» Estate Planning

What is Estate Planning?

Estate planning is the process of creating a strategy to transfer your assets when you pass away. Your estate plan will lay out who you want to receive your assets, what they should inherit, and how that inheritance should be managed. It can also designate who will care for your young children or pets and describe how you want to be treated in your final days. Depending on your circumstances, your estate plan could include several documents:

Do You Need an Estate Plan If You Don't Have a Large Estate?

Yes, estate planning is important for everyone, regardless of the size of your estate. Florida has laws that apply whenever a person dies without a Will or Trust. However, those laws may not properly protect you, your assets, or loved ones. Even if you have modest assets, a well-structured plan can help ensure your wishes are followed, simplify the process for your loved ones and protect your assets after your passing. An estate plan is even more important if you have specific wishes regarding how you are treated in your final illness or need to provide for a loved one’s care after your passing.

When Should I Start Estate Planning?

It is almost never too early to start estate planning, but it can be too late. You can only create an estate plan while you are alive and competent -- meaning you have the required mental capacity. When a terminal illness or degenerative condition affects your ability to think, remember, or communicate your wishes, it could also interfere with your ability to control what happens to your assets after you pass away or designate who makes decisions for you in the event of incapacity. You shouldn’t wait to see if you will be diagnosed with these conditions. Start your estate planning early so you know your wishes will be protected.

Can I Make Changes to My Estate Plan After It's Been Created?

Yes, you can update and modify your estate plan as circumstances change. It's recommended to review your plan periodically, especially after significant life events like marriages, births, divorces, or changes in financial status.  We check in with our estate planning clients every three years.

What is a Last Will and Testament?

A Will is a legal document that outlines your wishes for the distribution of your assets after your death, including your items of tangible personal property (jewelry, cars, etc.), and names the person in charge of that distribution (known as the Personal Representative).  In addition to preparing your will, our firm will provide you with a Tangible Personal Property List that you may fill out according to your wishes later. This allows you to have all the time you need in deciding who your valuable items should go to after your passing. 

A Will may also contain your wishes for the treatment of your bodily remains or burial wishes. If you have minor children, you may also designate a designated guardian for them. This document goes into effect after your passing and must be submitted to the Court to begin Probate. Probate is the process of formally administering your estate.

What is a Trust?

A Trust is a separate, private, legal entity that can hold and manage assets for your benefit during your lifetime and for the benefit of your heirs after your passing. A Trust is either a Revocable Trust or an Irrevocable Trust. Revocable trusts can act as “will substitutes,” allowing you to transfer assets to your beneficiaries after you pass away. They are often used to create other, specialized trusts after your death to provide for a loved one’s care, pay your estate taxes, or shelter your assets from your family’s creditors. Irrevocable trusts can be used to manage your family’s assets, reduce estate taxes, and protect your loved one’s eligibility for means-tested government benefits.  Please see question #9 for further explanation on the differences between Revocable Trusts and Irrevocable Trusts.

Along with a copy of the Trust, you will need to sign supporting documents that accompany the Trust. These include:

  • The Certificate of Trust: This is a signed affidavit containing the main terms of the Trust that financial institutions often want to see.
  • Assignments to Trust: This legal document assigns property to your Trust. There are variations of this document for assigning your Tangible Personal Property, any Business entities you may own, or any items of significant value.
  • Deed to a Trust: This legal document allocates your home or other Florida real property into your trust to avoid probate. We can also prepare a deed not into a trust, which allows you to name someone to inherit your home after your passing. However, this form of deed may have unintended consequences because of unsettled law.

What Is the Difference Between a Will and A Revocable Trust?

While these two documents have similar functions, there are important differences. A Will must be submitted to the Court after your passing in order to begin the Probate process of distributing your estate. In most cases where someone has a Will but no Trust, a court order must be issued to gain access to any financial accounts or safety deposit boxes that are solely in your name. On the other hand, a Trust is a living document that goes into effect once you sign and fund it. This allows the Trust to privatize the process of the distribution of your final estate. In other words, having a Trust is a great way to avoid the hassle of the Probate process. A Revocable Trust is also a great way to ensure a degree of discretion and is helpful if your family does not always get along.

How Do You Fund a Trust?

Before a trust can have any practical effect, it must be funded. That means you have to transfer your assets into the trust’s name or designate the trust as the beneficiary to receive assets when you pass away. Because a trust is a separate legal entity, you will need to execute deeds, assignments, and other paperwork with your financial institutions to properly fund your trust. At Harrison Estate Law, we provide step by step instructions to help you through this process.

What Is the Difference Between Revocable and Irrevocable Trusts?

There are many differences between revocable and irrevocable trusts. Here are some of the common differences:

Revocable Trust: This type of trust, also known as a living trust, can be altered, amended, or revoked by the grantor (the person who creates the trust) at any time during their lifetime. As long as the grantor is alive and competent, they retain control over the trust assets and can change the terms of the trust as they see fit. The assets in a revocable trust typically pass directly to the beneficiaries (or to continuing trusts) upon the grantor's death, avoiding probate. A revocable trust does not provide asset protection for the Grantor, but it can provide asset protection for heirs and can provide estate tax benefits, particularly for future generations.

Irrevocable Trust: Once established, an irrevocable trust generally cannot be altered, amended, or revoked. The grantor relinquishes control over the assets and the terms of the trust. Since the assets are no longer under the grantor's control, most irrevocable trusts are not considered part of the grantor's estate for tax purposes, which can offer significant estate tax benefits. Additionally, irrevocable trusts can provide asset protection from creditors, depending on state laws and the specific terms of the trust.

Can I Use a Trust to Protect My Assets from Lawsuits?

A revocable trust does not provide protection for you from lawsuits although if properly implemented they also do not make you more susceptible to lawsuits. Revocable trusts are a great way to set up asset protected trusts called spendthrift trusts for your loved ones after you pass away to protect their inheritance.  

An irrevocable trust can protect your funds from lawsuits and provide estate tax planning benefits. However, in Florida, you generally cannot set up an irrevocable trust which you create, you control, and which benefits you (this is known as a “self-settled asset protection trust”) and have that trust protect your assets from lawsuits.  Instead, you would need to set up the irrevocable trust to benefit others or have someone else set up an irrevocable trust that benefits you.