Orlando Estate & Elder Law

Make Your Really Final Plans in Advance

“While you’re refining your estate planning to live through your senior years, don’t forget about, uh, the end of it all.”

For most folks, postponing thinking about their funeral is the status quo, until someone close to them dies or until they have a health scare. Worse, according to The North Platte Telegraph’s article, “Sunday Focus: Don’t wait to make a plan until it’s too late,” they don’t address their demise at all, putting friends and family members in the position to have to guess what they would have wanted.

If you pre-plan your funeral, your family and loved ones are spared the unpleasant guessing game. Did she want a fancy casket? What suit would he have selected to be buried in? Or did she wish to be cremated?

If you pre-plan your funeral, you can also lock in costs for the services that morticians and cemeteries provide. If you are married or have a partner, you should go together and try to get as many of the hard decisions made in advance. This will also help you get comfortable with having this discussion.

Some mortuaries have online tools you can use to compile your information in advance, plan your funeral and compare costs. Even if you don’t pre-pay, at the very least you can pre-plan.

Some families purchase plots so they can be assured of being buried near each other.

The cost of inflation of funeral expenses has averaged about 4% for many years. People bought CDs (Certificates of Deposit) specifically for funeral expenses in the past.  However, as interest rates  dropped, they stopped being a useful planning tool.

Funeral insurance can be portable.  Therefore, if the funeral home that sells you a funeral insurance plan goes out of business, the policy is still yours. If you move to a new home, the policy—along with your directions for your funeral—can be transferred to another funeral home.

The increasing acceptance of cremation may make funerals less expensive, but there are still costs that are involved. Some family members may not like the idea of a loved one being cremated. That’s why it’s very important to convey your wishes to the family, so there is no conflict.

 Since fewer people are affiliated with houses of worship, the funeral home has taken a larger role in planning funeral services.

Prepare in advance for your funeral and complete your estate planning. Taking care of both will increase the chances that your wishes will be followed. Leaving them to your family to decide and manage the costs after you pass will add to the stress they experience while grieving for you.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Resource: The North Platte Nebraska Telegraph (July 22, 2018) “Sunday Focus: Don’t wait to make a plan until it’s too late”

Don't Miss This Step in Estate Planning

“Many times, people spend a great deal of time, energy and money creating an estate plan. However, the plan does not work, because their assets are not funded properly.”

Funding assets is a critical step in the estate planning process that is very frequently forgotten, as reported in The Farmer’s article “Funding assets to your estate plan.”

Funding is the process of titling assets so that the estate plan and the assets are aligned. Each estate plan is different.  However, the funding process includes tasks such as changing ownership on accounts, establishing beneficiary designations and transfer on death designations.

One common mistake: opening a joint checking account to cover funeral costs and then not funding the account. For your plan to be carried out, accounts need to be funded.

After death, a will is reviewed by a probate court and assets included in the will are managed and distributed by the executor,  known as a personal representative here if Florida.

If your assets have been placed in a revocable trust, the trust names a trustee who manages and distributes after your death. You need to make sure the ownership and beneficiary designations for all assets are correctly named. These include relatively common financial tools like checking and savings accounts, CDs, bonds, stocks, life insurance policies, real estate, investment accounts and any business interests.

Some accounts should not be in a trust, such as retirement accounts and incentive stock options. An estate planning attorney will be able to help you determine what accounts should be held in a trust and which should not be.

In addition to wills and revocable trusts, some estate plans incorporate joint ownership and transfer on death designations.

Speak with an experienced estate planning attorney to make sure your assets are aligned with your estate plan.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: The Farmer (March 16, 2018) “Funding assets to your estate plan”

Divorce Penalty for Retirement

“When all is said and done, ending a marriage can be almost as destructive to your retirement savings as the Great Recession was, according to new findings from the Center for Retirement Research at Boston College.”

It is almost impossible to end a marriage and to leave retirement savings intact. Between the cost of legal fees and the division of assets and households with one income instead of two, the cost of divorce is high. As CNBC reports in “This move is almost as bad for your retirement savings as the Great Recession was,” divorce puts people’s retirements at risk and some folks have to work many more years as a result.

 Current statistics show that approximately 40% of all marriages end in divorce. Researchers at Boston College behind the National Retirement Risk Index examined how likely individuals are to maintain their standard of living, once they retire. As of 2016, half of working-age households were reported to be at risk. Divorce pushes up a retirement risk for a person by 7 percentage points, while the 2008 financial crisis added 9 points.

Here are more reasons why divorce deals a tough blow to retirement:

• In addition to legal fees, divorce proceedings pull people away from work and can have an impact on their earnings abilities, especially women.
• Many divorces lead to the sale of the family home, which creates a major financial burden. If your marriage falls apart when the housing market does, the impact will be even worse.
• It’s more expensive to run two households than it is to run one.
• Tax rates change when couples divorce.

Dividing up a 401(k) when only one spouse was working can be tricky. You’ll need a court order known as a QDRO (a domestic relations order) to divide the account. The nonparticipating spouse of a 401(k) can typically receive funds from their ex’s as cash and not have to pay a tax penalty for the early withdrawal.  However, that money should be set aside for retirement. The money is often used to pay off debt or to fund the purchase of a new home. That means there is much less available for retirement.

Once the financial dust has settled, experts recommend reviewing both your retirement plan and estate plan. You’ll want to make changes on documents, including life insurance policies and any assets where your former spouse was listed. There may be court orders concerning retitling accounts. Speak with your estate planning attorney, to make sure your estate plan matches your new marital status.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: CNBC (June 28, 20918) This move is almost as bad for your retirement savings as the Great Recession was”

Capital Gains Tax Can Still Get You

The doubling of the estate tax exemption might mean you do not have to pay that tax.  However, if you are not careful, you could end up paying more in capital gains taxes than necessary.

It is assumed by most people that since the federal estate tax exemption was doubled in the tax bill passed late last year, many wealthy families would end up paying a lot less in taxes. However, it is not that simple. In fact, people who already made estate plans around the old estate tax exemption could end up paying more in taxes than necessary. This is because of a popular way of working around the estate tax as the Wills, Trusts & Estates Prof Blog discusses in "Don’t Let New Estate Tax Law Cause Your Family to Pay Unnecessary Capital Gains Taxes."

Many people held assets valued up to the estate tax limit personally. Anything they owned over that amount was put in a trust. However, trusts are often subject to capital gains taxes. Those taxes still need to be paid.  However, they are lower than the estate tax rate.

The problem now is that the higher estate tax exemption means people can hold more assets personally. If people do not make changes to their plans, they may pay more in capital gains tax than necessary.

Most people in this situation should not have too much difficulty correcting it.  However,they will need to see an estate planning attorney to make the necessary changes to their estate plans.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Wills, Trusts & Estates Prof Blog (May 15, 2018) "Don’t Let New Estate Tax Law Cause Your Family to Pay Unnecessary Capital Gains Taxes."

Are Your Heirs Prepared?

People who inherit a lot of wealth and are not ready to deal with it, can run into a lot of problems.

Everyone is aware that it is not a good idea to let minor children inherit a lot of wealth and leave them to manage it on their own. The money would likely be wasted, and the children might then lack any motivation to go to school and get a job.

This is so obvious to people that the law does not even allow it. If minors are left a large inheritance, the court will appoint someone to manage it on their behalf. However, many people assume that once a person matures, they are ready to handle large inheritances on their own.

Adults, particularly those who do not already have wealth of their own, can run into the same problems as minors when they inherit money. This a particularly timely problem. In the next few years, many adults will receive large inheritances they are not ready to manage, as Financial Advisor discusses in "Inheritors Not Prepared to Inherit, FIS Says."

In the coming decades, it is expected that 30 trillion dollars will be passed down between generations.  However, few of those who are set to receive this wealth, understand how to handle it. Almost half do not think they will need to get professional advice to handle it. If something does not change, much of that wealth could be squandered.

There are ways to fix this problem, by making sure your heirs understand how to handle their inheritances. You can also alleviate the problem, by using trusts managed by professional trustees as a tool in your estate plan.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Financial Advisor (May 16, 2018) "Inheritors Not Prepared to Inherit, FIS Says."

Tom Benson's Last Play

The wealthy owner of the New Orleans Saints and Pelicans, Tom Benson, recently passed away. His will makes it clear that he no longer got along with his daughter and her children.

A couple of years ago, one of the biggest stories in elder law was Tom Benson. He was a wealthy New Orleans man who owned two professional sports franchises. His daughter and her two children sued Benson. Their claim was that he was not of sound enough mind to handle his own affairs and that he should not be allowed to hand the control of his businesses over to his third wife.

They lost that lawsuit at the trial court level and they also lost two appeals of the verdict.

Benson recently passed away. His will makes it very clear that he was not happy with his daughter and grandchildren, as the New Orleans Advocate reports in "Tom Benson's last will makes clear who was in, out of his inner circle late in his life."

The will was executed and witnessed one month after the trial court verdict. It directs that all of Benson's property is to be put in a trust. It is not known publicly who the beneficiaries of the trust are. However, it is safe to assume that Benson's daughter and grandchildren are not beneficiaries. This is because the will states several times that they are not to receive any of his property.

Given the previous litigation, it would seem likely that there could be a challenge to Benson's will. Since a court determined that Benson was of sound mind shortly before he signed the will, the prospects of a successful challenge are unlikely.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: New Orleans Advocate (March 16, 2018) "Tom Benson's last will makes clear who was in, out of his inner circle late in his life."

Don't Hide Your Intentions

It would be unfortunate to create a will and have no one be able to find it after you pass away.

Getting an estate plan is not the most difficult thing you will ever do. An experienced estate planning attorney will do most of the work of making sure you have an estate plan that will be effective at fulfilling your wishes.

However, you still would have put a lot of time and thought into the process, so you can tell the attorney what your wishes are. This is true, even if your estate plan consists of nothing more than a simple will.

It would be a shame if it cannot be carried out after you pass away.

That happens more often than it should as the Wills, Trusts & Estates Prof Blog discussed in "The Biggest Estate-Plan Mistake: Losing It."

While sometimes estate plans are not fulfilled for legal reasons, they often fail for a much more basic reason. No one knows where to find the estate plan documents and sometimes no one knows they even exist.  Therefore, the instructions in them cannot be carried out.

It is not difficult to avoid having this problem.

You should always know where your will is located. You should also tell someone who is close to you where to find it. Someone who will know that you have passed away, needs to know where to look for your estate plan when the time comes.

If the original copy of your will is at your attorney's office, make sure a close friend or family member knows that and knows the name of your attorney.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Wills, Trusts & Estates Prof Blog (Feb.12, 2018) "The Biggest Estate-Plan Mistake: Losing It."

Planning Can Reduce Cost of Funeral Services

Variation in prices can be attributed to number of choices and the choices people make.

Funeral services in the U.S. cost, on average,thousands of dollars with services, burial fees, coffins and flowers, as well as prices that vary by states, according to the Cronkite News in "Arizonians pay less for funeral services compared to rest of nation."

The average cost of funeral services in Arizona and in nearby states are much cheaper than they are elsewhere. The primary reason for this is not because funeral homes charge that much less. It is because cremation is much more popular in those states, than in the rest of the nation.

Cremation is so popular that there is plenty of competition in the market place for it. It is also much cheaper than in other states with fewer crematoriums.

The best way to control funeral costs is not to move.

It is to make plans ahead of time, so that you can make sure your estate has the necessary money, regardless of how you would like your remains to be handled.

An estate planning attorney can advise you on creating an estate plan that fits your unique circumstances, as well as advise on sufficient funding available for funeral expenses.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Cronkite News (Dec. 26, 2017) "Arizonians pay less for funeral services compared to rest of nation."

Checking In On Another Celebrity Estate

Glenn Frey of the Eagles passed away recently. Details of his estate have been made public.

The details of Glenn Frey's will are not that interesting on the surface. Nevertheless, the will does contain an interesting provision that illustrates how many wealthy people choose to handle their estate plans.

Frey left behind a will that leaves his entire estate to his wife and names her as the executor of the will.

Two co-executors were named in case his wife was unable to serve.

There is not much that is unusual there.

The details of the will were reported by TMZ in "Glenn Frey Eagles Legend Left Everything To Wife."

So, what is interesting?

The assets listed in Frey's will only amount to $100,000.

It is impossible that Frey did not have a lot more wealth than that. Court documents mention that he also left behind a family trust.

This suggests the bulk of his assets are in the trust to be distributed to his wife and their three children at some point.

An important takeaway from this?

The typical way for wealthy people to leave assets to their families is a trust used for most (or all) of the assets and a will used for the remainder.

Also of note is that we know the details of the will.

Why?

It has to go through probate, which makes it public.

We do not know the details of the trust,  since it does not have to go through probate. People who value their privacy have another reason to use a trust.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: TMZ (Nov. 15, 2017) "Glenn Frey Eagles Legend Left Everything To Wife."

Step-Family Fight over Nation's Largest Housing Complex

A dispute between a widow and four of her stepchildren leaves the future of the largest federally subsidized housing complex in the U.S. up in the air.

Starrett City in Brooklyn is the largest federally subsidized housing complex in the country. It even has its own power plant.

The original developer died some time ago. The current shareholders would like to sell the complex or at least the developer's widow, who controls most of the shares, would like to do so.

An auction was held for the complex and a price agreed to. However, regulators determined that the prospective buyer was not fit.

Because President Trump has a small stake in the development, it was decided to avoid media scrutiny and approach prospective buyers who might be interested to determine if they might be deemed fit.

A buyer was found, but the sale is delayed as The New York Times reported in "The Messy Family Battle for Starrett City."

The problem is a group of dissident shareholders. They include four of the widow's stepchildren who have previously accused her of mismanaging the family's business affairs.

These dissidents claim that she did not accept the highest bidder for the property and are causing delays.

It is not clear what is the original source of the family dispute.

Sometimes stepchildren and stepparents fight over estates, just because they can.

There does not necessarily need to be a good reason.

That means planning for blended families in estate plans is important. Plans need to be written in a way to minimize any disputes.

For more information about estate planning in Orlando, FL (and throughout the rest of Central Florida), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: New York Times (Oct. 31, 2017) "The Messy Family Battle for Starrett City."