t wait! Call now!!!

How Safe is Your Pet From The Kill Shelter?

Last year, over 200,000 dogs and cats were euthanized in kill shelters across Florida before they could be adopted out. That’s atrocious!

We animal lovers can’t imagine our pets coming to such an awful end and we would do literally anything to protect our pets. But what happens to your pets if something happens to you? If we are lucky, we have people in our lives who would step in, take our pets in, and care for them in more or less the same way we would. But what if we don’t have such a person? What if taking our pets in would be a financial burden to our loved ones? What if the person we thought would take care of our pets has to make other arrangements? Without money to care for your pets, they might just end up in the shelter and then…. I can’t even think about it!

With a Pet Trust, you can set aside money for the care of your pets, just as you would if you passed away leaving minor children. Additionally, you can designate a person to care for the pets. That person can either be given the power over the money for their care, or you can give that power to another person. And, you can spell out exactly what kind of care you want for your pets, for instance, yearly teeth cleaning, vaccinations, and grooming. You can even leave instructions on which vet/groomer you want them to go to.

The fact is no one loves and cares for our pets like we do. Make sure that if anything happens to you, your pets get the consistency of care that you would give them. Make a Pet Trust either in your Will or in your Revocable Living Trust. You wouldn’t leave your minor children to fend for themselves. Don’t leave your pets hanging out there!

What You Need to Know about “Probate”

I was amazed today when some I know who has been working in an attorney’s office asked me, “If I have a Will, then my estate doesn’t have to be probated, right?”

I guess because I work in this area, I am surprised by how much misinformation people have about probate and Wills in general.

A Last Will and Testament is simply a document which tells the Probate Court how to distribute the property in your estate. It will still be the Court which will have to approve the distribution. Your executor/personal representative (the person you named in your Will to handle the distribution) will have to apply to the Court to be approved and will have to run everything through the Court for approval.

ALL ESTATES are required to be probated. Having said that, not everyone who dies has an “estate.” An estate is property, both real and personal, that is owned by a person at the time of his or her death. Therefore, if you have a bank account titled to you OR your spouse, the bank account is owned solely by you or your spouse when one or the other of you dies. Therefore, the bank account does not constitute any property owned by you which becomes your estate. Similarly, if you have a house which is titled you and your spouse, “as joint tenants with right of survivorship,” when you pass, the house belongs solely to your spouse and again, is not part of your estate. Therefore, let’s say you only had the bank account and the house, both titled the way we said above. When you die, you have no “estate” because you have no property which you own at your death. Therefore, there is nothing to probate, therefore you have avoided probate.

The same mechanism is at play with insurance policies and retirement accounts, which have designated beneficiaries. The monies passed to beneficiaries from these also pass “outside of probate.”

Trusts are also administered outside of probate. That is because a Trust is an entity of its own, a lot like a corporation. The common type of estate planning tool, the Revocable Living Trust, is a Trust that you set up and then you put your assets “into” the Trust. That means that you re-deed your house, re-title your car, and re-title your bank accounts, stock accounts, etc. into the name of the Trust. People are scared of Trusts because they don’t want to lose control of their money and property; however, a Revocable Living Trust is one where you are both the Trustee and the Beneficiary during your lifetime. I tell people it's like a purse – you can put things into it and you can take things out of it. It is a probate-avoidance tool because when you pass on, a new trustee and a new beneficiary or beneficiaries take your place, and the Trust as you have designated, becomes irrevocable at the time of your death, meaning it cannot be changed. While you are alive, however, you can revoke it, change it, amend it, sell the property in it, buy more property to put into it, just like it is your personal purse. Why is this not an estate? Because you, the Beneficiary/Trustee don’t own the property, the Trust does. So, when you pass, the Trust keeps on going. Thus you, to the extent you have placed all your assets into the Trust, die without assets and don’t have an estate to probate.

For a simple list of estate planning techniques that avoid probate, see this simple article at NerdWallet The only criticism I have of the article is that it describes Probate as Estate Litigation. Technically it is not litigation because it is a one-sided administration of the estate through the Probate Court – no one is suing anyone else. With that said, the techniques mentioned are valid and easily explained.

What The Dairy Farmers Know That You Maybe Don’t . . .

What the Dairy Farmers know that you maybe don’t . . .

I found it interesting that on “Dairy Herd Management” the January topic was “Legal: Review and update your estate plan now.”

The article certainly has the right premise. The start of the New Year IS the perfect time to review and update your estate plan. I am often asked, “When do I need to be concerned that I need a new Will or estate plan?” The fun answer is “When you win the Powerball!!!!”

But seriously, if you have married, divorced, become widowed, had a child OR your children have married, divorced, become widowed, or had a child, you may wish to consult with an attorney about whether you need to rethink your estate plan.

If you are thinking, “But I don’t think I want to change anything,” that may be because you don’t know how these events could shape your estate plan or could even render what you have done useless or less effective than originally planned. I used to tell my clients, “You can ask me any question you want!” I thought this would elicit all kinds of legal questions. But most of the time, it didn’t. Why? Because often clients don’t know what questions to ask. Whereas, a good attorney asks questions that bring to light issues that need to be addressed.

It’s funny – my friends know what I do for a living, that is, help people plan their estates. Nevertheless, I had a friend ask me if I would redo her Trust and then she said, “It’s just filling out forms, right?”

I was shocked she thought that an attorney fills out forms. “Not really,” I told her. “For instance, you have a son by a previous marriage, correct? A good trust takes into account that you will want to protect your son in the event of your death and your husband’s remarriage to (God forbid) an unscrupulous woman who wants to cut your son out of his inheritance. If your husband becomes incapacitated and she has his power of attorney, guess what? She could redo the Trust and cut out your son. We should really think about your Trust and how it should be protected from this maybe far-fetched, but possible devastating result.”

This is precisely why it is important to sit down with an attorney rather than to fill out estate planning forms on the internet. Legal Zoom may have attorneys now to answer your questions, but again, maybe you don’t know what questions to ask. It is always better to have a long and thorough talk with an attorney who knows you and your particular situation and can advise you as to what is best in your unique situation.

So come on! Don’t let the Dairy Farmers be better prepared than you! Call your lawyer and get chatting!

What does it mean to be “On-Purpose”?

Well immediately I think of all the jokes out there that have to do with people who were born via a “Happy Accident”; but I doubt that is what the intention of this month is focused on. I actually had to look up what others had done for “Be On-Purpose Month” in order to get a better idea about it. I have since learned that it mainly has to do with motivating yourself to feel more confident and less poorly of one’s self by trying to live as if every day by making the choices you want to make. Ideally, this would often take the form of a life in a lap of luxury that wouldn’t have the cares of taxes, loans, and politics. This is however not an ideal situation everyone can afford, so small steps in Being On Purpose is making tough decisions that could make you happier, even if for a period of time it may cause a bit of inconvenience. On the flip side of this; for the same life decision you choose convenience, but you take comfort in the decision instead of regretting it. You made the choice and have set your priorities. Don’t blame anyone or anything else on the decision. You made it. Own it. Try to get the same happiness from that decision.

For example, you are in a job that pays well enough and gives you sufficient benefits. You aren’t uncomfortable with your life, but you had always wanted more from it. An opportunity on the other side of the country presents itself. Going there would mean taking a risk; perhaps living cost a very high and the pay you would get would only be able to support a chunk of what makes up your life now. A big chunk; everything that you need but perhaps not everything that you want. This opportunity being on the other side of the country also means you won’t know anyone there and will be very far from the people who care about you now. But the opportunity may prove to be lucrative. If it turns out the way it says it might you would be much better off than you are now, but not for some time if ever. It would be a big decision for a bigger step toward the possibility of a better life for yourself, and your family if you’ve got yourself one.

So you have two decisions: go for that risky chance at a better life that would mean a hopefully temporary inconvenience to you, or stay with your job and your life that you are in now and play it safe. Whatever you would choose doesn’t even really matter here. Some people will take the chance while others will play it safe. The point of Being On Purpose is that no matter what happens after you follow through with the choice you make; you don’t regret it. You knew the pros and cons of either decision at the time. If you ended up going and the opportunity you sought didn’t work out; that’s fine! There are other opportunities and you can always find a way to make things work. But you made the choice to take that chance and you should feel good about it! You took that chance because that is what you believed was best. Own it. Laugh about. Feel proud of your decision. If you ended up staying and it turns out that opportunity succeeded and you missed out on that; that’s fine! Your life is still a good one. That hasn’t changed. You are still close to the people you love and who love you. That hasn’t changed. You played it safe because that is what you believed was best. Own it. Laugh about. Feel proud in your decision; no matter what decision you made. That goes for every decision we make, and sure we can have regrets. We can also not let that regret keep us from being happy.

Be On Purpose!

What Do I Do After My Spouse or Parent Has Passed?

Recently, at the Charlotte County Wellness Fair, I was asked the question:

Is there a list anywhere of the things I should do or must do after my spouse has passed? (Of course, this would also be a question that would apply if your parent has passed and you are named as the personal representative.)

In Florida, the following needs to be done:

Locate the Last Will and Testament – This has to be the original. In some cases, a copy will do, but it is a big production to get a copy accepted by the Court.
Obtain a Death Certificate – Certified copies are usually supplied by the funeral home, but if there is no funeral home, you may obtain certified copies from the Medical Examiner’s Office. There are two kinds of certified copies: (1) with the cause of death; and (2) without the cause of death. Make sure you get at least one with the cause of death, but also a few (three or so) of the one without cause of death.

Hire a Probate Attorney. Unless there is only one beneficiary and that beneficiary is named as personal representative, the Probate Court may insist that the Personal Representative be represented by an attorney. It may seem like a harsh and costly requirement, but the probate process is not simple and, inevitably, there will be issues that arise that are best dealt with by an attorney.

File the Death Certificate (without cause of death) and the original Will with the County Court in the County in which the deceased was a resident at the time he or she passed. If you have hired a Probate Attorney, he or she will do this for you. Some people think the person had to die in that county, but that is not usually the case. For example, if a person lived in Charlotte County, but died in Sarasota Memorial Hospital in Sarasota County, the Will, and Death Certificate should be filed in Charlotte County.

There are three types of estate administration in Florida – one is Summary Administration which is for small estates (generally under $75,000); one is Formal Administration (estates over $75,000), and then Disposition Without Administration – which is available in very limited estates. The Attorney will advise the Personal Representative which of these needs to be filed.
The Personal Representative will then collect all of the estate property, real estate and personal property, collect all information available about bills owed by the decedent, serve notice on the creditors of the decedent of the administration, pay valid claims, personal representative and attorneys fees, file tax returns, sell property, distribute specific bequests, and proceed toward a final distribution of the estate. Again, the Probate Attorney will assist the Personal Representative in all of these matters.

Depending on the value of the estate and the amount of real estate and personal items owned, the administration of the estate from start to finish can be as short as a few months or as long as a few years. Make no mistake, it is work. That is why it is good to have an attorney to guide the Personal Representative through this process.