Happy New Year 2011 - The Year for Planning
Happy New Year to all. 2011 promises to be interesting, perhaps provacative, and increasingly uncertain politically, economically, and security wise. During this period of New Year's resolutions, I encourage everyone to consider reviewing your estate plan and taking appropriate action to accomodate those changes that have occurred in your lives over the past several years, months, or in the case of estate taxes, the last few days. Changes in the tax code present new planning opportunities and flexibility for most people.
So, whether you have a written estate plan that you designed, or whether you are relying on the estate plan provided for you by the State of Florida (the results of which are often a great surprise to your loved ones, heirs and creditors), now is a great time to review that plan. Perhaps a quick review of the reasons for estate planning will help you get started with your review.
Who Needs Estate Planning?
Practically speaking, anyone who owns anything, has life insurance, has a retirement plan, has children - especially minor children, who is married, is involved in an unmarried domestic partnership, is divorced, is or may become incapacitated, or who expects to die, needs at least some estate planning. That means just about everyone.
Why Do I Need Estate Planning?
The reasons for the need for estate planning are multitudiness, and include both personal care issues and property issues (property in this context is used in its broadest meaning of all assets of whatever nature). Proper estate planning involves both life and death issues.
During our lifetime, proper estate planning allows us to provide for who will provide our care and the management of our assets during an incapacity, including nursing home confinement. Through the use of advance directives (durable powers of attorney, designations of health care surrogates, living wills, designations of health care surrogates for minor children, declarations of pre-need guardians, etc.), we can ensure that the people we know, trust and love, will provide medical treatment decisions for us when we are unable to do that for ourselves. We can also ensure that our minor children will receive proper medical care is we are unable to make those decisions ourselves. We can designate who will be responsible for our personal care, and the managment of our assets, if we for any reason need a court appointed guardian.
At death, proper estate planning allows us to provide for what, when and how our assets are distributed to those we want to receive them. We can provide for who we want to receive our assets, and who we want not to receive our assets. We can protect loved ones from potential mismanagement of assets, the loss of assets to creditors, including divorcing spouses, and from unnecessary taxes. Absent willfull and purposeful estate planning, our assets can end up with our creditors, with our loved ones divorced spouses, subject to unnecessary taxation, loss through mismanagement, or in the hands of those we would never want to receive our assets.
Proper estate planning allows us to avoid the uncertainties associated with relying on beneficiary designations, jointly owned property, and the intestacy statute, all of which can result in totally unexpected people receiving our assets after death. After all, who will receive your life insurance or retirment plan if the person (or people) you've listed on your beneficiary designation are deceased? Or, who will manage those assets for a beneficiary who is incapacitated at the time of your death? If property is owned as joint tenants with the rights of survivorship, or tenancy by the entireties, what happens to the asset when the joint owner dies shortly after you (especially of concern to blended families)! And, what does Florida's intestacy statute provide for the distribution of assets if you have not prepared a will or a trust? (You can read Florida's Intestacy Statute here .)
Perhaps more importantly than anything else, through proper estate planning we can choose who we want to be the guardian and care for our minor children, our disabled adult children, or any other person whose care has been entrusted to us, rather than leave such decisions to a judge who will not be familiar with our family dynamics, or who may be choosing between "warring" factions of our family who want to be the persons exerting influence over our children's development.
Through proper estate planning we can provide for the care, maintenance and support of our disabled family members through a special needs trust , and ensure that they are not disqualified from any public benefits to which they may otherwise be entitled, but for the inheritance they receive from us that causes their inelgibility for those public benefits.
How Often Do I Need to Change My Estate Plan?
After you have established your estate plan, you should periodically review your plan to determine whether changes are needed. The need to change your estate plan usually arises out of changed circumstances. Those changes include a close family member dying, a new family member by birth, and sometimes marriage, a significant change in your net worth, marriages, divorces, a significant change in family circumstances, or a change in the law. Changed circumstances for those you have named as your fiduciaries (executor, personal representative, power of attorney, trustees, etc.) should also prompt a need for review.
This year, 2011, the change in the Federal estate tax provisions of the Internal Revenue Code that increases the personal exemption from estate taxes to $5 million per person, is a change in the law that should cause anyone with estate tax planning provisions in their estate planning documents to review their plan. Some of the complexity caused by the estate tax planning provisions in many sets of estate planning documents can be eliminated, and replaced with true estate planning considerations.
2011 New Years Resolution
Take time this year to review your estate planning. Determine if you need to make changes to your estate planning documents, if you have them; and, if you don't have estate planning documents in place, especially if you have minor children or disabled children, get them. If you have estate tax planning provisions in your documents, give serious consideration to the question of whether you can eliminate those provisions to simplify your planning, or achieve more pure estate planning objectives through changes in those provisions. Make it your New Years Resolution #1!
So, whether you have a written estate plan that you designed, or whether you are relying on the estate plan provided for you by the State of Florida (the results of which are often a great surprise to your loved ones, heirs and creditors), now is a great time to review that plan. Perhaps a quick review of the reasons for estate planning will help you get started with your review.
Who Needs Estate Planning?
Practically speaking, anyone who owns anything, has life insurance, has a retirement plan, has children - especially minor children, who is married, is involved in an unmarried domestic partnership, is divorced, is or may become incapacitated, or who expects to die, needs at least some estate planning. That means just about everyone.
Why Do I Need Estate Planning?
The reasons for the need for estate planning are multitudiness, and include both personal care issues and property issues (property in this context is used in its broadest meaning of all assets of whatever nature). Proper estate planning involves both life and death issues.
During our lifetime, proper estate planning allows us to provide for who will provide our care and the management of our assets during an incapacity, including nursing home confinement. Through the use of advance directives (durable powers of attorney, designations of health care surrogates, living wills, designations of health care surrogates for minor children, declarations of pre-need guardians, etc.), we can ensure that the people we know, trust and love, will provide medical treatment decisions for us when we are unable to do that for ourselves. We can also ensure that our minor children will receive proper medical care is we are unable to make those decisions ourselves. We can designate who will be responsible for our personal care, and the managment of our assets, if we for any reason need a court appointed guardian.
At death, proper estate planning allows us to provide for what, when and how our assets are distributed to those we want to receive them. We can provide for who we want to receive our assets, and who we want not to receive our assets. We can protect loved ones from potential mismanagement of assets, the loss of assets to creditors, including divorcing spouses, and from unnecessary taxes. Absent willfull and purposeful estate planning, our assets can end up with our creditors, with our loved ones divorced spouses, subject to unnecessary taxation, loss through mismanagement, or in the hands of those we would never want to receive our assets.
Proper estate planning allows us to avoid the uncertainties associated with relying on beneficiary designations, jointly owned property, and the intestacy statute, all of which can result in totally unexpected people receiving our assets after death. After all, who will receive your life insurance or retirment plan if the person (or people) you've listed on your beneficiary designation are deceased? Or, who will manage those assets for a beneficiary who is incapacitated at the time of your death? If property is owned as joint tenants with the rights of survivorship, or tenancy by the entireties, what happens to the asset when the joint owner dies shortly after you (especially of concern to blended families)! And, what does Florida's intestacy statute provide for the distribution of assets if you have not prepared a will or a trust? (You can read Florida's Intestacy Statute here .)
Perhaps more importantly than anything else, through proper estate planning we can choose who we want to be the guardian and care for our minor children, our disabled adult children, or any other person whose care has been entrusted to us, rather than leave such decisions to a judge who will not be familiar with our family dynamics, or who may be choosing between "warring" factions of our family who want to be the persons exerting influence over our children's development.
Through proper estate planning we can provide for the care, maintenance and support of our disabled family members through a special needs trust , and ensure that they are not disqualified from any public benefits to which they may otherwise be entitled, but for the inheritance they receive from us that causes their inelgibility for those public benefits.
How Often Do I Need to Change My Estate Plan?
After you have established your estate plan, you should periodically review your plan to determine whether changes are needed. The need to change your estate plan usually arises out of changed circumstances. Those changes include a close family member dying, a new family member by birth, and sometimes marriage, a significant change in your net worth, marriages, divorces, a significant change in family circumstances, or a change in the law. Changed circumstances for those you have named as your fiduciaries (executor, personal representative, power of attorney, trustees, etc.) should also prompt a need for review.
This year, 2011, the change in the Federal estate tax provisions of the Internal Revenue Code that increases the personal exemption from estate taxes to $5 million per person, is a change in the law that should cause anyone with estate tax planning provisions in their estate planning documents to review their plan. Some of the complexity caused by the estate tax planning provisions in many sets of estate planning documents can be eliminated, and replaced with true estate planning considerations.
2011 New Years Resolution
Take time this year to review your estate planning. Determine if you need to make changes to your estate planning documents, if you have them; and, if you don't have estate planning documents in place, especially if you have minor children or disabled children, get them. If you have estate tax planning provisions in your documents, give serious consideration to the question of whether you can eliminate those provisions to simplify your planning, or achieve more pure estate planning objectives through changes in those provisions. Make it your New Years Resolution #1!
Posted by Randy Coleman at 1/1/2011 12:22 PM 
Categories: Estate Planning, Guardianship, Living Will, estate planning, estate taxes, Tenancy by the Entireties, estate tax, Designation of Health Care Surrogate, Health Care Power of Attorney, Durable Power of Attorney, Advance Directives in Florida
Tags: advance directives designation of health care surrogate durable power of attorney estate planning lawyer estate planning attorney estate planning estate tax Florida estate planning attorney guardianship law guardianship lawyer health care power of attorney Jacksonville estate planning attorney Jacksonville guardianship attorney power of attorney tenancy by the entireties wills and trusts
Categories: Estate Planning, Guardianship, Living Will, estate planning, estate taxes, Tenancy by the Entireties, estate tax, Designation of Health Care Surrogate, Health Care Power of Attorney, Durable Power of Attorney, Advance Directives in Florida
Tags: advance directives designation of health care surrogate durable power of attorney estate planning lawyer estate planning attorney estate planning estate tax Florida estate planning attorney guardianship law guardianship lawyer health care power of attorney Jacksonville estate planning attorney Jacksonville guardianship attorney power of attorney tenancy by the entireties wills and trusts
Done! This is most certainly on the top of my list for New Year's resolutions. It's been awhile since I've reviewed my plan, so now seems like a great time to do it. Thanks for the reminder!
-Brenda K.
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