By Phil Rarick, Miami Trust Attorney

Naming a minor child as a beneficiary of a will, life insurance policy, IRA, 401K, bank account or any other source of fund is almost always a substantial mistake for four reasons:

1. If the funds are over $15,000 a guardian ad litem may need to be appointed by the court for the minor to access the funds upon death or disability of the parent. See F.S. 744.301. Court costs to petition the court and secure such funds on behalf of the minor could run from $3,000 to $5,000.
2. Upon reaching the age of 18 the minor becomes of legal age and can immediately claim all funds. Therefore, if the goal was to set aside the funds for the child’s education, then these funds are likely lost. How many 18-year-olds have the money management skills to handle any significant sum of money? Would they use the funds for college tuition – or purchase a bright yellow Mustang? You may think your child is the exception, but do you really want to take this risk?
3. After age 18, the funds can be attacked by creditors of the child. Let’s say the child gets an American Express card and maxes out the credit card. American Express could have a claim on your adult child’s inheritance.
4. If distributed at age 18, the funds will be considered as available funds for any financial assistance or scholarship the adult child seeks for college or university entrance. In a properly structured trust, the funds would not be factored into such need based financial assistance.

Much Better Options

1. Prepare a Protective Educational Trust or Safe Harbor Trust For Minors as part of your revocable living trust or in a separate irrevocable trust. Such Trusts would allow you to appoint a person you trust to act as a trustee for any monies you intend to go to your minor children or grandchildren. These types of Trusts can also help ensure that every dime is used for the benefit of your child – and no one else. See our Quick Reference Guide: Understanding Living Trusts For Florida Residents.
2. Do not name minors a primary or contingent beneficiary of life insurance.We see clients often get poor advice from life insurance agents on this point. For married couples, it is popular to name the other spouse as primary beneficiary and children as contingent beneficiaries. If the spouse does not survive, and the funds go to the minor children, you have all the four problems mentioned above. Rather, consider a revocable or irrevocable trust that names your children as beneficiaries and provides guidelines for when the funds can be distributed. Trusts come in thousands of different variations – consult a Miami trust attorney to help you decide how best to structure the trust.
3. Do not use Uniform Gift To Minor Accounts or UGMA accounts – except for small sums under $1,000. These accounts are overused. The beneficiary of a UGMA (Uniform Gift to Minor Account) can receive the entire sum at age 21. These funds are much better protected if they flow into a trust.

For more information about protecting funds for your minor children, contact an attorney at Rarick Trusts & Wills Law at (305) 709-2858 or info@raricklaw.com. As Miami trust attorneys, with over 60 years of collective experience, we welcome the opportunity to meet with you and discuss your best legal options.

Notice: This article is intended for informational purposes only. It is important you consult with an experienced Miami Trust attorney. For more information contact attorney Phil Rarick at  (305) 709-2858 or by email prarick@raricklaw.com.

Florida Successor Trustee Checklist

By Phillip B. Rarick, Miami Trust Attorney

You are named the successor trustee and the trustmaker has just died. No doubt these are difficult times, but thankfully there are many resources to help. The following is a checklist of initial important tasks to help guide you after the funeral or memorial service.

Note: You are not required to accept the trustee duties. However, if you begin to act as successor trustee you will likely be held responsible for all acts as the trustee to the beneficiaries and the IRS. Therefore, do not begin to take any actions as Trustee before you know what your duties are. Consult a Miami trust attorney and see our 12 Point Summary of Florida Successor Trustee Duties. First Priority Action Items

____ 1. Sign Acceptance of Trustee Duties and Affidavit of Trust

____ 2. Take possession of all legal records including:

• Original trust
• Original will (usually called a pour-over will if decedent had trust)

____ 3. Take possession of all financial records such as:

• Inventory of assets

Note: This may be on paper or on decedent’s computer.

• Passwords to computer, internet media, or social media
• Checkbooks
• Credit cards
• Statements from all banks or financial companies

____ 4. Take possession of all keys or codes to:

• All vehicles or boats
• Safe or bank safe deposit box

Note: Do not allow entry to Safe Deposit Box without a witness and prior discussion of arrangements with a Miami trust attorney. Remember:

• House and other real estate or rental properties
• Storage room

____ 5. Lock and secure all real estate and household contents

____ 6. Engage an experienced Florida trust administration attorney

____ 7. Engage CPA or accountant and determine deadlines for filing tax returns

____ 8. Contact decedent’s Financial Advisor

____ 9. Order minimum of 10 death certificates (these can usually be obtained through the funeral home) and collect documents on Document Checklist.

Click Here for: Document Checklist

_____ 10. Calendar important dates: such as deadline for filing decedent’s final 1040 tax return and 1041 tax return for the trust.

Note: As Trustee, you are liable to the IRS for all trust tax matters.

_____ 11. Buy a notebook and keep track of your time and work on behalf of the trust:

Note: Few beneficiaries will appreciate the time and extensive work of the trustee. To be fully compensated for your time, you likely will need to account for all your time incurred as trustee.

Second Priority Action Items

_____ 12. Complete Master Information List: This is an inventory of all the decedent’s assets and most importantly how they are titled and what, if any, beneficiary designation.

• Contact info@raricklaw.com for List.

____ 13. Open Trust Checking Account with bank

____ 14. Set up Quicken/QuickBooks or similar accounting program

Note: As Trustee you must account for all funds received and all funds paid out. If you are not adept and diligent at accounting, hire a bookkeeper or accountant. Remember as Trustee you will need to provide a detailed accounting to all trust beneficiaries for all trust income and expenses.

____ 15. File Notice of Trust with the Clerk of Court

_____ 16. Determine names and addresses of all qualified beneficiaries with assistance of Trust attorney

_____ 17. Within 60 days of accepting Trustee duties, send Notice of Trust to all qualified beneficiaries; this notice must comply with Florida law

____ 18. Deposit Will with the Clerk of Court

____ 19. Advise Post office to forward mail

____ 20. Cancel utilities, subscriptions

____ 21. Contact homeowner’s insurance and keep insurance current

____ 22. Review insurance for all rental properties and keep payments current

____ 23. If homeowner association, contact and keep payments current

____ 24. Inventory Safe Deposit Box with at least one witness after first consulting with trust attorney

____ 25. Search records for potential creditors

Note: Do not pay creditors until you have ascertained their legal validity and priority. As trustee you have the duty to contest creditor claims that are not valid and pay claims according to their priority. A spouse is typically not liable for the debts of the deceased spouse.

____ 26. Keep current payments to legally valid secured creditors.

____ 27. Determine if any Employee Benefits

____ 28. Contact health care providers, such as doctors, hospitals, clinics and determine if they have accepted Medicare assignment for their services. If they have, then they have agreed to accept Medicare and any other insurance payments for their services. Therefore there should be no reason for them to file a claim in the estate for any unpaid portion of their statement. If we have a list of the Medicare providers, we will prepare objections to any claims they file against the estate.

____ 29. Social Security: If the decedent was receiving Social Security, contact (a) the Social Security Administration to inform them of the decedent’s death; (b) the bank where the social security check is being deposited directly into to inform them of the decedent’s death. The Social Security checks are issued at the first of the month and they are in payment for the previous month. The decedent must have lived the entire month to be entitled to the Social Security check. For example, if the decedent died August 15, and the Social Security check was automatically deposited on September 3, the decedent is not entitled to the September 3 check or any checks thereafter. You must contact the bank and request that they return the check to Social Security. Often the bank does this automatically as a service to customers. If the check is not returned, the Social Security Administration will take steps to collect the check(s).

____ 30. Make a claim for Social Security death benefit if (a) decedent has enough hours worked during his or her lifetime; and is (b) survived by a spouse or dependent child. For additional information contact Social Security at 800-772-1213.

____ 31. Determine if any claims for life insurance or veteran death benefits.

This is a short list of initial tasks for a person who accepts the duties as Successor Trustee. It is not a complete list of tasks. The trustee will only be able to determine all tasks after carefully reviewing all trust instructions with a Miami trust attorney. Attorneys at Rarick Trusts & Wills Law, P.A. have helped many family members navigate these tasks as the Trustee, Co-Trustee or Personal Representative of the Estate. We are ready to help you. Contact us at (305) 709-2858 or email to info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an attorney that is experienced in Florida probate law. Your receipt of information from this website, blog, or Miami trust attorney does not create an attorney-client relationship and the legal privileges inherent therein.

Here is the good news/bad news I received from my bank today regarding my Paycheck Protection Program (PPP) Application: The good news: your application has been approved; the bad: the SBA is out of money and you must wait for Congress to refund the program!

Although I have heard of a few small businesses that have received funding I am guessing that most persons reading this letter have encountered similar frustrations. Note: if you have received funding, please so reply.

We predicted in my first letter regarding PPP that the $349 billion fund would run out of money and this Thursday it did. It lasted two weeks! For an interesting map on where the funds were distributed nationwide see PPP Loan Allocation Map.

My message to you now is don’t give up. Yes, many small businesses with average monthly payroll over $1 million got preferential treatment by the big banks. However, the banks are incentivized under the SBA program to make small loans under $1 million.

And more encouraging: there is strong bi-partisan pressure to refund the program. (If only Congress could stop the bickering and see the urgency of the threats to millions of small businesses.) Regardless, if you have applied and are waiting to get approval, keep checking with your bank to make sure they have all necessary documentation and try to get confirmation your application has been approved. If you have not applied, do so immediately.

My son-in-law is a senior manager for a major regional bank in the western states and is working over-time this weekend to continue to process applications. My bank advisor also tells me she is working this weekend on her bank’s back-log of applications. Both banks believe the program will be refunded. I think that is a good bet.

One of the most common questions I get as a Weston estate planning attorney is, do I need to record my living trust? Some persons believe that a trust needs to be publicly recorded like a corporation or a deed. This is generally wrong; not only is recording not required or needed for most trusts, in most cases recording would negate one of the chief benefits of a trust: confidentiality. Let’s look at more specific questions.

Does a Living Revocable Trust Need To Be Recorded During the Life of the Trustmaker?

The short answer is no. One of the great benefits of a living trust in this era of Google – where is it difficult to keep anything private and out of the public domain – is that a living trust is confidential. It does not need to be recorded, filed, or registered except in certain circumstances I will discuss below. A living trust, properly drafted by an experienced Weston estate planning attorney is a powerful legal instrument to protect the privacy of your personal and financial information.

Does a Living Revocable Trust Need To Be Recorded Upon Death of the Trustmaker?

No. Unlike a Will that does need to be filed with the Clerk of Court within 10 days of death, a trust can allow you to keep personal financial information out of probate. Probate is the legal and very public process many families must go through upon death of a family member. A properly “funded” living trust does not need to go through a public probate process.

Note: Funding of your trust is transferring all major assets to your trust by changing title or beneficiary designation. For example, the primary beneficiary of your life insurance should usually be your living trust. We advise reviewing the funding of your trust at least every three years with a Weston Estate Planning Attorney.

What Are the Exceptions?

The most common exception are real estate truncations, and even in such cases, it is not necessary to record the entire trust. Sometimes in real estate transactions it is necessary to file a Certification of Trust, but this Certification will not contain any personal or financial information about the trust. A Certification of Trust may be required by a title company or bank to prove that the trust exists, the names of the trustees, and that the trustees have powers under the trust to transfer the real estate or secure financing. The Certification of Trust is often a short, 1-3 page document summarizing these key elements.

Take Away Point: Avoid Snooping, Meddling Persons

One of the great benefits of a living revocable trust is that it is private and confidential – it does not need to become a public record; it does not need to be recorded, registered or filed. This is just one reason why a living trust has become the preferred planning legal instrument for most persons. The alternative, a Last Will and Testament, must be deposited with the court and usually must go through a public legal process called probate. Properly funded, a living trust will avoid probate and keep your personal and financial information off of public records and away from snooping persons that may wish to meddle in your affairs.

Many persons are tempted to have a “Simple Will” in which they want everything they own at death to go outright first to their spouse, and if the spouse does not survive then to their children in equal shares. Rather than take the time to consult with a Weston estate planning attorney, many persons are tempted to write the Will themselves, using will forms they see advertised on TV. Read more: 5 Common Mistakes With Florida Do-It-Yourself Wills

In our practice we have seen many so-called “Simple Wills”. Most have big problems that end up costing the family much more fees and causing more stress than if the person had the Will drafted by an experienced Weston estate planning attorney. Here are just four big problems, but there are many more:

1. The Will must go through the Florida probate process. Probate is like a lawsuit: You must file a petition with the court and first prove that the will is in fact the last, valid will of the decedent. Probate in Florida is slow, because it is a bureaucratic process requiring a Florida probate attorney: you cannot act as your own attorney unless the estate is under $6,000. Read more: What’s Bad About Probate

2. The Minor Child Problem. It is always a mistake to give a minor an outright distribution of anything because the court will need to appoint a Guardian Ad Litem – which means your estate will now have to pay for two attorneys. Your child will then need to have a guardianship until the child is 18 years of age. More important, any child is likely to blow the money if they receive an outright distribution at age 18: rather than use the money for a college education they will be tempted to buy a fast car or make some other foolish decision. Read More: Big Mistake Naming a Minor the Beneficiary – of Anything!

3. The Adult Child Who Is A Poor Money Manager. Most persons want their hard earned moneys to go to their children – not to their children’s credit card holder to pay off a credit card debt. There are legal solutions to help ensure that the money is not wasted in this fashion. See below.

4. The Adult Child Who Is In a Shaky Marriage. Just as problematic is the adult child who is in a marriage that is contentious and possibly to end in divorce. Few persons want their daughter-in-law or son-in-law to be a primary beneficiary of their will. Again, with proper planning, there are ways to avoid this, but a Simple Will is not the answer.

The Best Solution

Virtually all people want to give what they have, the way they want with the least possible cost. To achieve these goals, most people need a revocable living trust, not a Simple Will. A well drafted and properly funded living trust can avoid the four problems discussed above. The living trust is simply detailed, legally binding instructions to make sure your savings and nest egg go to your loved ones – and no one else – without going through a probate process. The living trust is also a way to ensure that your hard earned property goes to your children – and they do not blow it or allow it to be claimed by a credit card company or a spouse.

To speak with an experienced Weston estate planning attorney call Phil Rarick at (305) 709-2858.

You have done it. You have guided (or you have survived) your children’s teen years. They are now over 18. They are now “sui juris” in the eyes of the law: this means they are fully independent to make their own legal choices. And you would like to help them to continue to make good choices. Here are three threats most parents are concerned about – especially when it comes to passing on hard-earned savings to your children in event of death.

Threat #1: “My kids will blow it.” How many young persons in their 20’s are good money managers? Would they have the discipline to use it for college or graduate education? Or would they put the money in a hot, new car and lavish life style?

Threat #2: Creditors or College Debt will eat it up.

Threat #3: Your adult child gets married and a new spouse will grab it.

How to Protect Your Children After 18

The answer is a living trust with a Protective Safe Harbor Trust for each child. Think of your living trust as a chest of drawers. A Safe Harbor Trust is simply another drawer in this chest. Each child can have a separate drawer or trust. The Safe Harbor Trust would make sure your monies are managed at your death by a person you trust who must follow your instructions. The trustee’s job would be to make sure the money is used in a wise and prudent way for your child’s (1) Education; (2) Health; (3) Best interests: such as a car (maybe a Honda) if needed to get to work while in college.

Take Away Point

The Safe Harbor Trust can help your child from blowing these monies, from a creditor trying to attack it, or from a new spouse trying to get it. You work hard for your savings; you want to protect every dime. For these reasons, every parent with children should consider a Safe Harbor Trust.

For more information, contact Phil Rarick, a Weston estate planning attorney, at (305) 709-2858 or info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Weston estate planning attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

You are named the personal representative (or executor in other states) and a loved one or family member has just died. No doubt these are difficult times, but thankfully there are many resources for help. The following is a checklist of initial important tasks to help guide you after the funeral or memorial service.

Note: You are not required to accept the Personal Representative duties. Before you can legally act on behalf of the estate you will likely need to secure Letters of Administration issued by a Florida probate court that officially designate you as the legal authority in charge of the estate. Therefore, you should not take action as Personal Representative before you know your duties and what potential claims you may face from estate beneficiaries and creditors. Consult a Miami probate attorney and see our 10 Basic Legal Rights for Beneficiaries Under a Florida Will.

First Priority Action Items

____ 1. Take possession of all legal records including:

__ Original will and all amendments or codicils

Note: If decedent did not leave a will, the beneficiaries will be determined according to Florida intestate law. See Dying Without A Will In Florida.

__ Tangible Personal Property Memorandum or writing indicating instructions for distribution of tangible personal property (such as jewelry, furniture, cars)

____ 2. Take possession of all financial records such as:

__ Inventory of assets if available

__ Passwords to computer, internet media, or social media

__ Checkbooks

__ Credit cards

__ Statements from all banks, financial companies, or financial advisors

Click here for the complete checklist: Florida Personal Representative Checklist

This is a short list of initial action items for a person who accepts the duties as Personal Representative. It is not a complete list of tasks. The Personal Representative will only be able to determine all tasks after carefully reviewing the will, if there is one, with a Miami probate attorney. Attorneys at Rarick Trusts & Wills Law have helped many family members navigate the bureaucratic Florida Probate process as the Personal Representative. We are available to help you. Contact us at (305) 709-2858 or email to info@raricklaw.com.

Special Note:

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult a Miami probate attorney that is experienced in Florida probate law. Your receipt of information from this website, blog, or Miami probate attorney does not create an attorney-client relationship and the legal privileges inherent therein.

The person in charge of making sure the property distributions in the Will are satisfied according to the instructions of the decedent is called a “Personal Representative” (referred to in other states as an “Executor”). The Personal Representative (or “PR”) has numerous fiduciary duties that run like a laser beam to the beneficiary. Here are some of the most important:

1. You have a right to secure a true copy of the Will. The original will must be deposited with the court within 10 days of notice of death by whomever has custody of it. F.S. 732.901

If you receive a Notice of Administration from the Personal Representative, it is strongly advisable to immediately request a copy of the Will from the PR.

Note: If the decedent did not have a will, your rights are determined – and protected – according to Florida intestate law. See a Miami probate attorney to help determine your rights and visit our previous article Dying Without a Will in Florida: Who Gets What? for more information.

2. You have a right to receive a Notice of Administration from the Personal Representative that will provide valuable information but will also establish a deadline as to when you can object to the Will. See #3 below. F.S. 733.212

3. If you believe the Will is not the true last will of the decedent, was executed when the decedent lacked capacity to understand what he or she was signing, or was secured as a result of undue influence, you have a right to contest the validity of the Will offered to probate.

Note: If you receive a Notice of Administration, your deadline for challenging the Will is 90 days after receiving said Notice. F.S. 733.212(3)

4. You have a right to see the inventory of the estate. The inventory must be filed within 60 days after the Personal Representative is appointed by the court and receives his or her Letters of Administration. F.S. 733.604??

5. You have the right to receive a detailed accounting filed by the Personal Representative pursuant to F.P.R. 5.345. If the PR has not filed an accounting, you have a right to compel the PR to do so. F.P. R. 5.150 Lastly, you can object to an inventory or accounting filed by the PR.

6. You have the right to Petition for the removal of the Personal Representative. F.S. 733.506.

7. You have the right to petition for an interim distribution. F.P.R. 5.380; F.S. 733.612(26)

8. You have the right to receive an inventory of safe deposit box F.P.R. 5.342

9. You have the right to petition for determination of homestead status of real property. F.P.R. 5.045. Such a petition is often advisable to shield the decedent’s primary residence from claims of creditors.

10. You have the right to petition for a decrease in the Personal Representative’s compensation. F.S. 733.617

This Report is only a summary of the key rights a beneficiary possesses under a Florida Will. It is not a complete list of rights. For more information, contact Phil Rarick, Miami probate attorney, at (305) 709-2858 or info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami probate attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

Most divorce judgments call for one of the parties to obtain a life insurance policy for securing the payment of child support, alimony or some other financial obligation. Let’s assume the obligation is solely child support: a potential mistake is failure to secure payment of the policy premiums by use of an irrevocable Children’s Safe Harbor Trust structured as a spendthrift trust.

For securing the payment of child support, the settlement agreement should have specific language that may read as follows:

Larry shall establish an Irrevocable Children’s Safe Harbor Trust (“Trust”) to secure the payment of his child support and other financial obligations set forth herein. Within 10 days of execution of this Agreement, Larry shall transfer sufficient funds to the trustee of the Trust to purchase a term life insurance policy with a face value of $750,000 for a term of 10 years. The Trust shall be the owner and sole beneficiary of the insurance policy. The initial trustee of the Trust shall be [CPA, attorney, or independent third party]. The sole beneficiaries of the Trust shall be the children named herein. Said Trust shall be structured to (a) provide for the education, health, maintenance, support, and best interests of the children; (b) to protect the proceeds from creditor claims of Larry, the wife, or the children; and (c) comply with all of Larry’s financial obligations to the children as set forth in this Agreement. [Said Trust is attached hereto and fully incorporated herein.]

The Safe Harbor Children’s Trust could help insure that the policy does not lapse if Larry does not have sufficient funds to purchase the policy outright, but rather needs to pay on a monthly schedule. If a premium payment schedule is needed, it would be wise to have Larry prepay at least 3 months of premium in advance to the Trustee. The trustee would be required to notify the wife if funds for payment of the premium fall below a required minimum balance.

Such monies would be held by the Trustee to ver non-payment and give the wife time to compel the Husband to make payments. An alternative would be to purchase a life policy with the premiums guaranteed.

Note: Larry would want the trust structured to maximize his annual gift tax exclusion of $18000 per beneficiary in 2024. This is accomplished in the trust terms by use of what is known as “Crummey Powers”. Using such powers and assuming Larry has three children, he could annually transfer tax free $42,000 and not be required to file a Form 709 gift tax return.

How We Can Help

The primary focus of Rarick Trusts & Wills Law is trusts of all kinds and estate tax planning. As Miami trust attorneys, we have many years of experience in working with family law attorneys. We are available to consult with you and welcome any questions or comments. For more information, contact Phil Rarick at (305) 709-2858 or info@raricklaw.com. Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

A Living Will is not a will and it is not a living trust. It is simply detailed, legally binding instructions to your physician that you do not want to be maintained in a persistent vegetative state if there is zero possibility of recovery.

The term “living will” is confusing because it is not a will. A better name is Declaration Regarding Life Prolong Procedures. Such a Declaration is important to most persons because, at the end of life, they do not want to maintained in a vegetative state if there is absolutely no possibility of recovery.

A living will is not a living trust. Although sounding similar, these critical legal instruments are completely different. A living trust is a fundamental estate planning legal tool. It provides a plan to care for you in the event of mental incapacity, and it can be a complete substitute for a will by detailing your instructions upon death for giving your hard earned property to whom you want and when you want.

A good living will is a crystal clear statement and instructions to your physician that life prolonging procedures are to be discontinued if the person is in a terminal condition, or end state condition, or persistent vegetative state, and if the attending or treating physician and another consulting physician have determined that there is no reasonable medical probability of recovery from such condition.

Note: No one person can make the decision to discontinue life prolonging procedures. Florida law requires at least two physicians and most Declarations require the concurrence of your health care surrogate. You may appoint more than one health surrogate.

A good Declaration (or Living Will) has a strong statement instructing that everything is to be done to minimize pain. The Declaration should contain a statement that administration of pain-relieving drugs, and surgical and medical procedures, as well as unconventional pain-relief therapies are to be used. This means that your health care surrogate is not constrained by a bureaucratic decision of the Food and Drug Administration when it comes to administering pain relief therapies. Rather, you are placing your trust in the judgment of your spouse, family member or friend whom you have appointed to be your health care surrogate.

Conclusion

Although not a will or a living trust, a “living will” is a Declaration Regarding Life Prolonging Procedures. It is a critical legal instrument that should clearly reflect your wishes in the event you are in a persistent vegetative state and there is not possibility of recovery. Some persons are concerned that even with such a signed Declaration the physician may not respect your wishes. This is why it is important to have the Declaration drafted by an experienced Miami estate planning attorney. Properly drafted and executed, the physician has no choice but to follow your wishes. For more information, contact Phil Rarick, Miami trust attorney, at (305) 709-2858 or info@raricklaw.com.

Special Note

The information on this blog is of a general nature and is not intended to answer any individual’s legal questions. Do not rely on information presented herein to address your individual legal concerns. If you have a legal question about your individual facts and circumstances, you should consult an experienced Miami trust attorney. Your receipt of information from this website or blog does not create an attorney-client relationship and the legal privileges inherent therein.

A living trust is simply detailed, legally binding instructions to care for you and your family. There are three key players in a trust. First, the Trustmaker or grantor; this is the person who makes the trust. Second, the Trustee, whose job is to follow the instructions of the trust exactly and to the spirit of the trust. The third role are the Beneficiaries. The Trustee’s fiduciary duties run like a laser beam to the beneficiaries: every penny of the Trust must be used in the best interests of the beneficiaries.

Initially, you can act in all three roles in your living trust: You can be the trustmaker, trustee and beneficiary. Your spouse, children, or other loved ones can also be beneficiaries.

Your living trust is revocable – you can change your trust instructions anytime you wish. There is only one person in the world who can change your instructions: you. In the event of your temporary or permanent mental incapacity, or upon death, the trust locks in and becomes irrevocable so that no one else can change it.

Note: To achieve the objectives noted here, your trust must be properly drafted by an experienced Miami trust attorney and funded by transferring your assets to the trust. Funding of the trust is essential to achieving the trust purpose. Your key assets must be titled in the name of the trust or flow into the trust because the trust is the beneficiary of your account. If you have a living trust, and you have not reviewed the trust funding within the past several years with your attorney, it is likely time to do so.

For more detailed information see our paper: Understanding Living Trusts For Florida Residents. Take-Away Points

1. Every person, whether you have $100,000 or $1 million, should likely have a living trust rather than a will. A will must usually go through the costly, bureaucratic court system known as probate. A trust, properly funded, can avoid probate.

2. A living trust is important to keep legal control in the family – and avoid court intervention in the form of guardianship or probate.

3. A living trust provides detailed instructions to help insure that your hard earned money goes to your children or other loved ones – and not to their spouses, or creditors. Just as important, your trust instructions can help insure that your children receive a first-rate college education to help them compete in our new global economy.

Note: Non-resident aliens and certain green card holders are still subject to a lifetime limit of only $60,000.

The Problem: These lifetime exemptions are scheduled to revert to $1,000,000 ($2,000,000 per couple) at the stroke of midnight on December 31, 2012. The tax rate on gifts over those amounts will also increase from the present cap of 35% to a whopping 55%. II. Action Items

If your estate is likely to be worth more than $1,000,000 ($2,000,000 if you’re married), now is the time to act: every dollar you give away this year (while the exemption is high) is one less dollar on which your estate will pay taxes. Of course, you need to keep an ample amount of assets to provide a healthy cushion to support your life style. Therefore, assuming that you’re not likely to run out of money during your own lifetime, you can make sure your children and grandchildren don’t receive less inheritance due to hefty estate and gift taxes going to the IRS.

Other Options. Be aware there are techniques whereby you can take advantage of the $5 million gift this year such that your spouse retains the benefit of the gifted property during his or her lifetime. By doing this, your spouse retains access to the funds for his or her lifetime. For more information on this option, contact Miami estate planning attorney Jay Beskin or Phil Rarick at (305) 709-2858. Stay tuned for a future blog on this option.

As we come closer to the end of the year, more people will be scrambling to lock in these exemptions by making gifts. Based on our present volume of work, I anticipate that anyone who hasn’t made an appointment for advanced gifting by the end of September will risk not having it done by the end of this year.

Rarick, Beskin & Garcia Vega has been trusted by over 400 law firms and many families during the past 18 years for estate planning, trusts, and probate cases. To schedule an appointment, call (305) 709-2858 or email info@raricklaw.com.