We Can Help You Plan for and Protect Your Loved Ones and Your Assets
Regardless of the economy, the top four reasons that clients see Estate Planning Lawyers are:
- to avoid probate,
- provide for incapacity,
- minimize estate taxes and
- prevent family disputes associated with not having an estate plan.
As society has changed, clients face new sets of challenges in accomplishing these goals. Estate planners have responded by creating new tools and strategies to address them. Modern Estate Planning involves implementation of these new tools and strategies, together with traditional drafting, to arrive at practical, common sense approaches to situations encountered across the current palette of social issues.
The following is a short-list of the types of problems we have have seen developing a new urgency, and the tools created in response:
Couples With Children from Prior Marriages – Friction often develops between and amongst them, and administration of traditional trusts becomes problematic and litigious with the fees and costs depleting the estate. Consider strategies that will separate the interests of factions that have or may develop. Particular concern is the stress that may develop between a current spouse and children from a prior marriage.
Adoptions, Out-Of-Wedlock Children, Estranged Children – Modifications to documents are often required to specifically include or exclude these situations.
Planning for Incapacity -The type of incapacity most likely to affect any of us is dementia. Approximately 5.3 million people in the US have Alzheimer’s. Alzheimer’s is the 7th leading cause of death. The annual cost to our society is 172 billion dollars, and 10.9 million unpaid caregivers bear most of the burden. (Source-Alzheimer’s Association’s 2010 report). With children living in other estates and countries, traditional support is just not there. All of this has put incapacity planning in the forefront, and the most effective tools for incapacity planning are the Revocable Living Trust, Durable Power of Attorney and Designation of Health Surrogate, and Designation of Pre-Need Guardian.You should be aware, however, that not all Revocable Living Trusts are created equally, since some either don’t mention disability planning at all or provide for very limited planning. If you already have a Revocable Living Trust in place, you should check with your West Palm Beach estate planning attorney to insure that it contains the proper language to take care of you and your property if you become mentally incapacitated. Or, if you’re in the process of setting up a Revocable Living Trust, then you should ask your estate planning attorney to include a comprehensive disability plan in your trust.
Corporate trustee – Use of a corporate trustee to manage assets provides financial accountability, record-keeping, avoids theft and gross mismanagement and the experience to stand up to demanding beneficiaries. Trust Advisor – Incorporation of langugae into your trust documents that provides for a succession of “Trust Advisors”. The Trust Advisor’s role oversee the actions of the Corporate Trustee, particularly where the Corporate Trustee has broad discretion. The Trust Advisor might be the family member or trusted advisor you would otherwise consider for the position of trustee.
Health Care Costs – as health costs have risen, with no clear picture of the future, assets are increasingly taken by the government, or access to government programs is withheld spend down of your assets, often leaving the well-spouse destitute.
Divorce – Approximately 50% of new marriages end in divorce. Trust provisions that require outright distribution to children and grandchildren at specific ages make those assets available to divorcing spouses – essentially, your assets go to your daughter’s husband whom you have never met. We often propose that some assets be held in a continuing trust. For example, a home can be purchased and held in the trust for the benefit of the beneficiary, rather than distributing funds to the beneficiary directly.
Creditor Issues – Trust provisions that require outright distribution to children and grandchildren at specific ages make those assets available to creditors. We often propose that some assets be held in a continuing trust. For example, a home can be purchased and held in the trust for the benefit of the beneficiary, rather than distributing funds to the beneficiary directly.
Dis-incentives – Traditional provisions for distribution of principal and income to children and grandchildren have often acted as a dis-incentive to hard work and achievement. Incentive Provisions can be drafted to provide that the trust will match income earned by the beneficiary, by whatever percentage you establish.
Social Security – With this and other government programs constantly being at political risk, a trust that holds some assets for a beneficiary until their retirement, and then pays out like an annuity, may be considered, or the trust can purchase and hold an annuity. The latter strategy can provide protect against investment risk by the trustee, and minimize administrative responsibility.
Substance Abuse in Children and Adults – Mandatory distributions of income and/or principal can destroy these individuals – we often suggest that a trustee be given discretion to require mandatory testing and treatment as a condition of continued payments.
Asset Protection For You – With many people having suffered severe losses in the last few years, and government programs being subject to political whim, many clients are seeking creditor protection and a guaranteed source of income in their later years. In Florida, annuities and life insurance are protected from creditors.
Married Couples with Pre-nuptial Agreements – As the divorce rate has increased we see a greater number of couples coming in for estate planning with pre-nuptial agreements. Care must be taken not to disrupt the workings of the agreement, but in any event, the planner must review these agreements.
Unmarried Couples – increasingly couples are establishing non-traditional relationships. Traditional estate planning has taken advantage of provisions that are available only to persons who had a marriage recognized by law.
To learn more about any of these issues, please contact Gregory C. Picken today.