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Wills, Trusts & Dying Intestate: How They Differ

Let’s kick of the New Year by getting down to the basics! Ok, so maybe we are a day early but we are pumped too start the New Year and begin sharing more information. With that being said, let’s get started…

Most people understand that having some sort of an estate plan is a good thing. However, many of us don’t take the steps to have an estate plan prepared because we don’t understand the nuances between wills and trusts – and dying without either.

Here’s what will generally happen if you die, intestate (without a will or trust), with a will, and with a trust. For this example, we’re assuming you have children, but no spouse:

1.    Intestate. If you should die intestate, your estate will go through probate and all the world will know what you owned, what you owed, and who got what. Your mortgage company, car loan company, and credit card companies will all seek payment on balances you owed at the time of your death.

After that, Florida law will decide who gets what and when.

●      For example, Florida’s intestate statute may mandate divvying up proceeds equally among your children.

●      Your older children will get their shares immediately if they’ve attained adulthood.

●      But, the court will appoint a guardian of its choosing to manage the money for your minor children until they become adults and possibly a separate guardian to raise your minor children.

●      Shockingly, that guardian can charge a lot of money to manage the money for your minor children and be a total stranger – as can the guardian who raises your minor children.

●      If you die without a valid will, the court, not you, will decide the futures of your minor children.

Keep in mind that since your death has been published to alert valid creditors, it’s possible for predators (fake creditors) to come forth and make demands for payment – even if they’re not owed anything.

The bottom line? Dying intestate allows state law and the court to make all the decisions on your behalf – regardless of what your intent might have been. Publicity is guaranteed.

2.    Will. If you die with a valid will, your assets will still go through the probate process. However, after creditors have been satisfied, the remaining assets go to whom you’ve identified in your will.

●      If you want to leave money to your children and name a guardian for the minor ones, the court will usually abide by your wishes.

●      The same holds true if you specified that you wanted to give assets to a charity, your Aunt Sue, or your neighbor.

●      Keep in mind that predatory creditors are still an issue as your death has been publicized. Even with a will, probate is a public process.

The bottom line? While a court oversees the process, having a will allows you to tell the court exactly how you want your estate to be handled. But, a public probate is still guaranteed.

3.    Trust. If you’ve created a trust, you’ve taken control of your estate plan and your assets.  Trust assets are not subject to the probate process and one of the most important benefits of trusts is that they are private. Although notices to creditors may be published, most of the other details (your assets, who is receiving what, etc.) remain private, helping your family minimize the risk of predators.

As part of the trust drafting process, you’ll have named a trustee to manage your estate, when you are no longer able to, and provide him or her with specific instructions on how your assets should be dispersed and when.

●      One word of caution – trusts must be funded in order to bypass probate.

●      Funding means that your assets have been retitled in the name of your trust.

●      Think of your trust as a bushel basket. You must put the apples into the basket just as you must put your assets into the trust for either to have value.

Even if you have a trust prepared, you still need a will to pour any assets inadvertently or intentionally left out of your trust and to name guardians for minor children. However, this type of will is much shorter and less complicated than one that is responsible for disposing of all of your assets to your beneficiaries.

The bottom line? Trusts allow you to maintain control of your assets through your chosen trustee, avoid probate, and leave specific instructions so that your children are taken care of – without receiving a lump sum of money at an age where they are more likely to squander it or have it seized from them.

Don’t let the will versus trust controversy slow you down. Call our office today so we can answer any questions you may have and put together an estate plan that works for you and your family whether it be a will, trust, or both!

 Call (954) 999-9683 for your free consultation.

The Legacy Law Firm – Where Your Legacy Lives On

What Is Your Greatest Asset?

I try my best to set aside time weekly to read through the latest trends and updates in law when it comes to estate planning and probate administration.  An article I read recently discussed “the client’s greatest asset” and defined this asset as the home.  The article went on to discuss the wonderful benefits of the Florida homestead exemption, a topic I will discuss in greater detail in the near future I’m sure.  While I agree that your home is a great asset, one in which each American can agree they worked hard for and take pride in, I don’t necessarily believe it’s the greatest.  Before I share what I believe to be your greatest asset, let’s first define the word asset. An asset can be a thing, quality or person and it’s something of great value.  With that being said, I believe many would agree that their greatest asset is their family.  Whether your family consists of you and your significant other/spouse, your children, a great group of friends – whatever family is to you I’m almost certain that you would agree that they are the most valuable asset in your life.  Now for the reason I’m posting this blog:  while your home has the Florida Constitution looking out for it (i.e. The Homestead Exemption) your family has, well, you.  This is why it’s so crucial that you take the time today to plan and ensure your greatest asset is not just considered but protected.

A comprehensive estate plan is one that plans for both death and incapacity.  You continue to maintain a certain degree of control by nominating individuals ahead of time that would step in to be your voice in the event of a medical emergency, another individual to cover financial affairs and a Trustee to manage your assets until you are fit to do so.  Remember: self care is not selfish.  In order to take care of others you must first take care of yourself which is why this is a crucial step and should not be overlooked.  Many clients haven’t previously considered or simply do not want a durable power of attorney or healthcare surrogate, but you should truly plan ahead for your own incapacity. It will make an already stressful situation a little easier.  Should you pass away, the plan will lay out the manner and timing in which your assets will be distributed to your loved ones.  This is a great feature if you anticipate having younger beneficiaries since you can nominate a Trustee to manage their share until they reach a certain age (i.e. many individuals feel 25 – 30 years old is an age of maturity).  Certain Revocable Trusts also provide your beneficiaries with limited asset protection, a feature that is favored by many parents who worry about their child facing a divorce in the near future.  You can even provide for beloved pets or make charitable donations.  Whatever your goal may be, our attorneys are ready to discuss the various ways in which you can achieve it.

Don’t hesitate when it comes to your greatest asset.  Take some time out of your busy schedule, jot down your goals and sit with an experienced estate planning attorney.  Most people don’t regret being prepared or proactive.  Plan today and rest easy tomorrow.

The Legacy Law Firm, PLLC. ~ Where Your Legacy Lives on