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Palm Beach Estate Planning Blog

Wills can either help or hinder the administration of an estate

Many in Palm Beach and across the country were saddened by the recent death of music legend Aretha Franklin. It's surprising that someone of her status and wealth did not even have a will. Without at least that document, the administration of her estate will likely be challenging. The challenges her surviving loved ones face may make it clear why wills are important for every adult no matter how many assets exist.

Without a will, Franklin's estate will be subject to the intestacy laws of her home state. That means that it will be up to the state to determine who inherits her estate. In addition, taxing authorities may receive a significant portion of her estate since no efforts were made to reduce the amount of her taxable estate.

Protecting yourself as a guardian often means keeping everything

When a Palm Beach resident realizes that a loved one may no longer be able to make decisions for him or herself, that person may step up to help. From the moment he or she does that, it may be a good idea to begin creating a paper trail. Once an individual officially becomes a guardian for a loved one, keeping good records is essential.

Because a guardian takes over the decision making for another person, called the ward, the courts take these responsibilities seriously. A Palm Beach resident will want to keep every receipt, piece of paper and document pertaining to the guardianship. It may seem like overkill to do so, but if anyone should question the trustworthiness or actions of the guardian, any action taken on behalf of the incapacitated person can be substantiated.

The primary difference between revocable and irrevocable trusts

As Palm Beach residents begin their estate planning, they will more than likely be confronted with numerous decisions to make. If it turns out that one or more trusts would work best for a particular situation, then one other decision will need to be made -- whether to make a trust revocable or irrevocable. The trust creator needs to decide whether it would be more advantageous to be able to change, modify or terminate a trust rather than not be able to do so.

Revocable trusts are quite popular. People like the idea of retaining more control over the trust and the assets in it. This provides the ability to fix any mistakes or tweak the trust provisions while the grantor (the trust creator) is still alive. One of the major downsides to a revocable trust is that the IRS, creditors and possibly an ex-spouse retain the right to come after the assets in the trust since the grantor remains the owner. However, this type of trust still provides privacy, the ability to avoid probate and the ability for someone to immediately take over in the event of incapacity.

3 types of guardianships to consider

If you have a loved one who is in need of physical assistance, you might be wondering what your best options are. The answer to this depends on the specifics of your situation. An aging parent who needs help planning her or his estate will have different needs than a mentally-disabled adult who requires assistance with managing daily responsibilities. In either case, though, a guardianship may be best.

Guardianships are not one-size-fits-all. On the contrary, several options exist when it comes to tailoring a guardianship to its ward. Consider the following three options if you believe a guardianship might be the right legal step for you and your loved one:

Trusts are nothing without the right trustee

Many Palm Beach residents go beyond a last will and testament when it comes to providing for their families after death. They also use trusts to pass on assets to loved ones in a more controlled, private and protected manner. Regardless of how carefully such documents are drafted, executed and funded, without the right trustee they may not be worth the paper upon which they are written.

This makes choosing a trustee one of the most important tasks for the trust creator, also known as the grantor. The first decision is whether to choose an individual or a company to serve in this capacity. More than likely, many Palm Beach residents will choose an individual. That person could be a spouse, child or friend. The main criteria is that the grantor has faith that the person chosen will abide by the terms of the trust, which are his or her wishes.

Only certain people can contest wills

After the loved ones of Palm Beach residents pass away, the task of wrapping up the estates of the deceased begins. If wills exist, these documents are then filed with the court and probate proceedings begin in most cases. Once a particular will is examined, someone may believe something just is not right, and a contest to the will could be considered.

However, only certain people can file a will contest. In order to have "standing," or the legal right to challenge a will, an individual must fall into one of three categories. For instance, a person who would have inherited under the state's intestate laws could challenge a will. Others include those who inherited under a previous will and those who inherit under the current will. Most often, these individuals include spouses, children or any other "interested person" who may assert a right to property included in the estate.

Wills are not set in stone

Some Palm Beach residents are under the impression that, once they execute an estate plan, they cannot ever change it. Fortunately, wills are not set in stone. One of the best things about estate planning is that it can change as people's lives do.

When an estate plan is set up, it reflects how a person's life is at a certain point in time. When children are born, couples get divorced or loved ones die, those changes could affect the plans one has already made. This may be why some people wait. Perhaps they believe that, after they are through growing their families and their estates, they should worry about drafting a will.

Naming the right people in wills

With all of the decisions that Palm Beach residents make when planning their estates, one could make or break the entire thing -- the people appointed to carry out their wishes. Most of the documents that make up an estate plan require the designation of one or more people who will be in charge of executing the instructions of the person creating the plan. When it comes to wills, two positions generally need filling -- the executor and the guardian.

The executor is the one responsible for closing out the estate after the death of a Palm Beach resident. This individual will take care of numerous tasks. Certain tasks must be completed within certain time frames. This position does not necessarily require knowledge of the law, but it does require the ability to find help when needed and work through the grief.

Understanding charitable trusts

If you enjoy giving back to your Florida community by donating to your church or favorite charity, have you ever thought about establishing a charitable trust to give your donations more structure and certainty? If you are unfamiliar with charitable trusts, it likely will surprise you to learn that not only can such a trust benefit your church or charity, it also can benefit you in a variety of ways.

When you set up a charitable trust, you can split the assets you put into it between your designated charitable beneficiary and a designated noncharitable beneficiary, who can be you yourself if you so desire. In addition, you can designate yourself as your trust’s trustee.

What powers may the court grant in a guardianship

When Palm Beach residents reach the point where they believe a family member can no longer act on his or her own behalf, they may begin to explore the alternatives. If the incapacitated individual does not have powers of attorney in place, it may be necessary to seek a guardianship. For those contemplating serving as the guardian, it may be helpful to understand the powers a court may grant.

A potential guardian may want to understand that these powers are actually duties to be fulfilled on behalf of the incapacitated person. The court takes these responsibilities seriously, and so should the guardian. For this reason, not just anyone may serve in this capacity. A potential guardian must be at least 18 years of age and not have a criminal record containing convictions for either gross misdemeanor or felony charges associated with dishonesty such as embezzlement, bribery or forgery, among other things.

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