Last Will and Testaments
A last will and testament, more commonly referred to as a will, is a legal document best known for outlining how someone wants their property distributed upon their death. Wills are a critically important part of anyone’s estate plan because, without a will, a court will distribute estate assets based on the rigid Florida intestacy laws. Intestacy laws provide a framework for dividing up the assets of an estate based on which family members survived the decedent. Additionally, any assets that are not included in a person’s will are subject to the laws of intestate succession. While a will’s primary focus is on the distribution of assets, individuals can also name a guardian for any minor children in their will.
Trusts
Trusts are another integral estate planning tool that can be included in an estate plan. A trust is a legally-defined relationship between at least three parties.
- The grantor, sometimes referred to as the settlor, is the person who creates the trust;
- The trustee is the person charged with administering the trust; and
- The beneficiary is the person the trust is intended to benefit.
There are many different types of trusts, each providing its own benefits. However, in general, trusts are used to accomplish the following goals:
- Limiting the number of assets that must go through probate,
- Reducing the amount of estate tax an estate must pay,
- Reducing the grantor’s assets or income to help them more easily qualify for Medicaid,
- Protecting assets from creditors, and
- Limiting a beneficiary’s unfettered access to their entire inheritance.
The last item on this list is often used by grantors who are leaving large sums of money to young people who are inexperienced at handling finances. Often, grantors feel more comfortable allowing younger beneficiaries to grow up a bit before giving them unlimited access to their inheritance.
Types of Trusts
A trust for elderly parents can fall into one of two categories. Revocable trusts are flexible tools that allow grantors to modify the terms of the trust at any point. Revocable trusts are useful for avoiding probate; however, assets in a revocable trust remain titled to the grantor. Thus, revocable trusts do not provide asset protection, Medicaid planning, or estate tax benefits.
Irrevocable trusts, on the other hand, are inflexible in that once they are established, they cannot be modified. However, assets transferred into an irrevocable trust legally belong to the trust and are no longer considered part of an estate. Properly constructed irrevocable trusts can reduce the tax liability of an estate, exclude certain income or assets from Medicaid consideration, and protect trust assets from creditors.
Power of Attorney
A power of attorney is another common estate planning tool that allows a person to designate a trusted individual to make certain financial and medical decisions on their behalf. Again, there are many different types of powers of attorney.
Durable Power of Attorney
A durable power of attorney grants another person broad discretion to make financial and medical decisions on another’s behalf. Durable powers of attorney remain in effect if the person executing the document becomes incapacitated.
Healthcare Power of Attorney
A healthcare power of attorney—also called a medical power of attorney—gives one person the ability to make healthcare-related decisions on another’s behalf. These documents are most often used in anticipation of an elderly parent becoming unable to communicate their wishes.
Limited Power of Attorney
A limited power of attorney provides authority to make specific decisions that are outlined in the document.
Powers of attorney can become effective immediately or upon a triggering event, such as when an elderly parent is determined by doctors to lack the capacity to make their own decisions.
Advance Healthcare Directives
Advance healthcare directives allow individuals to clarify their intentions when it comes to the type of medical care they want to receive if they become unable to communicate their wishes. For example, if one of your parents has strong feelings about receiving life-sustaining medical treatment, they can include their desires in an advance healthcare directive. Parents can also name a healthcare surrogate to make decisions on their behalf. Healthcare surrogates use their knowledge of an individual, along with any guidance provided in a living will to make these decisions.
Contact a Lawyer Experienced in Estate Planning for Elderly Parents
If you or your parents have questions about elderly estate planning, reach out to Beller Law, PL.
Our South Florida estate planning lawyer has more than two decades of experience assisting adult children and their parents with creating effective estate plans. We are a full-service estate planning law firm that handles all aspects of estate planning for elderly parents.
When you enlist the help of Beller Law, PL, you can rest assured that you are in good hands. We set aside the time to answer all of your questions so you are comfortable with the process by the time you leave our office. To learn more and to schedule a consultation with our Jacksonville, FL estate planning lawyer, give us a call. You can also reach us through our online form.