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During estate planning, you may explore various options for passing assets on to your children, grandchildren, or other loved ones. Two popular methods include creating a will or establishing a living trust.
A living trust allows you to transfer assets to designated beneficiaries. One of its key advantages is that you maintain control over your assets while you’re alive. You can adjust the trust, adding or removing assets or beneficiaries as your wishes change.
Perhaps the most significant benefit of a living trust is that it bypasses probate, unlike a will. Probate is the legal process of validating a will, which can be time-consuming, expensive, and public. With a living trust, your beneficiaries may receive their inheritance more quickly and privately, as trust details are not part of the public record.
The main drawback of a living trust is the initial cost. It costs more to set up than a standard will, especially if your estate is complex. Attorney fees can also increase based on the complexity of your financial situation.
It’s important to note that placing assets in a living trust won’t provide tax benefits. You will still be liable for any taxes you would normally owe on those assets.
A living trust may be a valuable tool for estate planning, but it’s essential to consult with your family and an attorney to determine if it’s the best option for your circumstances.
A will has no legal authority until after death. So, a will does not help manage a person’s affairs when they are incapacitated, whether by illness or injury. A will does not help an estate avoid probate. A will is the legal document submitted to the probate court, so it is basically an “admission ticket” to probate. A will is a good place to nominate the guardians of your minor children if they are orphaned. All parents of minor children should document their choice of guardians. If you leave this to chance, you could be setting up a family battle royal, and your children could end up with the wrong guardians.
There are various strategies and tools available in estate planning, such as wills, revocable living trusts, irrevocable trusts, durable powers of attorney, living wills, and advance health care directives, among others. Unfortunately, many people overlook this critical step in securing their family’s financial future. By preparing a well-considered estate plan, you position yourself ahead of those who fail to plan at all. It often comes as a surprise to learn that without an estate plan, Florida law will determine how your assets are distributed after your death—and the State’s plan is often not what you would have chosen. A properly drafted estate plan ensures that your wishes take precedence over the State’s default plan.
Discussing estate planning with family is crucial, particularly as parents grow older. These conversations help ensure that everyone’s wishes are respected and that potential conflicts are avoided. Initiating these discussions early on can provide peace of mind for the entire family. Involving adult children in these talks is essential for maintaining an up-to-date and comprehensive estate plan.
Including adult children in the estate planning process is vital as parents age. Health and financial circumstances can change, necessitating updates to estate plans. Adult children can help ensure that these plans accurately reflect current needs and desires. Early discussions also help sidestep the complexities of probate, which can be time-consuming, expensive, and stressful.
Probate is the legal process through which a deceased person’s estate is managed and distributed. Without the proper estate planning documents, an estate will go into probate upon death, which can lead to several challenges:
By having the right estate planning documents in place, families can avoid the pitfalls of probate.
Approaching the subject of estate planning with aging parents requires sensitivity and respect. Consider the following tips:
To ensure clear and productive discussions:
When discussing estate planning with your parents, it’s important to cover the following:
Consulting with legal and financial professionals is essential to make sure that all aspects of the estate plan are legally binding and financially sound. It’s advisable to review the estate plan regularly, particularly after major life events or changes in the law, to keep it current and effective.
Making estate planning a family affair ensures that everyone’s wishes are honored and helps prevent future conflicts. Approach these discussions with care and a shared commitment to respecting each other’s wishes. A well-prepared estate plan not only helps avoid the complications of probate but also offers peace of mind for the entire family.
Ready to begin the conversation about estate planning with your family? Contact Carol Lawson PA today at (727) 410-2705 to schedule a consultation and receive expert guidance on creating a comprehensive and respectful estate plan.
Adding a name to a deed is a significant legal action that transfers ownership or a portion of property ownership to another individual. Often, individuals opt to bypass legal counsel and handle the deed themselves. It may seem straightforward—pick up a form from an office supply store, fill it out, and record it. What could possibly go wrong? Quite a bit, actually.
One unintended consequence is when new spouses, relatives, non-relatives, such as boyfriends, girlfriends, or friends, are added to the deed, and the relationship sours, removing that individual from the deed becomes challenging. After all, you gifted a part of your real property to this person for free. This leaves you with few options: convince the unwanted party to voluntarily deed back their share (a daunting task if the relationship is contentious and they may want you to pay them half of the equity) or engage in costly and lengthy litigation, often resulting in a partition action where attorneys’ fees take precedence and the property is sold and they receive half of the sales proceeds.
Additionally, adding someone to a deed can lead to losing Florida homestead exemption under certain circumstances (such as if the are already on a homestead for example), resulting in the loss of significant tax benefits. Incorrectly worded deeds may also result in property transferring to the wrong individual, derailing estate planning goals. Also, failure to execute the deed correctly according to Florida law renders it invalid and causes title chain problems.
Furthermore, adding a name to the deed complicates property sales or refinancing, as all parties must agree and sign documents. Individuals receiving government benefits like Medicaid and Social Security may jeopardize their eligibility by being added to a deed. Moreover, adding a name to a mortgaged property may trigger the due-on-sale clause, leading the bank to demand immediate repayment of the loan and potentially initiate foreclosure proceedings. If the other person doesn’t live in the property and they file bankruptcy the trustee could also force you to buy out their interest or force sale of the property.
Consulting an experienced attorney before making changes to a deed is advisable to avoid costly legal entanglements.
Probate is a legal process overseen by the court where all assets are gathered, debts are settled, and the remaining estate is distributed to heirs and beneficiaries. While probate serves its purpose, it comes with certain drawbacks that can be avoided with proper estate planning.
One significant disadvantage of probate is its cost. In Florida, attorneys statutory fee is 3% of the estate’s value, more if there is complex litigation. For instance, in a $600,000 estate, attorney fees would amount to $18,000, reducing the inheritance for intended beneficiaries under the will or heirs at law in an intestate estate.
Additionally, probate proceedings can be time-consuming, taking 12 months to 24 months to complete, and even longer if complexities or litigation arise. During this period, assets are typically frozen, causing delays in distribution. In contrast, avoiding probate allows for quicker and smoother asset distribution.
Moreover, since probate proceedings are public record, privacy is compromised, and creditors become aware of estate details. Those prioritizing privacy may find avoiding probate essential.
Contrary to a common misconception, having a will doesn’t exempt an estate from probate. A will alone cannot bypass probate. A will must be probated and filed with the Court.
However, there are strategies to avoid probate in Florida:
Establishing a trust, such as a revocable trust, tailored to individual circumstances and goals.
Designating beneficiaries contractually, as seen in life insurance policies or retirement accounts- POD or TOD account designations.
Transferring assets through deeds, like an enhanced life estate deed (commonly known as a ladybird deed), which allows lifetime ownership with a remainder interest for named beneficiaries.
Holding property jointly with rights of survivorship, where ownership automatically transfers to the surviving owner upon the other owner’s death.
With the guidance of an experienced attorney, estate planning can be structured to ensure assets pass smoothly and swiftly to beneficiaries, bypassing the probate process altogether. Call our office to schedule a consultation.
Our office stands ready to serve your needs.
Carol Lawson Esq.
2451 McMullen Booth Rd. Suite 254
Clearwater, FL 33759
(727) 410-2705
The Law Office of Carol A. Lawson
PO Box 2381
Dunedin Fl 34697
Our office stands ready to serve your needs.
Carol Lawson Esq.
28870 US Hwy 19 N Suite 300
Clearwater, FL 33761
(727) 410-2705
(727) 330-1627
The Law Office of Carol A. Lawson
PO Box 2381
Dunedin Fl 34697
Bankruptcy law provides for the development of a plan that allows a debtor, who is unable to pay his creditors.
Carol A. Lawson, also handles Estate Planning matters, we offer Legal Services in the areas of Wills, Living Wills, Health Care Surrogate.
Phone: (727) 410-2705
Phone 2: (727) 330-1627
We are LBQT friendly; service animals welcomed; free parking and free WIFI.
Day, Evening and Weekend appointments available
2451 McMullen Booth Rd. #254 Clearwater, FL 33759
