Living trusts: Best to transfer assets soon?

A durable power of attorney is to provide a mechanism for reducing a person’s estate by making gifts of his or her assets. A similar objective in a smaller, nontaxable estate may be to make the principal eligible for Medicaid planning or assistance. In either case, it is prudent, and good practice demands, that the attorney at law who drafts the power of attorney includes the power to make gifts.

If the gift-making power is not included, the validity of the gift may be challenged. The IRS has successfully challenged gifts that were made when there was no specific authority in the document.

A power of attorney is not the same as a trust, a will or a living will. But it is a separate legal document that is an important part of a Florida estate plan.

Please make sure when creating Powers of Attorney, trusts, or wills they are setup correctly. Often fill in the blank forms can provide a framework, but they are not able to take into condideration the particulars need of individuals. Its best to have an attorney prepare these documents and have them reviewed yearly by your Florida Estate Planning Attorney for changes in your status, and the law.