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Palm Beach Estate Planning Blog

Are your documents ready for trust and probate administration?

If you created an estate plan, you are well ahead of many Palm Beach residents. You took the time to plan what you want to happen during trust and probate administration after your death. However, depending on what has happened in your life since you created that plan, it may no longer accomplish your goals and make the process easier for those you will leave behind.

No matter how well-structured your estate plan was when you created it, major events in your life could require some revision to it. For instance, if a child was born, you got divorced or you became estranged from a child, you may need to rethink portions of your plan. The beginning of the year is a good time to review your these documents to make sure they still apply to your current situation and family dynamic.

Divorce, wills and other estate-planning documents

Divorce is a time of many changes for those going through it, whether here in Palm Beach or elsewhere. With numerous tasks to attend to prior to the conclusion of the divorce process, it can be easy to forget that any wills and other estate-planning documents probably require changes. Since no one can predict the future, the sooner these documents are reviewed and appropriately changed, the better.

Palm Beach residents should be aware of the fact that as long as they remain legally married, a future former spouse could still obtain control over various aspects of their estates until the divorce is final. The existence of the divorce proceedings is not necessarily enough to keep the other party from gaining this control. This might include powers of attorney that appointed the other party as the agent.

Do trusts provide advantages that wills don't?

When Palm Beach residents talk to anyone about estate planning, one of the first things they probably hear is that they need a will. While that is good advice, other circumstances involved could require more than just a last will and testament. Trusts have certain benefits that wills cannot provide, and whether to use them depends on the goals and wishes of the individual considering them.

One of the most popular trusts is the revocable living trust. It is formed during an individual's lifetime and can be changed, modified or even cancelled as long as the maker (also called the trustor) is alive and not incapacitated. Wills can also be changed, but they do not provide an incapacitated person with any benefits. A revocable living trust can provide financial stability during such a time since the successor trustee can simply step in and take over the management of the assets in the trust.

Does your debt die with you?

When drafting a will in Palm Beach, accounting for all of your assets may seem an obvious step. Having a solid plan for the disbursement of your assets after you die should take a relatively high spot on your to-do list.

What happens to your debts upon your death? Are there directives that need to go in your will? Some debtors receive payment out of your estate. Find out what is paid and what can bleed your estate dry.

Beneficiary designations can affect estate administration

Palm Beach parents do what they can to protect and provide for their children. For those who want to make sure they continue to do so in the event of their death, they may decide to take out a life insurance policy that benefits the children. The way that the beneficiary designation for a policy is done has a profound effect on estate administration if the children are minors when the policyholder passes away.

Some people make the mistake of listing their child as the beneficiary of a life insurance policy. While this may make a Palm Beach parent feel good, it could cause significant issues if the parent passes away while the child is still a minor. This is because minors cannot directly inherit property, which means that arrangements will need to be made to hold the proceeds from the life insurance policy for the child.

Probate administration: Make a list and check it twice

When it comes to closing out the estate of a deceased loved one, numerous tasks require the attention of surviving family members. In order to make sure that nothing is missed during the Palm Beach probate administration process, it would probably make sense to make a list and check it often. As tasks are completed, they can be marked off the list.

Whether it is an executor or another family member, someone needs to inform -- well -- everyone of the death. This means creditors, banks, the Social Security Administration and anyone else that requires notification. The sooner this task is completed, the better, since failing to do so in a timely manner could cost the estate money, which would reduce the amount of distributions later.

Were digital assets accounted for in estate-planning documents?

One of the primary duties of a Palm Beach executor is gathering all of the decedent's property. In most cases, he or she can look to the estate-planning documents for clues as to what property there is and where it may be located. However, if a plan fails to include the digital assets, then matters could get more complicated.

Most people have at least some small online presence, but they may not think it is important to account for that presence in estate planning documents. Many Palm Beach residents are tech savvy, but still consider only physical assets as those that need to be dealt with upon death. Believe it or not, even a Facebook or Twitter account will require some sort of disposition after death.

Does probate always take a long time?

It could take months or even years to close out an estate. Many Palm Beach residents hear that when a loved one passes away. Fortunately, not all probate administration takes that long. In some cases, it could happen more quickly.

Florida has what is called a summary probate administration. It could reduce the time it takes for property to be distributed to heirs if the decedent passed away at least two years prior or the estate meets the statutory definition of small. In fact, the typical turnaround time under this process could be as little as a week.

What is breach of fiduciary duty?

If you have agreed to become the executor of someone’s Florida estate or the trustee of his or her trust, you have assumed a fiduciary role whether or not you realize it. While you may have many fiduciary duties depending on the specific provisions of the will or trust in question, your most important duty is to always manage and disburse the estate or trust assets for the benefit of the beneficiaries or heirs. They are the people for whom you serve as fiduciary.

As a fiduciary, you are not required to perform your duties perfectly at all times. Fiduciaries are human beings, and humans make occasional mistakes. No one will blame you or sue you if you make an inadvertent arithmetic error or if one of your investments of estate or trust assets fails to live up to its expectations. The beneficiaries or heirs can only sue you if you deliberately do or fail to do something that is not in their best interests. That is the classic definition of breach of fiduciary duty.

Some trusts are not really irrevocable

During their lives, many Palm Beach residents create an estate plan that they can change and that will serve them. Part of those plans may include revocable trusts, which means they can be changed, and that become irrevocable, which means they cannot be changed, upon their deaths. Because the name implies that they cannot be changed, beneficiaries and heirs may not realize that the possibility exists.

The avenues available for revoking, terminating or canceling an irrevocable trust depend on a particular individual's status. Heirs are people that could legally inherit, but are not specifically identified in a trust or other estate-planning documents. Heirs cannot request a revocation of a trust unless they are also beneficiaries. Instead, an heir would contest a trust in much the same way that a will would be contested.

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