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Melbourne Florida Estate Planning Law Blog

Why people choose to create silent trusts

When people in Florida think about planning for the future, they often want to use their wealth to make sure that their children will have a good life. Trusts can be an ideal means to accomplish that goal, as they pass outside of the probate system and they can provide significant tax benefits during the creator's lifetime. However, some worry about the stereotype of the spoiled child with a trust fund; people may not feel motivated to achieve their own academic or career successes when they know from an early age that a large sum of money is waiting for them.

However, when people create a trust, the trustee has a duty to inform the beneficiary about the trust's existence and its administration. This is one reason why many people are opting to create silent trusts. The creator of a silent trust explicitly waives the trustee's duty to inform the beneficiary, allowing the trust to be created without the eventual recipient's knowledge. Typically, the trust is to be kept silent for a fixed number of years or until the beneficiary reaches a certain age, usually 25. By using silent trusts, people can reap the tax rewards of transferring wealth for years before they are ready to actually pass on the contents of the trust.

Avoid family fights with proper estate planning

There are many ways in which Florida residents may inadvertently cause a fight between family members after they pass. However, there are several steps that they can take to keep family discord to a minimum. For instance, they can be sure to appoint an executor who is ethical and organized. Typically, an individual will appoint a good friend or their oldest child to serve as executor.

If a beneficiary is getting a large sum of money, it should be allocated in a manageable way. Instead of directly giving that person the money, an estate owner could put the funds in a trust. From there, it should be distributed in a reasonable amount of time.

Important steps to implementing an estate plan

Even after one completes an estate plan in Florida, there may be some important extra tasks to keep in mind. Developing the drafts of the document, working with an attorney to perfect it and signing off on the final version is a major accomplishment. Still, follow-up can be critical to make sure that an estate plan has the full effect that its creator desires.

One of the most important actions relates to a type of transfer that generally takes place outside of the context of wills and trusts. Life insurance policies, retirement accounts and other funds with transfer-on-death policies all require up-to-date, correct beneficiaries. The owner of the account must file beneficiary designations with the insurance company or account manager. If people do not designate their beneficiaries properly, it could significantly affect their overall plans for their estate.

How to leave assets to children who are still minors

There are numerous considerations for you to make regarding your estate plan. While many people craft a will or trust to pay the least amount in taxes, it is also vital to structure the plan in such a way that it will not lead to conflict within the family. 

Unfortunately, many people end up making mistakes in their estate plans. This matter becomes much more complicated when a person passes away with children who are still younger than 18. To prepare for anything, it is vital to create a will in such a way your children will receive the full amount of their inheritance according to your wishes. 

Creating a philanthropic legacy with an estate plan

For some people in Florida, philanthropic giving could be an important part of an estate plan. In addition to creating a legacy, it can save money on taxes and benefit family members as well as the charity.

Someone who is unsure as to where to direct their philanthropic giving for an estate plan should consider what places they are already donating to. They should also think about what issues worry them and what their values are. Taking all of these factors into consideration may help guide them toward a decision. They may want to seek input from family members as well.

How not to inherit timeshares from parents

Not all parents in Florida prefer to pass everything down to their heirs. This is especially true of timeshare properties that have contracts attached along with an assortment of responsibilities. Annual maintenance fees, for instance, can easily exceed $1,000 for higher-end properties. Plus, owners may have to foot some of the bill if a property sustains damage from a natural disaster. One way to avoid passing ownership onto heirs is to create a trust to hold timeshare interests.

While there are many wonderful things about including trusts in estate planning efforts, some beneficiaries may not be so thrilled about related attendant hassles and expenses. Fortunately, there are other ways to avoid passing along timeshare ownership. In situations where it's clear that grown children aren't interested in a timeshare and owners are in poor health, it may be possible to ask the resort to take back the timeshare if all financing has been paid off.

Estate planning can help avert family feuds

When people in Florida consider their wishes for the future, they may hope to see their loved ones living well and enjoying life, including with the support of any inheritance left behind. However, for far too many families, conflicts can arise after the passing of a loved one that lead to long-running disputes over an estate. People making plans for their property can keep several key issues in mind in order to minimize the likelihood of conflict and maximize their potential to fulfill their wishes for their estate.

One of the most critical factor in dealing successfully with an estate is choosing the right executor when making a will. Because the executor will have to deal with all of the complications and concerns that come with the probate process, it is important that the executor is someone well-suited to this skilled, detail-oriented job. In many cases, people choose an executor due to their close relationship or for an arbitrary factor like being the oldest child. However, when the executor is not careful with estate funds or fails to follow up on legal issues and deadlines, there can be significant fallout. Trust may be lost, and the conflict could even head into court.

In many cases, estate taxes can be reduced with planning

With proper planning, Florida residents who have sizable assets can lower the effect of estate taxes. The most common strategies include making annual gifts and contributing funds to charities or charitable lead trusts. In some cases, it may be advisable to use an irrevocable trust to lower estate taxes, and insurance policies can also play a role.

Well-structured annual gifting can significantly lower the size of an estate while bypassing taxes. Federal tax rules allow individuals to give away as much as $15,000 worth of assets annually without gift taxes applying. A married couple can make gifts of up to $30,000 without the recipient having to pay gift taxes.

Top reasons to create an estate plan

Those who live in Florida and other states are encouraged to create an estate plan as it can bestow a variety of benefits. For instance, it can help a person retain greater control over his or her assets while alive but incapacitated. This is accomplished by designating a medical and financial power of attorney who can make decisions according to the incapacitated individual's prior instructions. An estate plan will also make it easier for someone to control where his or her assets go after death.

Individuals are encouraged to have a will or trust or name beneficiaries when appropriate. These documents should be reviewed on a regular basis to ensure that they still meet the needs of the person who created them. Estate planning may involve putting assets into trusts or similar entities. This is done to provide protection against lawsuits by family members or claims from creditors. An insurance policy can also help ensure that assets are protected at all times.

Reasons estate planning is not just for the old

Items such as trusts and powers of attorney typically become associated with the old and wealthy. However, younger people have begun to realize the importance of having a reliable estate plan. People as young as 18 can create a power of attorney and health care directive, so they are ready in case they ever become unable to make their own decisions related to health and finances. 

You do not want to wait too long to create an estate plan. Here are some of the basic reasons you should look into creating a will early in life as you start hitting major milestones. 

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Feel free to contact us and schedule an initial consultation where we can review your circumstances in an intimate setting and discuss how our Brevard County Elder lawyer can help you. Simply call Amy B. Van Fossen, P.A., locally at 321-426-1848 or toll free at 800-495-9153. We look forward to meeting you.

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