- Financial Power of Attorney. A power of attorney, also known as a durable power of attorney, is the cornerstone of all estate plans. The power of attorney designates a person, known as the agent, to handle the financial and property affairs of the incapacitated person, known as the principal, in the event of the inability of the principal to act.
- Health Care Proxy. A health care proxy names a person, known and the health care proxy or the agent, to make health care decisions if one becomes incapacitated and unable to act.
Estate Planning for One’s Passing
Upon death, many estate planning clients prefer to have set out what should happens to their assets, in terms of who receives and who is in control.
- Last Will and Testament. The last will and testament is the original and most common estate planning document. It sets forth who is to receive assets upon death, and who is the personal representative of the estate (also known as the executor).
- Revocable Trust. A revocable trust is a trust that may or not be funded during life. The trust sets forth who is to receive assets upon death, and who is in charge at death (the successor trustee). Unlike a will, the trust may contain instructions for what to do with assets in the trust in the event of the incapacity of the settlor.
Advanced Estate Planning Techniques
- The creation of life insurance trusts to keep insurance proceeds out of the taxable estate and to ensure that life insurance proceeds are protected and invested for the protection of the beneficiaries.
- The use of estate tax reduction techniques and structures, such as family limited partnerships and sales to intentionally defective grantor trusts.
- The use of Dynasty Trusts, to protect assets of future generations from additional estate tax, and from creditors and spouses.
- Estate planning for second marriages, which may include handling children from earlier marriages and balancing the needs of the earlier families with the needs of the later families.
- Estate planning with special needs trusts for families with special needs children.
- Florida’s New Homestead law creates new planning challenges.
Florida residents need to be particularly aware of the Florida Homestead provisions of the Florida Constitution and certain Florida Statutes. These rules can restrict how a primary residence can be bequeathed to heirs, and they also protect homestead property from the creditors of a decedent and the beneficiaries, in some cases.