ZAPICO & ASSOCIATES, PA.
What is a Trust?
A revocable trust is a document (the “trust agreement”) created by you to manage your assets during your lifetime and distribute the remaining assets after your death. The person who creates a trust is called the “grantor” or “settlor.” The person responsible for the management of the trust assets is the “trustee.” You can serve as trustee, or you may appoint another person, bank or trust company to serve as your trustee. The trust is “revocable” since you may modify or terminate the trust during your lifetime, as long as you are not incapacitated.
During your lifetime the trustee invests and manages the trust property. Most trust agreements allow the grantor to withdraw money or assets from the trust at any time, and in any amount. If you become incapacitated, the trustee is authorized to continue to manage your trust assets, pay your bills, and make investment decisions. This may avoid the need for a court-appointed guardian of your property. This is one of the advantages of a revocable trust.
Upon your death, the trustee (or your successor if you were the initial trustee) is responsible for paying all claims and taxes, and then distributing the assets to your beneficiaries as described in the trust agreement. The trustee’s responsibilities at your death are discussed below.
Your assets, such as bank accounts, real estate and investments, must be formally transferred to the trust before your death to get the maximum benefit from the trust. This process is called “funding” the trust and requires changing the ownership of the assets to the trust. Assets that are not properly transferred to the trust may be subject to probate. However, certain assets should not be transferred to a trust because income tax problems may result. You should consult with your attorney, tax advisor and investment advisor to determine if your assets are appropriate for trust ownership.
What is a Health Care Surrogate?
A Health Care Surrogate Designation is a document in which you designate someone else to make medical decisions if you are unable to make those decisions. Unlike a Power of Attorney, a health care surrogate decision-maker has no authority to act until such time as the attending physician has determined the principal lacks the capacity to make informed health care decisions. (In instances where the attending physician has a question as to whether the principal lacks capacity, a second physician must agree with the attending physician’s conclusion that the principal lacks the capacity to make medical decisions before a surrogate decision-maker’s authority is commenced.) Many medical providers prefer a designation of health care surrogate for health care decisions because the document is limited to health care. However, a Durable Power of Attorney specifically for health care may enable the agent to assist the principal in health care decisions even though the principal may not completely lack capacity.
What is a Durable Power of Attorney?
A Power of Attorney is a legal document delegating authority from one person to another. In the document, the maker of the Power of Attorney (the “principal”) grants the right to act on the maker’s behalf as their agent. What authority is granted depends on the specific language of the Power of Attorney. A person giving a Power of Attorney may make it very broad or may limit it to certain specific acts.
What are some uses of a Power of Attorney?
A Power of Attorney may be used to give another the right to sell a car, home or other property. A Power of Attorney might be used to allow another to access bank accounts, sign a contract, make health care decisions, handle financial transactions or sign legal documents for the principal. A Power of Attorney may give others the right to do almost any legal act that the maker of the Power of Attorney could do, including the ability to create trusts and make gifts
What is a Will?
A will is a written document that disposes of all of your assets at time of your death. While any sort of property may be transferred by will, there are some particular interests in property that cannot be willed because the right of the owner terminates automatically upon death, or others have been granted rights in the property by Florida law. Some examples of these types of property rights or interests are your homestead, a life estate interest in the property, joint ownership with another person or persons with rights of survivorship. You may also not disinherit a spouse or a minor child.
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In determining your individual estate planning goals, our Miami based firm actually create documents that define a set of detailed instructions for your family, friends, and trusted associates to follow.
Many estate plans are created for the sole purpose of avoiding probate. While avoiding probate may be a big enough reason to justify the creation of an estate plan, there are far more important issues to deal with in the documents. One of these is preparing and planning for incapacity or death. It is important to create a situation where your family and the ultimate beneficiaries can take care of you in the event you need someone to do so.
Many plans can create problems and conflicts between your children. It is important to understand the family dynamics and design systems that work well with your specific family dynamics.
What is a Living Will?
A Declaration of Living Will specifies a person’s wishes as to the provision or termination of medical procedures when the person is diagnosed with a terminal condition, has an end-stage condition, or is in a persistent vegetative state. A living will and a health care surrogate designation are termed “health care advance directives” because they are made in advance of incapacity and need. If a person is unable to understand or unable to communicate with a doctor, a living will is a legally enforceable method of making sure the person’s wishes are honored. Even if a person has a living will, a person’s agent may make health care decisions if the Durable Power of Attorney specifically gives this right
Who needs a Will?
Everyone should have a Will. With a Will, you decide who gets your property instead of the law making the choice for you.
You may name the personal representative (executor) of your will as you choose, provided the one named can qualify under Florida law.
You can name a guardian for your minor child and decide at what age your child receives his/her inheritance, provided they are over the legal age of 18 years old.
You may make gifts, effective at or after your death, to charity.
You decide who bears any tax burden, rather than the law making that decision.