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Pensacola Estate Law Blog

Detailed estate planning to cover all situations

When most people in Florida think about estate planning, they tend to focus on long-term issues and avoiding probate court. One example of this focus is trusts that direct trustees to make distributions based on milestones, such as children graduating from college. While this type of traditional estate planning is important, it does not address potential issues that may unexpectedly arise.

In some situations, couples want to ensure that their minor children are looked after by relatives who live out of state. While this is a guardianship issue that can certainly be addressed as part of the estate plan, it does not specify who should look after the children in case the parents suddenly pass away, and their relatives cannot travel immediately. This is when detailed estate planning comes into play. Absent a legal document that provides instructions as to who should look after the children before guardianship is ordered in court, the kids will have to be cared for by the state.

Choosing the right people for roles in an estate plan

Some Florida residents who are creating an estate plan may make mistakes in terms of who they appoint to fulfill various roles. A plan may have an executor, agents to deal with financial and health care issues, and a trustee if there is a trust. There might also be various people chosen to manage Social Security benefits, long-term care insurance and the funeral.

There are a number of potential pitfalls with these choices. One is there may be several overlapping responsibilities. Another problem is that sometimes people are not informed that they have been chosen for these roles, and some of them might be unqualified. This lack of qualification could be because a person lacks the financial or legal acumen to carry out the duties, or it could be because the person is unlikely to be able to manage any conflict that may arise, including a conflict of interest.

About business succession plans

Small business owners in Florida should have a business succession plan to ensure that their business is well taken care of when they decide to retire. For those who are nearing retirement, there are some steps they can take to develop a successful plan.

One important part of creating a business succession plan is deciding on a successor. Successor options may include a certain family member, business assistant or business partner. Business owners should realize that if there are several people to choose from, it is likely that there may be some resentment by those who were passed over, no matter who is designated as successor.

Why children shouldn't inherit a business

Business owners in Florida may feel as if they have either to pass down their companies to their children or sell them. However, it may be possible to allow future generations to benefit from the success of a business even if they aren't the ones running it. Those who own a company may want to first determine if their children are qualified to run the business.

If not, it can be a good idea to talk with key employees or other advisers about a succession plan. This plan will determine who takes over the company after the current owner chooses to retire or otherwise walk away from it. By keeping the organization alive, it allows an individual the chance to maintain his or her legacy while also ensuring that the company is run properly. It is important to consider relationships between family members when creating a succession plan.

Revocable v Irrevocable trusts: Determining which is best for you

Of the many trust options you have, revocable and irrevocable trusts are oftentimes popular for their ability to help families avoid probate proceedings. Both irrevocable and revocable trusts have their advantages.

Read on to learn about the benefits of each:

Funding a trust to plan for the future

Trusts can be a popular vehicle for people in Florida looking to plan for the future and direct the use of their assets. By setting up trusts, people can benefit from avoiding probate and set up clear plans for the disbursement of their funds. However, creating the trust itself is only the first step for people to take when they want to take this route as part of their estate plans. Funding the trust is essential in order for it to operate properly.

For example, a trust that will include real estate requires the property to be re-deeded to transfer the title of the real estate from the owner to the trust. The owner will now hold title to his or her property as a trustee of his or her revocable trust. Once this deed is properly recorded, the trust will be funded with this real estate. Once this is done, it can be important to check in with the county as it may be necessary to re-file for tax exemptions under the new ownership structure. It can also be important to report the change to the insurer that provides a homeowner's policy.

About charitable trusts

Charitable trusts may be ideal for Florida residents who want to ensure that their favorite charities are able to benefit from some of the wealth they have accumulated. Donors can also take advantage of the tax incentives charitable trusts can provide. However, it is important that individuals who want to use the trusts be aware of how they differ from other types of trusts.

One of the main ways charitable trusts differ is that they are not required to name a specific beneficiary. The beneficiary of a charitable trust can be the general public who will benefit economically and socially from the proceeds of the trust. While a specific corporation or individual beneficiary does not have to be named, there must be a description of the purpose that will benefit the public.

Estate planning is a must during divorce proceedings

Going through a divorce in Florida is always difficult, particularly when support and custody issues are thrown together with marital property division. For this reason, it is easy to overlook something as important as estate planning during a marriage dissolution. In many cases, spouses who know or assume that they are beneficiaries of an estate plan will stay silent on this issue, perhaps hoping that everything will stay the same after the divorce is finalized.

The bottom line of estate planning during a divorce is to keep in mind that spouses retain certain legal rights. Nonetheless, this does not mean that people are precluded from trying to exert control over their assets as much as they can. If there is no estate plan in place, divorcing spouses should think about the worst-case scenario: passing away in the midst of the proceedings and all assets going to the surviving spouse according to Florida intestacy laws. If there is a plan in place, this would be a good time to start reviewing it.

Explaining special needs trusts and the three different types

The basic purpose of a trust is to make things easier for loved ones. When loved ones in Florida has special needs, a special needs trust can be set up to supplement benefits received from government programs. When properly established, a special needs trust can allow the beneficiary to continue to receive government benefits while also having access to additional funds from a trust. There are three types of special needs trusts that the party supplying the funds may consider.

If estate planning involves a first-party special needs trust, assets that may include an accident settlement or inheritance are held for the beneficiary. With a third-party option, the trust holds funds from other individuals wishing to help support the beneficiary with special needs. This usually includes parents and other family members. If there are multiple beneficiaries with special needs, a pooled trust can be created to hold funds. Charities usually set up this type of trust.

What happens in probate court?

It can be very difficult for anyone to lose a loved one. Not only are people struggling with grief and sadness, but there can be confusion regarding the legal process that follows a person’s death.

For instance, you might be wondering what is probate and what happens to your loved one’s estate?

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