If I Have A Will Does My Estate Have To Be Probated?
Video Summary
If I have a will, does my estate have to be probated? Well, the question is not whether or not you have a will or you don’t have a will. The question is: do you have any assets that are titled just in your name that do not designate a beneficiary?
An example of assets that you have that name beneficiaries is, let’s say, a life insurance contract. That’s your asset. You designate a beneficiary, so it’s controlled by the life insurance contract and is payable to whoever you designated as a beneficiary. So that doesn’t have to be probated.
Same thing with IRAs, 401(k)s. They all – you’ve designated a beneficiary to receive the benefits of these, really, trust. An IRA, or a 401(k), or annuities, that’s all controlled by contract, and it says that when you pass away who’s to receive those assets.
Another example of assets that name a beneficiary: if you have a joint account, which is usually the case between husband and wife. They own their bank accounts jointly. They own their real estate jointly. And if they do, when one of the spouses pass away, well, the property automatically passes to the survivor. Any other assets that you own as joint tenants with right of survivorship passes automatically, or pursuant to the contract. You also look at bank accounts. You look at bank accounts that have a “payable on death” or your brokerage account, which is “transfer on death,” and so those assets pass pursuant to your contract with the brokerage house, or whatever financial institution.
However, if you have an asset that’s just in your name, then your estate must be probated. It doesn’t matter whether you have a will or you don’t have a will; that’s what determines whether or not you have a probate proceeding.
So what’s the advantage of having a will? Well, a will says – directs who you wish to receive that asset so that you don’t leave it to the state of Florida and the statutes to say who receives the assets. So you can name who you want to receive your assets under a will, and you can also designate who you wish to be in charge of your estate, which is called an “executor” or a “personal representative.”
So the question is not whether you have a will and it avoids probate, or whether you die without a will. It only matters whether or not you have your – you die with assets that are just in your name and we must have a probate proceeding to determine who the beneficiary of that asset would be. By looking at a will or looking at the Florida statutes, the Florida statute does set forth that if you die without a will, then it passes to all of your heirs, or your children, or, if you have deceased children, to their children or grandchildren. And it goes on to explain who else would receive it if you don’t have any children.
So if you have any questions about an estate proceeding, with or without a will, well, give me a call at (727) 847-2288.
What Is A Trustee And Who Should Be A Trustee?
Video Summary
What is a trustee, and who should be a trustee? A trustee is the person who is in charge of a trust. As the word trust means, you are in – you’re trusting somebody with your assets, and the person that you’re trusting with your assets is called a trustee. And so they’re the ones that have certain powers – usually to invest the money – and they are given directions under the trust instrument to decide or given direction as to how they should spend the money or use the money. Sometimes a trust provide for discretionary disbursement, so the trustee uses their own judgment as to how much money should be distributed out to a beneficiary, such as a minor child, for their care or for their education.
So that’s – and the trustee can be anybody. A trustee can be a bank, which – financial institutions. They really go out and look for that – trust departments – however, your estate needs to be sizable in order for them to serve and to take charge of your estate. I believe that they start at about $500,000.00. Smaller estates usually have individuals who are concerned.
So, well, who should you designate as the trustee? Well, many times, whenever we do estate planning documents, you start by naming yourself, which is a little hard to explain whenever you’re trusting yourself with the trust – with your own assets, but that’s really what the trust instrument says. You direct yourself as the trustees to use the money for your benefit, and you’re the one who established the trust as the settlor or the grantor of the trust. However, it’s usually an estate planning tool, and then you designate what you want done with your assets when you pass away.
Course, when the trustee passes away, there needs to be a successor trustee. Well, who should you name? Well, usually, in the estate planning scheme of things, or whenever you prepare a trust for estate planning purposes, customarily you name a family member. Sometimes you might name a professional, such as your attorney, your accountant, or financial advisor – they have some restrictions as far as doing that – but many times it’s a family member who you believe has good business sense and will follow your directions.
A lot has to do with whether or not the term – under the terms of the trust you just want make distribution immediately upon your death rather than having it held for an extended period of time over, let’s say, a minor’s time until they reach age 25. Well, if they’re gonna pay out money, well, then you want someone that’s sort of sensitive to raising a child and understanding how, whenever you’re 18 years old or younger, that you’d like to have a brand-new Corvette or some other high-performance automobile. So you would want the trustee to think like you would do and say, “Well, a Toyota Camry – a used Toyota Camry with about 60,000 miles will do just fine to get you to and from school, and be dependable transportation.”
But you sorta understand you need to look at what the circumstances are as to who you appoint as your trustee. You can name multiple trustees and have one be responsible for the financial investments. There’s any number of people who you can name, and why you would name them, but I usually see where a family member is designated. And sometimes. in the absence of a family member, they may ask their attorney or accountant to serve. If they ask the attorney to sign, then a disclosure must be initialed at the time the document’s signed advising you that there can be additional charges to serve as a fiduciary – whether it be a trustee or personal representative – by the attorney, that you’ve been explained that you can designate anybody you want, including a bank or family member.
It’s very hard to say, well, who should serve as trustee. It depends on your individual circumstances and what family members or persons you know that are available to be able to do what you would like done after you pass away.
So if you’d like to set up a trust, or have some questions about a trust, give me a call at (727) 847-2288.
Should I Give My Children My Money Now To Qualify For Medicaid In The Future?
Video Summary
Should I give my children my money now in order to qualify for Medicaid for skilled nursing care in the future?
Many people come to my office and ask this question. The answer to that question is an emphatic no. You should absolutely not give your children your money in order to qualify for Medicaid for skilled nursing care, and here’s the reason why. Medicaid has a five year look-back period. Well what is included in that five year look-back period? One of the things that Medicaid examines in reviewing your bank statements, which are required as a part of the application process is has the applicant made any improper transfers and/or gifts in the preceding five years. If you give your children your money, that is going to be considered an improper gift and/or transfer, which will affect your eligibility for Medicaid for skilled nursing care.
Let me give you a little bit of an example. Let’s say that Mom wants to gift $56,000 to her son, and we’ll use the son as John. Well John takes the $56,000 and let’s just say that John takes this a year before Mom actually needs to apply for Medicaid for skilled nursing care. In that situation, Mom is looking at a penalty period of seven months of ineligibility to be qualified for Medicaid for skilled nursing care. Well how do we get that number? Well, Medicaid uses a divisor of approximately $8,000 in order to calculate this ineligibility period. So when you take the $56,000 gift, divided by the $8,000, you get seven months of ineligibility. So that’s one of the main reasons that you don’t want to gift away your assets to your children or siblings or family members in order to qualify for Medicaid for skilled nursing care. There are many avenues in order to qualify for skilled care through Medicaid in which you do not have to deplete all of your resources by providing the money to the nursing home, and there are viable what’s called “spend down” methods.
If you have questions about these spend down methods, or are interested in creating a Medicaid plan that is best for you and/or your family member, please give me a call here at Waller and Mitchell, as I’m sure I can assist you with your needs. Call me at 727-847-2288.
- Published in Medicaid Planning, Videos
What Is Elder Law?
Video Summary
What is elder law?
Many people ask me that question: Well, what exactly is elder law, or what do elder law attorneys do? Well, there are a few different practice areas that elder law attorneys cover. One of which is Medicaid planning, specifically for what’s called the ICP program – also known as the Institutional Care Program. So, getting families qualified for Medicaid coverage for skilled nursing care, through a variety of methods, including a Medicaid plan, even as much as drafting a Miller Trust, or a personal services contract. So that’s one component of elder law.
Another component of elder law would be probate, whether it be a summary administration or a formal administration. So, in Florida, probate is required to transfer title to assets in a decedent’s name, absent joint ownership, or absent some other previous mechanism, such as a trust, to go and pass ownership. So probate is a part of elder law. Another component of elder law would be guardianship. Guardianship has two different forms incapacity guardianship which, in the elder law, is really gonna be used a majority of the time. And then you also have minor guardianship, so guardianships are a huge part of elder law, as far as that’s concerned.
You also have estate planning. Estate planning is a very large part of elder law. Estate planning encompasses creating actual plans for your clients, as well as creating documents for their future, as far as last will and testaments, powers of attorney, healthcare surrogate forms, and declarations of preneed guardians. So those are some components of elder law, and what elder law attorneys do.
Our office, here at , we handle all of those areas of the law. I specifically handle areas of the law, as well, and we would love to help you. If you have an elder law question, or an elder law need, please feel free to give us a call, at 727-847-2288.
- Published in Estate Planning, Videos
Do You Need A Lawyer To Administer A Trust?
Video Summary
Do you need a lawyer to administer a trust?
This usually comes up whenever we have a person who sets up a revocable trust for the purposes of avoiding probate, and when they pass away, they designate someone as the successor trustee. So, the successor trustee then becomes the owner of the, or entitled to the property that’s held in the trust, and they can take care of distributing the assets to the various beneficiaries. Whether or not the person needs or should have an attorney depends on the complexity of the trust.
A trust, once the person who set it up passes away, is supposed to obtain a federal identification number, because it then becomes a separate tax-paying entity. And so that, whenever any income comes in, it’s not taxed to the successor taxee under their individual social security number. There can be, also, questions, if this is an ongoing trust, as far as what duties you owe to the various beneficiaries.
Under the Florida statute, a successor trustee is to send or notify the beneficiaries of the trust, and that they are beneficiaries. They also should serve upon them an inventory, letting them know what assets are in the trust. And, further, if it’s an ongoing trust, or takes some time to administer, they should send out an annual accounting, giving the beneficiaries notice that if they have any complaints about how the trustee is handling the finances of the trust, they have six months in which to object.
One of the most often asked questions of the successor trustee _____ is, “What do I have to do as far as paying the creditors of the deceased settler, or the person who set up the trust?” This is somewhat problematic, in that there may not be a probate proceeding, and the trustee would be responsible for paying those bills. A notice of trust should be filed with the clerk of the court.
The question is, “Well, should I make distribution of all these assets? And then, what happens if a bill comes in?” Well, that is a real problem, as far as giving the successor trustee a definitive answer, in that the creditors can file claims or sue the estate and trust up to two years after the person’s death. So, it’s important to understand who the creditors are, and do a reasonable search to determine the ascertainable creditors.
The other issue is filing a fiduciary tax return – that is, a tax return by the trustee that reports whatever income has come in, and then sending out the notice to the beneficiaries of how much they must pay in taxes. So all of these are matters that need to be addressed, whenever you become a successor trustee, and it’s usually sometimes not within the successor trustee’s expertise, if they are not a professional trustee, in order to do that.
So, it may be wise to consult with an attorney, and discuss with them whatever trust that you may be the successor trustee, to determine just exactly what you need to do, and whether or not you need to engage the services of the attorney. As far as the administration of the trust, so you do not become personally liable for any of the debts, and be protected as far as the beneficiaries are concerned.
If you’d like some advice, or set up an appointment to discuss administration of a trust, well, give me a call, at 727-847-2288.