Reviewing Your Documents

Important Questions to Consider in Reviewing Your Documents

As Estate Planners and Probate Attorneys, we see a lot of what goes wrong, instead of what goes right. Over time, we have developed a sense for what is truly important. Much of what is set forth here only becomes important when it is too late to change it.

Let’s say you have been motivated to have a plan put in place, and documents drafted:

Do you know where the originals are? In Florida, if the originals can’t be found, there may be a presumption that they were destroyed by you with the intention to revoke them.

Will other people know how to find them when the time comes? We recommend that a letter of instructions be provided to your family or trusted advisors. You may not want your family members to know what the provisions of your documents are, but they should at least know where they are, and who has possession of them.

If they are in a safe deposit box, how will they be accessed in the event of your passing? Florida law restricts access to safe deposit boxes after one or both of the owners have passed away.

Here are some other things to think about:

Who is the Personal Representative (Executor) under your Will? Whether it is your spouse (or someone else), who is the successor in the event of simultaneous death, or if they have predeceased you?
Who are the Trustees and Successor Trustees under your Estate Planning documents?
If you have minor children, do you have a current Will that names Guardians?
Have you purchased a home since your documents were prepared? Did you consider the impact on your Estate Plan of the manner in which you took title?
Are your documents set up to avoid the delay, time, cost and publicity of probate?
Do any of your children or grandchildren have undisciplined spending habits?
Do you need to protect a child or grandchild from the claims of a spouse or creditors?
Have you named an institution as Trustee in your documents? Are the people with whom you had developed a relationship still employed by that institution, or has the institution itself been sold, taken over by out-of-state interests without a strong local presence, merged or failed?
Did you fully understand your documents when you signed them? Are you still clear on their provisions?
Are the individuals named as personal representative (executor), trustee, health care surrogate or to whom you gave a power of attorney still suitable, available or willing to undertake these responsibilities?
Have you considered opportunities that have arisen as a result of changes in the law, for example, the Legacy Trust? Florida law now permits a properly drafted trust to run for three hundred and sixty years, allowing you to create a trust that benefits generations to come without incurring federal transfer taxes.
Have you considered strategies to “freeze” your estate, such as GRATs or IDGTs?
Were your documents executed when you were a resident of another state that has become aggressive in attempting to tax the estates and trusts of its one-time residents. Clearly, tax revenues are down and all states are looking for sources of revenue. New York State is known for being particularly aggressive.
Have you created a life insurance trust intended to keep the proceeds of the policy out of your estate and provide liquidity for your family? Are you keeping up with the formalities by sending the required notices to beneficiaries (“Crummey Letters”) prior to premiums being due?
Are you certain of the beneficiary designations on your IRA’s, 401(k) plans, life insurance policies, and the titling of bank accounts and brokerage accounts?
Have you forfeited distribution options by naming your revocable trust as beneficary of your 401(k)?
Is real estate in another state still titled in your name or your spouse’s name, requiring that an additional probate will need to be opened?
Are you going to incur unnecessary probate costs and fees because you did not create a revocable trust?
If you have established either a revocable trust or provided for testamentary trusts, did you provide for oversight and a way to remove them?
Is your spouse a United States Citizen? If not, have your documents been drafted so as to provide that you can still get the 100% marital deduction so the spouse’s source of support is not diminished by estate taxes?
Has your estate diminished to where your current planning is obsolete and does not adequately provide for your highest priorities?
Has your estate increased to where it is time to begin a long-term program of Estate Planning so that your assets benefit your family and not the government?
Would you like to undertake strategies that transfer future appreciation in assets to your family, without a transfer tax on that appreciation?
Do you have a child or grandchild has special needs?
Should you establish College Tuition Plans (Section 529 Plans) for your grandchildren? Five years of gifting (times two for husband and wife) can be accomplished in one transaction, allowed to grow tax-free and effectively removes these monies from exposure to estate taxes in your estate.
Should you create trusts for minors for your children or grandchildren.
Have you put bank accounts, real estate or other assets in joint names with your children, without realizing that claims of the children’s creditors or spouses can claim or reach those assets, that a gift tax may have been payable or that you may be disqualified from receiving certain kinds of public assistance?
If you transferred your home to a revocable trust, did you realize that you and your spouse may have had greater protection against claims of creditors when the property was titled in their names together as a “tenancy by the entirety”, instead of titled in your revocable/living trusts?
Have you organized your important papers or left a letter of instructions for your family to assist in sorting out their financial affairs in the event of death or incapacity. Safe combinations, locations of safe deposit boxes and keys, passwords and information for on-line accounts, all are lost, and the family may never even know of their existence.
Does your spouse’s Will or Trust establish a Credit Shelter Trust? If so, will funding it leave you broke?
Are the monies you want to leave your children protected from claims of creditors and divorcing spouses?
If you have a Revocable Trust, have you transferred your assets to it or did you leave the lawyer’s office confused about what to do next?
In case you become disabled, have you nominated someone to handle your financial affairs?
Do you have a current Health Care Power of Attorney that provides the names, addresses and telephone numbers of your designated agents to handle your medical care if you’re disabled?
Do you have provisions in your Trust or Will that address the issue of apportionment of death taxes?
If you want to make gifts to charities at your death, are they clearly set forth in your planning documents?
Do your planning documents clearly set forth how your personal property will be distributed at your death, including the care of any surviving pets?
Since you signed your planning documents, have you changed your mind about any aspect of the plan?
Have you substantially changed the kind of assets you own since your planning documents were signed?
Have you been married, divorced or widowed since your estate planning documents were signed?
Have you had children since your estate planning documents were signed?
Have your children had children?
Have any of your children been married, divorced or passed away since your planning documents were signed?
Have you, your spouse or child become physically or mentally incapacitated since your planning documents were signed?
Have you bought or sold a house or other piece of property since your planning documents were signed?
Are you contemplating selling stock or other valuable assets with a low cost basis?
Have you moved between states since your planning documents were signed?

These are just a few questions to consider. Estate planning issues are complex and it is always important to consult an experienced estate planning lawyer. Call us today.