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  • Do You Need An Estate Plan?

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    July 17, 2016
    At parties people I meet often say that they will call me when they have enough money to make it worthwhile to have a will.  In fact, everybody needs an estate plan, whether or not it is done with a lawyer. Here are the components of an estate plan:
    Health Care Directive and Appointment of Health Care Surrogate
    These are the documents that appoint a person to make decisions regarding your health care if you are incapacitated, and which direct them in making these decisions, so that the decisions are in keeping with your wishes. Unless you want only next-of-kin to have access to your health records, you will also need a HIPAA authorization form so that non-family members can receive health records. Finally, you may want a document to direct who can “control” visitors to you while in hospital if you want to prevent next-of-kin from taking over your hospital room; and also a document with burial/cremation instructions. If you think about it, these are the most important documents, because this is life and death - money is just money. You do not need a lawyer for these. If you email me, I will send you these forms, no charge.
    Durable Power of Attorney
    This is the document that appoints someone to manage your affairs if you are incapacitated. This is only operative while you are alive. If you do not have this document in place, a family member can be appointed by a court to manage your affairs, but this is expensive and time-consuming. You can find this document online for free, and it’s usually better than nothing, but there are many possible problems with doing this yourself. For liability reasons I cannot send you this form, nor any of the others that relate to assets.
    If you die without a will, the state of Florida does NOT get your assets. If you die without a will, there is a statute saying that your assets go to the following in the following order: spouse, if no spouse children; if none of the above, parents; if none of the above, grandparents/grandchildren; if none of the above, siblings and half-siblings; if none of the above uncles/aunts and nieces/nephews; if none of the above cousins. So, a will is not strictly necessary, but it can assure that the right people get your assets; and it can direct what assets go to who.
    A trust adds the dimension of time to the distribution in a will.  Additionally, if assets are transferred to a trust while you are alive, probate can be avoided. A trust can add flexibility, so that the timing of the distributions correspond to the preparedness of the beneficiaries to receive assets. Assets held in trust can be safe from predators, creditors, and future ex-spouses of a beneficiary.  For this kind of protection, distributions to beneficiaries cannot be automatic, but instead are left to the discretion of a trustee, who can be a friend, a relative, or a bank. Many of my clients create trusts where the assets are available to meet all the needs of beneficiaries, but are kept “forever” as trust assets, and administered by a responsible trustee.  A well-drafted discretionary trust can serve to hold assets for beneficiaries who really need the money to deal with the vicissitudes of life, as opposed to automatic distributions, which often merely finance more opulent lifestyles. Only a specially trained lawyer can draft this kind of trust.
    If You Have Children
    If you have children, you need a Designation of Pre-Need Guardian, so that if something happens to you (and the other parent if there is one), the court knows whom to appoint as the guardian or guardians for your children. This can avoid a court battle for custody of the children, which can be traumatic for children at a vulnerable time. This document must be E-filed with the court by a lawyer. 
    If you have minor children you probably have a life insurance policy, and in that case you need a trust to prevent your children from coming into the proceeds of that insurance policy as soon as each turns 18. This is important to protect the money from an 18 year old, and also to protect an 18 year old from the problems associated with having access to too much money too soon.
    Yes, You DO Need an Estate Plan
    It can be quite simple and do-it-yourself, or include a complex tax-sensitive special needs trust for your niece, but everyone needs an estate plan. This is a growth experience that may also add focus to your life. It is not the most fun thing to do this summer, but as projects go it’s not the most difficult, and you will feel really good about yourself when you have checked this off your to-do list.
    Israel Sands, J.D. , LL.M.    israelsands@gmail.com
    Estate Planning & Probate Law   AV Rated by Martindale-Hubbell
    1130 Washington Avenue 3d Floor
    Miami Beach, FL 33133 (305) 951.3333
    Mailing address: 3520 East Fairview Street, Miami, FL 33133

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