Living Trust / Revocable Trust

October 29, 2007

Successor Trustee: Duties and Responsibilities

You have just been asked to be a successor trustee for a Florida Living Trust. What will your trustee duties and responsibilities be? Do you want to accept? Are their downsides? I ran across an interesting article and have applied some of it to Florida law. This note will help you to understand what some of the common issues are and will help you to discuss your options with a Florida Estate Planning Lawyer. Remember that all Florida trusts are different, and that many of your duties, responsibilities may not be contained in the document. Therefore your document will need to be analyzed with the New Florida Trust code.

First Lets discuss some of the background information that will be necessary to understand your duties and responsibilities.

A Trust is a legal entity. When assets are contributed to the trust, the trust separates the legal ownership (possession) from the beneficial ownership (the principal and income). Often trusts look very much like wills because they include instructions for whom your your assets will benefit after our death. Some trusts are created during the life of the person who creates them ( the settlor or grantor) and some are created after their death (testamentary).

Florida Living Trusts work by separating the equitable ownership (the trustee)from the beneficial ownership (the beneficiary).

Who are the people involved in a Trust? The grantor (also called settlor, trustor, creator or trustmaker) is the person whose trust it is. Married couples who set up one trust together are co-grantors of their trust. Only the grantor(s) can make changes to his or her trust.

The trustee manages the assets that are in the trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference.

A successor trustee is named to step in and manage the trust when the trustee is no longer able to continue (usually due to incapacity or death). Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee (bank or trust company) is named. Sometimes it is a combination of the two.

The beneficiaries are the persons or organizations who will receive the trust assets after the grantor dies.
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October 26, 2007

How to change a WIll

by David M. Goldman

Clients often bring in Florida Will to amend which have been marked up several times. Usually, once there are so many changes that they cannot tell what the last change is, the decide to redraft or amend their will.

With a Florida Will, or a will drafted in another state, a Florida Resident cannot simply cross off part of a page or change the language on their own. The result will be that the court will look to see if they can determine what the original language was, and enforce it.

The reason for this is all Florida Wills, Florida Revocable Trusts, and Codiles (an amendment to a will) must comply with the Florida statute of wills. This requires that two people who witness each other and the person who is creating the will all witness each other signing the document.

October 22, 2007

Florida Statute of Wills: Wills, Revocable Trusts, Codicils

by David M. Goldman

When making a Florida Will, Florida Revocable Trust, or Codicil to a Florida Will there are several technicalities that must be complied with for the documents to be valid.

1) Who can make a Florida Will, Florida Revocable Trust, or Codicil to a Florida Will:

The answer to this can be found in section 732.501, Florida Statutes, where it states: Any person who is of sound mind and who is either 18 or more years of age or an emancipated minor may make a will.

October 18, 2007

Durable Power Of Attorney, Living Will, Trusts: & Co-Agents

by David M. Goldman

Often Estate Planning clients struggle with their spouse or self over who to pick as an agent to represent them in a Florida Durable Powers of Attorney ( Financial decisions), Florida Living will & Designation of Health Care Surrogate ( Health care decisions) and Revocable Trusts (Financial Management).

Initially clients might thing of using a Co-Agent. This can cause many problems and unforeseen circumstances and must be done with the correct expectations and knowledge of the potential problems. Michael Keenan has an article discussing several of these issues, titled Be Careful With Co-Agents. In summary, before choosing co-agents you should consider whether they get along well with each other, and what to do if they do not in the future.

In addition, what if one lives far away or moves after the documents are created. Some hospitals or financial institutions may require that both act together unless each co-agent has “several powers” or “joint and several powers” This can be difficult and impracticable. You put your financial and health interest at risk due to delay in execution of the documents.

October 15, 2007

Updating Addresses in Estate Planning Documents

by David M. Goldman

As an Estate Planning Lawyer in Jacksonville Florida, I am often asked about issues dealing with addresses in Florida Wills, Florida Trusts, Florida Living Wills, Florida Durable Powers of Attorney, and other documents.

Generally the address and phone number in these documents is to help locate or contract the person. In some cases they can be used to help distinguish one John Doe from the next. The Connecticut Estate Planning Blog had an example of when it might be important to update the address, but as the site states, this would only happen on a law school exam.

The only possible reason why such a move would prompt a legitimate will amendment is if the move created an identification problem. For instance, in the above example, suppose the client disinherited his other brother, also named Billy Bob (I don’t think I’ve ever seen two brothers with the same name), out of his will, but then that brother moves to Glastonbury after the other Billy Bob moved from Glastonbury to Wethersfield. Now the will seems to identify someone who the client didn’t intend to include as a beneficiary of his will.

October 11, 2007

Florida’s New Trust Code and Some Mandatory Provisions Relating to Administration That Can Effect Existing Trusts

by David M. Goldman

As a Jacksonville Living Trust Lawyer, I have noticed many changes that effect the administration of Trusts, even those which were already in existence when on July 1, 2007 when the Florida’s New Trust Code became effective. If you are an estate planning attorney in another state and have clients who have trusts in Florida, it is most likely that their trusts must be managed differently than their trust document would imply.

1) A trustee has a duty to act in good faith in the interest of the beneficiaries and in accordance with the terms of the trust, imposed in part by sections 736.0801 and 736.0802.

2) There is a new 6 month statute of limitation sunder section 736.1008 with regard to any item set forth in a trust disclosure statement which contains a limitation notice containing the six-month period of time under 736.0604 within which to contest the validity of the terms of the trust.

October 7, 2007

Anatomy of a Florida Estate Plan

by David M. Goldman

As a Jacksonville Estate Planning Lawyer, one of the most common things I do is determine what is necessary for a clients Florida Estate Plan. Greg Herman-Giddens of the North Carolin Estate Planning Blog has an Article called the Anatomy of an Estate Plan where he discusses and defines the Basic Documents in an Estate Plan:

Will

Durable power of Attorney

Health Care Power of Attorney Living Will

October 4, 2007

Do I really need a Florida Living Trust?

by David M. Goldman

As aFlorida Estate Planning Lawyersand a Jacksonville Estate Planning Lawyer I often receive questions about Florida Living Trusts. These usually come after clients attend seminars given by Estate Planning Organizations. Often they are not law firms, but some are.

Although there are benefits to Florida Living Trusts, sometimes they are not necessary. I often get questions from clients who have less than 100,000 in assets who have been told that a Florida Revocable Trust or Florida Living Trust is the answer to their Florida Estate Planning needs.

To answer the question, “Is a Florida Living Trust right for me?” a Florida Estate Planning Lawyer needs to look at the clients individual financial circumstances. I have found that many times, simple payable on death designations will accomplish the same results as a Revocable Trust.

October 2, 2007

Powers of Attorney for College Students

by David M. Goldman

As a Jacksonville Estate Planning Attorney, I wanted to share with you and your family an important planning idea on he use of Powers of Attorney and Health Care Surrogate forms for college students and adult family members that are under 30 years of age. These documents are recommended because of the higher standards of patient privacy that hospitals and physicians are now being held to under the Health Insurance Portability and Accountability Act (“HIPAA”). Because of this, medical providers, family doctors, and health care centers are often unable to provide medical information to anyone without the authority of the patient.

Section 1177 of HIPAA imposes strict penalties on anyone who violates the law by providing a patient’s individually identifiable health information to another person, even a parent or spouse. Specifically, the law states as follows:

(a) OFFENSE — A person who knowingly and in violation of this part–

(1) uses or causes to be used a unique health identifier;
(2) obtains individually identifiable health information relating to an individual; or (3) discloses individually identifiable health information t another person, shall be punished as provided in subsection (b)

(b) PENALTIES. — A person described in subsection (a) shall–

(1) be fined not more than $50,000, imprisoned not more than 1 year, or both;
(2) if the offense is committed under false pretenses, be fined not more than $100,000, imprisoned not more than 5 years, or both; and (3) if the offense is committed with the intent to sell, transfer, or use individually identifiable health information for commercial advantage, personal gain, or malicious harm, be fined not more than $250,000, imprisoned not more than 10 years, or both.

According to Section 1171, “individually identifiable health information” means any information, including demographic information collected from an individual that:

(A) is created or received by a health care provider, health plan, employer, or health care clearinghouse; and (B) relates to the past, present, or future physical or mental health or condition of an individual, the provision of health care to an individual, or the past, present, or future payment for the provisions of health care to an individual; and

(i) identifies the individual; or (ii) with respect to which there is a reasonable basis to believe that the information can be used to identify the individual.

Because of the harsh penalties, many health care providers may be unwilling to disclose a patient’s information to anyone else, even that patient’s spouse or parents. Once a child turns 18, the natural parents no longer have authority over their child’s financial or medical decisions. In fact, when distressed parents and family members of some of the students at Virginia Tech tried to discover information about their children, medical providers were unable to release information without the proper release form. Thus, I am preparing Durable Powers of Attorney and Designations of Health Care Surrogate for many clients who have children who are 18 or older. Typically, we designate the parents as their Attorneys-in-fact and Surrogates to make financial decisions and health care decisions should they not be able to do so themselves. In addition, I ask their children whether they want to execute Living Wills. Each of our clients typically executes these documents for themselves, but in the past, many have not executed them for their adult children.
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September 29, 2007

Florida Trust Advantages for Descendants

by David M. Goldman

Florida Estate Planning Lawyers often tell clients of the many advantages of a Florida trusts. When a client leaves property to heirs in a trust instead of outright, they can control how the property is used. The control can violate public policy or law, but often good estate planning can control the property without risk of having the control stricken. Some of the major advantages are:

1. That a trust can provide a mechanism for better management and investment than the individuals may be capable of on their own.

2. That a trust can prevents the beneficiary(s) from using all of the proceeds quickly, or wasting it on unnecessary items.

3. Than a trust can protect the assets from the claims of creditors.