Estate Planning Considerations

The following is intended to provide you with an outline of those estate planning factors that you may want to address.

I. Estate and Gift Tax. Proper drafting of a Revocable Trust Agreement or a Last Will and Testament will provide an opportunity to insure that you maximize all available savings provided by the Internal Revenue Code with regard to estate and gift taxes.

  1. Maximizing unified credit allowance.

  2. Utilization of the marital deduction allowance.

  3. Maximizing the generation skipping tax allowance.

  4. Charitable deductions.

II. Avoiding Probate. The use of a Revocable Trust Agreement allows assets titled in the name of such an agreement to bypass administration monitored by the probate court.
  1. Avoid court costs.

  2. Minimize attorney and fiduciary fees.

  3. Avoid delays caused by court interference.

  4. Avoid other court imposed problems such as restricted accounts and/or requiring a personal representative to post bond.
III. Avoid Guardianship. A Revocable Trust takes into consideration the disability of the Grantor of the Trust (person who creates trust document), and provides for the continued management of assets in the event of such a disability.
  1. Avoid court costs.

  2. Avoid court interference.

  3. Avoid attorney's fees.

  4. Avoid guardian fees.

  5. Provide for continuity in management of assets, including family business interests.

IV. Providing for Trusts for Children and Grandchildren. Proper estate plans should also consider the use of making gifts to children and grandchildren in trust for a variety of reasons.

  1. Provide for educational and health related costs.

  2. Providing for grandchildren born after death.

  3. Spendthrift concerns.

  4. Protect assets from an "in-law", who may otherwise be a "forced heir".

V. Provide for Continuity of Family Business Interests after Death. Many times a family business which has been in operation for many years must be liquidated upon the death of the founder of the business. A trust would allow for the continued operation of a family business, and the ability to pass such a business interest down from one generation to the next. This may be especially relevant where certain relatives are actively involved in the operation of a family owned business, while other relatives have chosen other career paths.

VI. Allocating Estate Taxes. Proper estate planning documents will provide you with an opportunity to select what assets or from what shares estate taxes will be paid prior to other assets or interests being appropriated to pay such taxes.

VII. Making Proper Disposition of Personal Effects. Under the terms of your will you have the opportunity to direct how certain personal effects, such as jewelry, art work, furniture, etc. may be gifted to heirs of your choosing. This may be appropriate if you have items of sentimental value that you desire to be given to a select heir rather than being sold by your estate.

VIII. Appointing Personal Representatives and Trustees. The personal representative is the person or entity chosen to administer a person's estate. Florida law requires that individuals be residents of the State of Florida, unless they are related by blood. The use of a revocable trust allows you to name a trustee, who like a personal representative, administers a trust agreement (as opposed to the personal representative administering the terms of your will). There currently are no such restrictions on who may or may not act as a trustee in the State of Florida, including the fact that there is no restriction that an out of state non-relative may act. Additionally, there are many other facts that you may consider in selecting your personal representative or trustee.

IX. Health Care Decisions. While the revocable trust agreement provides for the continued management of assets in the event of an incapacity, it does not grant a person authority to make informed medical decisions on behalf of another. A Designation of Health Care Surrogate allows you to designate another individual to make health care decisions on your behalf. This may be necessary in instances where you are unable to grant medical consent, or authorize certain medical procedures.

The foregoing is intended to be a brief outline on certain factors and other important considerations made when preparing an estate plan. Should you have any questions regarding the above, or other issues not presented in this outline, please do not hesitate to contact Michael D. Levin, Esq. of Grumer & Levin, P.A.