Estate Planning

“… in this world nothing can be said to be certain, except death and taxes.”

– Benjamin Franklin

Estate Planning

Estate planning encompasses a variety of tactics used to formulate a plan that is encapsulated in estate planning documents and other legal instruments.  Estate planning includes planning for incapacity, gift and estate tax planning, planning for the disposition of assets upon death (or in other specified circumstances), and asset protection.  It includes the creation of wills, trusts, deeds, durable powers of attorney, designation of health care surrogates, living wills, designation of preneed guardian, designations of health care surrogates for minor children, and designations of guardians for minor children.  Estate planning may also include advice regarding the manner in which assets should be titled, the determination as to whether and in what amounts to purchase life insurance, ensuring the preferred and proper use of beneficiary designations, and establishing residency in the State of Florida. 

The professionals at Merriman Law Firm, P.L.L.C., can assist with all of your estate planning needs.  Robin D. Merriman II, J.D., LL.M., B.C.S., has been certified by the Florida Bar as an Expert in Wills, Trusts and Estates and has a Master of Laws (LL.M.) from New York University School of Law.  Robin has experience handling estate planning matters for high-net worth individuals.  For these individuals, he has assisted with tax planning related to the Federal Gift, Estate, and Generation-Skipping Taxes and in completing Federal Gift Tax Returns (IRS Form 709’s) for those clients who have made taxable gifts as part of their planning.  He has experience planning the estates of business owners, including setting up various business entities, and he has prepared real estate documents and completed real estate transactions as part of his estate planning practice.  On the other end of the spectrum, Robin has assisted clients who have less complex situations, preparing simple wills and simple trusts, as well as durable powers of attorney, designations of health care surrogates, living wills, designations of preneed guardians, and enhanced life estate deeds (commonly referred to as “ladybird deeds”).  Robin has also prepared health care and guardianship directives for parents of minor children, which provide advanced directives for the care and custody of children in the event of that a tragedy or catastrophe affects the parental capabilities of the minors’ parents.

Planning for Death

Ensuring that one’s property finds it way to the intended beneficiaries is one of the most important aspects of estate planning.  Typically, when prospective clients initiate contact with an attorney for the purpose of estate planning, it is this element of estate planning to which they are referring.  Although considerations such as the nature of the client’s assets, the structure of the client’s family, and the desires of the client are primary in formulating the client’s estate plan, the disposition of assets upon the client’s death is generally governed by and organized through the creation of a last will and testament and a revocable living trust.  Both the will and the trust are highly malleable documents that can be created with great flexibility in order to ensure that the testator (the person who creates the will) or the settlor (the person who creates the trust) control the disposition of their property upon their death.

It is not merely the disposition of property that is the subject of planning for death.  One of the most important considerations is the nomination of the personal representative (also known as an “executor”) of the estate and the successor trustee of the trust.  These persons (or entities) have specific grants of authority, as well duties and responsibilities, bestowed upon them by Florida law, and it is essential in the planning process that the right persons (or entities) are selected for these roles and that they are prescribed the requisite powers to carry out these duties and responsibilities.

For those persons who have children, Florida law allows parents to designate health care surrogates and preneed guardians for minor children in the event that the parent or parents die, are incapacitated, or are otherwise unable or unavailable to serve in these roles.

Planning for Incapacity

Perhaps the most overlooked aspect of estate planning is planning for one’s own incapacity.  At some level, this is difficult to explain, because planning for one’s incapacity affects that person directly during their life, rather than at death.  Planning for incapacity is typically divided between two polestars that are mutually inclusive of one another: (1) the management of the property of the incapacited person and (2) the medical directives of the incapacitated person. 

In creating a revocable living trust, consideration must not only be given to the disposition of the assets of the trust upon death, but also to the management of the trust assets in the event the settlor (the person who creates the trust) becomes incapacitated.  These trusts should generally be created to provide financial support for the incapacited person, to ensure that assets are distributed for medical care, maintenance, and support for both the incapacitated person and the incapacitated person’s family.  Durable powers of attorney allow for the appointment of an attorney-in-fact to engage in various property transactions on behalf of the principal (the person who creates the durable power of attorney instrument).  A durable power of attorney is effective during the subsequent incapacity of the principal and allows for the attorney-in-fact to pay bills and engage in other property transactions during such incapacity.

Medical advanced directive serve two primary functions: (1) they provide specific directives to medical personnel regarding the wishes of the incapacitated person and (2) they nominate persons to make medical decisions and to carry out the specified directives.  A Designation of Health Care Surrogate is an advanced directive that allows a client to designate the person that the client entrusts to make medical decisions on his or her behalf in the event he or she is unable to do so.  A Living Will is an advanced directive that specifies the manner in which the maker of the instrument will be cared for at the end of his or her life.  A Designation of Preneed Guardian allows a client to designate the person who will serve as the client’s guardian(s) if a court determines that a guardianship is necessary after finding that the client lacks capacity.

Tax Planning

While primary importance is placed on the manner in which a client intends to dispose of his or her assets, both during life and at death, the “trick” is enabling the client to do this is the most tax-effective manner.  Moreover, it is essential to educate the client so that he or she understands the tax consequences of various dispositive schemes that may be under consideration in order to promote informed and autonomous decision-making.  Depending on the circumstances of the client, tax considerations may include federal and state income tax, inheritance tax, gift tax, estate tax, and generation-skipping tax.

Asset Protection

The formation of trusts, the manner in which assets are managed within the confines of the trusts, the titling of assets, and type of assets possessed by the client are important considerations in advising clients regarding the exposure that the client or the client’s intended beneficiary’s may have regarding creditors.  In formulating an estate plan, it is important to understand the client’s level of concern with creditors, both of the client and of those persons who may be the recipients of the client’s property.  In this context, asset protection planning may include the creation and funding of trusts with certain built-in creditor protections, as well as advice concerning the purchase, sale, exchange, or retitling of various assets.