Estate Planning is a term bandied about by almost everyone, but very few – including many professionals – truly understand what this term means and how to effectively employ it in your life.  What is even more maddening is that too many people get their Estate Planning advice from people who do not have any real-world experience or knowledge of what good estate planning entails.  The end result is either no estate plan or a poorly drafted estate plan that does little to address issues the “testator” (person creating the estate plan) wanted to address or fails to address issues the testator never knew were possibilities.

Estate Planning when done well can garner tremendous benefits, but when done wrong can result in loss of assets, expensive legal fees and devastated family relationships.  The following is presented as a general overview of what effective Estate Planning entails and why it is so important it be done correctly.

At Marshall Law we believe estate planning should done with a client-centered approach that takes into consideration the following:

  •  Every client is unique;
  • Our first job is educating clients, drafting documents is secondary; and
  • We want to build relationships, not treat clients as transactions.

This is where I believe Marshall Law is different than other estate planning law firms, and we take this approach is because we know plans only work if they are followed, but if clients do not understand their plan, do not feel their plan accurately reflects them and their values, and do not believe we treated them as anything other than a revenue source, then their estate plan will eventually fall by the wayside and become a hinderance rather than a benefit.  I say this because I regularly meet with clients whose estate plans are old and are outdated, leaving clients exposed to issues they never knew their estate plan did not address.  Is this the client’s fault or the attorney’s fault?  Well, likely both.

If the attorney never took the time to tell the client about changes in the law that affected their estate plan, then how can the client know an update is needed.  Likewise, if a client does not alert the attorney to changes in their life, how can the attorney provide proper legal advice.  The only way to build an open and continuing dialogue is to build a relationship that allows for the free flow of information between both parties.  This is what we want in our estate planning practice, and the type of clients we want to work with.

As you read through the information provided below, keep in mind our approach and why are best suited to address your estate planning needs.

An “Estate Plan” is the blueprint for managing your personal affairs if you become incapacitated during your lifetime, and for addressing the needs or wants of others after your death.  Estate Planning is not a document, or even a series of documents; those are merely the tools by which your estate plan is accomplished.

A good estate plan will be crafted to specifically address your personal needs, your family and other relationships, and the assets you have at your disposal – we are all individuals and our respective estate plans should be crafted to address our individuality.  Therefore, estate planning should take into consideration numerous issues which include, but are not limited to, the following:

  •  Do you have any special needs;
  • Do you have any children or family members with special needs;
  • What are the tax implications of transferring or possessing certain assets;
  • Do you have any present or anticipated health issues;
  • Do you have any charities you want to provide for;
  • Are there people you trust or distrust and how do you want them involved in your decision-making;
  • Is there a particular family issue that needs to be addressed; and/or
  • Are there creditor issues you or a family member is facing.

Throughout the entire estate planning process, the focus should be on addressing issues we know about while also building in flexibility to address the “unknowns” that can (and most likely will) come up in the future.  Failure to properly address issues will certainly result in additional fees and costs later on when time is of the essence.

If you are ages 18 and over, then you need an estate plan.  This is because once a person reaches the age of 18 they are legally considered an adult, the natural rights of parents are no longer present and therefore the ability to manage the assets or health care of a person who is 18 and over are no longer authorized by law.

Nonetheless, just because someone is 18 does not mean they need the same estate planning services as someone who is 48, just as a 48-year old’s estate planning needs are different than someone who is 78.  The person for whom estate planning is being done needs to be the centerpiece of the plan, and that plan must consider their unique circumstances.

Too many people think of estate planning as addressing only what happens after they die; in short, how will their assets be distributed.  This limited approach to estate planning fails to recognize that most all of us will suffer from a period of incapacity prior to death, during which time we will require the assistance of others.  Therefore, at Marshall Law, we always take into consideration your lifetime needs.

 So what lifetime needs are there? 

First, no matter what mental or physical state you are in your bills must be paid and your finances managed.  A good estate plan will equip someone you trust with the authority they need to pay your bills and manage your finances.  Having the opportunity to make the decision for yourself is key, otherwise you put yourself at the mercy of a court to make the decision for you, which always carries with it the risk the court will put someone you do not know, or do not trust, in charge of your finances.  To do this we must have the proper documents in place to keep the courts at bay and prevent – the fullest extent possible under the law – those you do not trust from interfering in your life.  The tools most associated with addressing these issues are a Durable Power of Attorney and a Revocable Living Trust.

Second, we never know what tomorrow holds, so if you become incapacitated we need measures in place to ensure your medical needs are met.  A good estate plan will incorporate the appropriate legal documents to ensure if you cannot make your own health care decisions the person (or people) you choose will be equipped to make your health care decisions for you.  Once again, we want to avoid situations wherein a court appoints someone who does not know you – or does not share your personal beliefs and opinions regarding health care – to make those decisions for you.  The tools most associated with addressing these issues are a HIPAA Waiver, Designation of Health Care Surrogate and Living Will.

One of the greatest benefits of addressing your lifetime estate planning needs is the avoidance of court appointed guardians.   Under Florida law, the courts must give primary consideration to the people you name under a Durable Power of Attorney for management of your financial affairs, and the people appointed under a Designation of Health Care Surrogate for decisions regarding your health care.  If you have family members you do not want involved in your decision making, having the right documents in place – with the proper language and prepared by an attorney who documents the process to substantiate your plans if challenged in court – can be the difference maker between being at the mercy of others or being subject to those you trust.

This is often where people are most focused during the estate planning process, which makes sense because we should all be concerned about the effect our death will have on others and the “stuff” we leave behind.  Unfortunately, too many people simply think in terms of making quick distribution to beneficiaries without considering the effect those distributions can have.

In every estate planning situation there needs to be a conversation about each beneficiary that includes, but not limited to, their indebtedness, financial stability, potential creditors, marriage situation, addiction issues, their maturity, whether they have children or not, are they disabled and receiving government benefits, etc.  These are real issues that affect us all, and through careful planning we can be sure to turn your estate plan into an “asset” and not a “liability” that affects those you seek to benefit.

Too often people approach estate planning by telling me what documents they want drafted before we even discuss their estate planning goals.  This is, however, the wrong approach.  The documents and methods used to accomplish a client’s estate planning objectives should be considered last – not first.

Estate planning documents are the “tools” used to accomplish your estate planning “blueprint” (as discussed above).  There are a number of tools available which include, but are not limited to, the following:

  •  Revocable Living Trust;
  • Irrevocable Trusts;
  • Last Will and Testament;
  • Ladybird Deeds;
  • Quit Claim Deeds;
  • Pay on Death (“POD”) or In Trust For (“ITF”) designations;
  • Beneficiary designations on financial accounts and life insurance;
  • Durable Power of Attorney;
  • HIPAA Waiver;
  • Designation of Health Care Surrogate; and
  • Living Will.

These tools should be used in conjunction with each other and through the coordinated efforts of your attorney and your other financial professionals.  Using a haphazard mixture of these tools without coordination spells disaster and could mean your plans do not come to fruition.

There are many estate planning self-help programs out there, including numerous “forms” available for download off the internet.  The problem with such programs and forms is they are unlikely to be Florida specific.  Florida has its own unique laws, many of which are not found in other states.  These laws can differ on numerous issues, from the manner in which a testamentary document must be signed to the nature of how assets are titled.  The end result is that using self-help programs or forms without verification they are Florida specific likely will result in problems later that come with a much higher price tag to fix than the cost savings people thought they were receiving.

For example, several years ago and client hired me to handle the administration of her brother’s estate.  She and her brother used an estate planning program they bought at a local office supply store.  The document contained unclear terms, failed to include an attestation statement, and did not address the nature of the decedent’s homestead property and its exemption under the Florida Constitution.  Ultimately the costs were much higher than most similarly situated probate estates because we had to get a commissioner appointed to obtain the witness statements just to prove the Will to the court, and because the Will did not properly address the homestead property the exemption from the claims of creditors was lost under the Florida Constitution.  This resulted in a very long probate process, much higher fees and costs than normal, and loss of assets to creditor claims that otherwise would have been protected.  Why?  Just to save a few dollars up front.

 Be careful, so called “low cost” estate planning alternatives rarely ever result in lower costs.

Unfortunately, unless you become incapacitated or die within a few years after your estate plan is prepared, it is probable changes will need to be made to keep your estate plan on track.  The reason for this is twofold:

  1.  The issues your estate plan is designed to address will change over time. This is because people get married, get divorced, have kids, have grandkids, change jobs or retire, move, personal incomes go up or down, etc.  It is highly unlikely the circumstances you were facing when your estate plan was first created will be the same years down the road.
  2.  Laws affecting your estate plan are constantly evolving. When I first began estate planning each citizens received a $2.0 million exemption from federal estate taxes, and if you did not use the estate tax exemption at a person’s death it was lost.  Today, each person has an $11.75 million exemption from estate taxes with the ability to carry-over the decedent’s unused exemption onto their spouse’s exemption (combined for a $23.25 million total estate tax exemption).  Sounds great, except the current federal estate tax laws are already due to sunset at the end of 2024, assuming Congress does not change those laws even sooner.  This is just one of many such changes that occur on almost an annual basis that could affect your estate plan.

When it comes to the issues discussed under paragraph #1 above, you will know what changes are happening and it is incumbent upon you to contact your attorney to find out how those changes may affect your estate plan.  For the issues discussed in paragraph #2 above, you need an estate planning professional who will take the time to let you know when laws change and if those changes affect your plan.  In both circumstances, estate plans need to be updated to keep them capable of accomplishing the goals you want to achieve.

The cost of a good estate plan will be dependent on the planning objectives to be met and the tools used to accomplish those objectives.  While we maintain a price list for each of the estate planning “tools” we use in preparing an estate plan, we only use that price list to calculate the fee after a plan has been outlined that meets each client’s unique plan.

This is not the manner by which other estate planning attorneys handle their practices as they will provide you a price list and allow you to pick a plan based on cost – meaning you get a prepackaged plan not custom tailored to you and your unique circumstances.  Is that okay?  Well, that is entirely up to you.  At Marshall Law, however, we believe prepackaged plans not custom tailored to our clients’ unique and personal needs leaves too many unaddressed issues that may end up costing more money down the road.

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Estate Planning goes far beyond “documents”, it is a process that requires a clearly defined objective(s) coupled with a custom-tailored plan utilizing various techniques and documents to ensure your needs both during life and after death are met.  If you want a professional who has dedicated his legal career to providing the best in estate planning services then contact Marshall Law today at (352) 432-8859.

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