Estate Planning and Trusts Blog

Not Your Grandfather’s Senior Community

Active senior community
Seniors are seeking more active retirement communities.

One 78-year-old woman wanted to compete in a triathlon, so she headed over to the pool at her retirement community and joined a training team. Another 86-year-old woman logs 10 miles twice a week on one of the same retirement community’s spin bikes. That’s what a senior living community that also offers assisted living and skilled nursing care looks like today, reports considerable.com in the article “The rise of ‘cool’ senior living communities.”

Other communities have been created on or near college campuses, where residents can take classes, attend school concerts or sports games, hang out with students and get care if and when they need it. There are also the upscale high-rises that feel more like resorts or healthcare spas.

Active adult communities for those 55+ are transforming themselves into cool, desirable places to live a busy lifestyle. There are now two of Jimmy Buffett’s “Latitude Margaritaville” communities in Florida and another in South Carolina.

Today’s seniors don’t want a bland community, and their children don’t want to see their parents in one. Senior providers know that if they want to succeed, they must stand out from the competition. They’ve got their eye on the 76 million baby boomers who are prospective residents. They know that these prospects are radically redefining aging, just as they have every other stage of life.

An even bigger challenge — most people want to age in their own homes and not move at all.

More senior living communities are also offering opportunities for residents to interact with people of all ages. One community has programs for all ages, a Saturday pop-up café, and more than 40 organizations meet at the center regularly. The community has positioned itself as a gathering place for all members, young and old, to combat isolation and bring people together.

Some retirement communities are built on properties that are mixed-use with the same purpose of not isolating seniors. One community in Alabama will have a center for well-being, open to residents and the public, with physicians, nutritionists, wellness coaches, chiropractors and alternative therapies from salt rooms to infrared saunas. A co-working area and research space for partnerships between healthcare providers, local medical schools and universities and biotech companies will be offered.

For those with seawater in their veins, there is a cruise ship that has been retrofitted with more than 600 condo living units. For wine enthusiasts, one company in California’s Sonoma wine country is partnering with a Zen center to build a facility that will offer meditation classes, workshops and retreats, as well as independent and assisted living and memory care.

No matter what your interests are, chances are there’s a new, cool retirement community with your interests and lifestyle in mind.

Reference: considerable.com (May 24, 2019)“The rise of ‘cool’ senior living communities”

Other articles you may find interesting:

Do I Need to Update My Estate Plan if I Relocate?

Naming a Child as Successor Trustee?

A Basic Form Doesn’t Work for Estate Planning

A basic form Will
A basic form Will or Trust may not protect your family or properly document your wishes.

It’s true that an effective estate plan should be simple and straightforward, if your life is simple and straightforward. However, few of us have those kinds of lives. For many families, the discovery that a Will that was created using a basic form is invalid leads to all kinds of expenses and problems, says The Daily Sentinel in an article that asks “What is wrong with using a form for my will or trust?”

If the cost of an estate plan is measured only by the cost of a document, a basic form will, of course, be the least expensive option — on the front end. On the surface, it seems simple enough. What would be wrong with using a form?

Actually, a lot is wrong. The same things that make a do-it-yourself, basic form seem attractive are also the things that can make it very dangerous for your family. A form does not take into account the special circumstances of your life. If your estate is worth several hundreds of thousands of dollars, that form could end up putting your estate in the wrong hands. That’s not what you had intended.

Another issue: any form that is valid in all 50 states is probably not going to serve your purposes. If it works in all 50 states (and that’s highly unlikely), then it is extremely general – so much so that it won’t reflect your personal situation. It’s a great sales strategy, but it’s not good for an estate plan.

If you take into consideration the amount of money to be spent on the back end after you’ve passed, that $100 basic form Will becomes a lot more expensive than what you would have invested in having a proper estate plan created by an estate planning attorney.

What you can’t put into dollars and cents is the peace of mind that comes with knowing that your estate plan – including a Will or Trust, power of attorney, and health care power of attorney – has been properly prepared.  As such, your assets will go to the individuals or charities that you want them to go to, and your family will be protected from the stress, cost, and litigation that can result when Wills or Trusts are deemed invalid.

Here’s one of many examples of how a basic, inexpensive form created chaos for one family. The father had decided to forego seeing an attorney and executed a do-it-yourself Will. After he died, chaos ensued because his intentions weren’t clear. The father had properly filled in the blanks but used language that one of his sons felt left him the right to significant assets. The family became embroiled in expensive litigation, and became divided. The litigation has ended, but the family is still fractured. This was not what their father had intended.

Other issues that may not be properly addressed when basic forms are used: naming the proper executor, guardians and conservators, caring for companion animals, dealing with blended families, addressing Payable-on-Death (POD) accounts and end-of-life instructions, to name just a few.

Avoid the “repair” costs and meet with an experienced estate planning attorney in your state to create an estate plan that will suit your needs.

Reference: The Daily Sentinel (May 25, 2019) “What is wrong with using a form for my will or trust?”

Are No-Contest Clauses Valid In Florida?

No-contest clause in a will.
No-contest clauses threaten troublemaking heirs with disinheritance.

A Brief History of No-Contest Clauses

No-contest, or in terrorem, clauses have been used in Wills for centuries. These clauses usually state that if a beneficiary under the document contests the validity of the document and loses, that beneficiary receives nothing. Of course, if the beneficiary wins, the document is invalid and so is the clause. These clauses were almost always upheld because, under the common law (non-statutory law created by custom and courts), there was no legal right to inherit anything. A bequest was a gift made by the deceased person, who had complete discretion as to how and when to leave that gift. So any action taken by a beneficiary that was detrimental to the probate of a Will violated the no-contest clause and the beneficiary’s bequest was forfeited.

But things changed over time and U.S. courts, including those in Florida, began to construe those clauses very strictly. For example, in 1959 in Kolb v. Levy, a Florida appeals court ruled that a contractual claim filed by one beneficiary against her mother’s estate – a claim so large that if she succeeded in a lawsuit it would have consumed most of her mother’s estate – did not violate the non-contest clause because it didn’t directly challenge the validity of the Will.

That’s where Florida law stood until the 1990s, as ideas about an individual’s right to have access to the courts to redress grievances changed. The Florida state legislature declared that no-contest clauses violated such public policies and passed two statutes prohibiting the enforcement of no-contest clauses in Will and Trusts.

Florida’s No-Contest Statutes

Florida Statute §732.517 states that a “provision in a will purporting to penalize any interested person for contesting the will or instituting other proceedings relating to the estate is unenforceable.” Its sister statute, Florida Statute §736.1108, applies to Trusts created on or after October 1, 1993, and states that a “provision in a trust instrument purporting to penalize any interested person for contesting the trust instrument or instituting other proceedings relating to a trust estate or trust assets is unenforceable.”

Currently, Florida is the only state that absolutely prohibit the enforcement of no-contest clauses in Wills and Trusts. A couple of states still enforce them most of the time, but the majority of states consider them on a case-by-case basis. If your Will or Trust was drafted in another state and includes a no-contest clause, it won’t be enforced in a Florida probate court.

Why Are No-Contest Clauses Sometimes Still Used in Florida?

So why do some Florida attorneys still put no-contest clauses in Wills and Trusts if they know they’re not enforceable? Mainly to try to prevent frivolous litigation. Many clients want these clauses in their documents – even though they understand that a Florida court won’t enforce them – because they hope that it shows their beneficiaries, and potentially a judge, their intent as to how they wanted their assets distributed. Does it work? I don’t know. Maybe it does sometimes, but a truly litigious person certainly won’t be stopped by it.

Many Floridians now use a Trust as their primary estate-planning tool. With a Trust-based estate plan, there’s virtually no risk of a Will contest since a Pour-Over Will essentially says nothing. But Trust litigation is always a possibility. Occasionally, the contest relates to the validity of the trust, but, more often, trust litigation involves disputes between a beneficiary and the trustee regarding trust interpretation and asset distributions.

Alternatives to No-Contest Clauses

Depending on the client’s specific situation, there may be other ways – other than using unenforceable no-contest clauses – to prevent or minimize potential litigation risks when a Trust is involved. Creating and funding separate Trusts for problem beneficiaries, adding Trust Protector provisions, or adding a mediation clause may help keep a disgruntled beneficiary from depleting trust assets in a drawn-out court battle.

So, while Florida courts won’t enforce a no-contest clause in a Will or trust, there may be other ways to minimize – although not completely eliminate – the possibility of litigation. Greed, jealously, family dynamics, and money problems are great motivators for litigation, and a few words on a piece of paper are unlikely to stop all.

If you’re worried about preventing potential litigation, or if you think you may have a legitimate reason to contest a Will or Trust, contact an attorney for guidance.

Yes, You Should Have a Will

Death comes whether you have a Will or not.
Don’t lie to yourself. Death comes for all of us, whether we have a Will or not. Make it easier for the ones you leave behind.

To avoid estate planning, people tell themselves all kinds of lies.

Forbes’s recent article, “3 Lies People Tell Themselves About Estate Planning,” discusses three lies people tell themselves to delay or avoid estate planning.

1. There’s No Need for a Will Because I Don’t Have Much Money.

This isn’t true. A typical Will covers more than just finances. Your Will can be used to protect your family by naming who should become the guardian for your minor children if you pass away. Your Will can also be used to state the way in which you’d like your body to be handled after your death. A Will provides details so your final wishes are carried out. Your family won’t be left guessing what you wanted.

2. There’s No Need to Update My Estate Plan Because Nothing’s Changed.

People say this all the time, but the law may have changed without your knowledge, necessitating modifications to your estate plan. For instance, many of the estate plans that were created years ago with the objective of minimizing federal estate tax are now out of date. You should also consider updating your estate plan to name younger adults to serve in critical fiduciary roles, because your original choices may no longer be able to serve.

3. There’s No Need to Update My Beneficiary Forms Because I Have a Will.

A Will doesn’t control the disposition of all of your assets; it only controls assets that pass through the probate estate. For example, married couples typically own their homes in joint tenancy, so the home automatically passes to the surviving spouse, no matter what the first-to-die spouse’s Will says. In addition, retirement accounts don’t pass via a Will. These accounts, such as IRAs, Roth IRAs, 401(k)s, 403(b)s and similar accounts, pass by beneficiary designations. It’s important to understand that your beneficiary forms generally supersede your Will.

Talk to an experienced estate planning attorney today.

Reference: Forbes (May 9, 2019) “3 Lies People Tell Themselves About Estate Planning”

Do I Need to Update My Estate Plan if I Relocate?

Relocate to Florida
Be sure to review your estate plan after you relocate to Florida.

Anyone who relocates to another state – for retirement, a new job or to be closer to family – needs to have a look at their estate plan to make sure it’s valid in their new state, advises the Boca Newspaper in the recent article “I’ve Relocated To Florida…Should I Update My Estate Plan?”

If an estate plan hasn’t been created, a relocation is the perfect opportunity to get this important task done. Think of it as preparation for your new life in your new home.

Because so many retirees do relocate to Florida, there are some general rules that make this easier. For one thing, most Wills that are valid in another state are recognized in Florida. There’s a specific law in the Florida statutes that confirms that a Will “other than a holographic or nuncupative will, executed by a nonresident of Florida… is valid as a will in this state if valid under the laws of the state or country where the will was executed.”

In other words, if the estate plan was prepared by an estate planning attorney and is legally valid in the prior state, it’ll be valid in Florida. Exceptions are a holographic Will, which is a handwritten Will that is signed by the person with no witnesses, or a nuncupative Will, which is a verbal statement made in front of witnesses.

However, just because your Will is recognized in Florida doesn’t mean it doesn’t need a review after you relocate.

There are distinctions in Florida law that may make certain provisions invalid or change their meaning. In one well-known case, a do-it-yourself Will was missing one sentence—known as a “residual clause,” a catch-all provision that distributes assets that are otherwise not specified. The maker of the Will wanted everything to go to her brother. However, without that one clause, property acquired after the Will was created was not included. The court determined that the property that was acquired after the Will was created would go to other relatives – despite the wishes of the decedent.

Little details mean a lot when it comes to estate plans. Just because an estate planning document is legally valid doesn’t mean it’ll be effective in carrying out your wishes.

It’s important to ensure that your Last Will and Testament properly expresses intentions under the laws of your new home state. After you relocate, it might be the time to speak with your estate planning attorney about whether any trusts are applicable to your estate. A revocable living trust, for example, would prevent the assets placed in the trust from having to go through probate.

It’s also a great time to review your Durable Power of Attorney, Designation of Health Care Surrogate, Living Will, and nomination of a Pre-need Guardian.

Estate planning gives you peace of mind, knowing that the legal side of your life is all taken care of. It also avoids stress and unnecessary costs and delays to your family. To keep it current, it should be reviewed – and updated, if needed – at big events in your life, including when you relocate, when you sell or buy a home, or when you retire.

Reference: Boca Newspaper (May 1, 2019) “I’ve Relocated To Florida…Should I Update My Estate Plan?”

Other articles you may find interesting:

Your Executor Doesn’t Want to Serve?

Is Your Beneficiary Ready to Handle an Inheritance?

A Solo 401(k) Works for Self-Employed

A Solo 401(k) benefits small business owners
A Solo 401(k) benefits small business owners.

Have you heard about the Solo 401(k)?

Freelancers, gig-workers or solo entrepreneurs have always had a hard time saving for retirement. It takes a tremendous amount of self-discipline to take money that would otherwise go to run a household or pay quarterly taxes and set it aside in a retirement account. Without an automatic withdrawal from a regular pay check, it’s tough. However, there is an option, says Next Avenue in the article “A Retirement Plan for the Self-Employed: The Single 401(k).”

Known as the Solo 401(k), the Self-Employed 401(k), Individual 401(k), or the Single 401(k), this is a retirement plan designed for self-employed people or sole proprietors, and if applicable, also for their spouses. With a Solo 401(k), 100% employee salary deferral of up to $19,000 is permitted in 2019, if you are under 50. If you’re over 50, that number can go up to $25,000. It also allows an employer profit-sharing contribution of up to $56,000 per year, which lets you save even more by being both the employer and an employee of your business.

Using the Solo 401(k) can save you more than $14,000 in taxes per year (that is, assuming a $56,000 contribution and a 25.7% corporate tax rate), while simultaneously offering a loan provision, just in case you need to tap your savings.

Who qualifies for a Solo 401(k)? You have to be truly self-employed, either in your own full-time small business or a part time gig. Your business can be a sole proprietorship, partnership, or corporation, but it can only have no other employees or employees who aren’t eligible to participate in a traditional 401(k). Examples of people who aren’t eligible would be people who are under age 21 or who work fewer than 1,000 hours per year.

The Solo 401(k) works well for a husband/wife partnership or a small business with only part-time employees.

It provides flexibility so that when times are good, you can put away a lot. When times are lean, you can save less. Additional benefits:

  • Reduced taxable income for pre-salary contributions.
  • Built-in profit sharing for maximum savings deductible against business income.
  • The cost of the plan is a deductible expense.
  • Investments grow tax deferred.
  • Higher contribution limits than SEPs and SIMPLE IRAs.

Small business owners don’t have an HR department to rely on, so it’s a good idea to talk with your financial advisor or estate planning attorney about how a Solo 401(k) may work for your long-term retirement and estate plan.

Reference: Next Avenue (May 3, 2019) “A Retirement Plan for the Self-Employed: The Single 401(k).”

Your Executor Doesn’t Want to Serve?

Your Executor may decline to serve.
Your Executor (Personal Representative) may decline to serve if you don’t prepare ahead.

When you’ve finally decided who you trust enough to serve as your Executor (called a Personal Representative in Florida), you’ll need to take the next step. It involves having a conversation with the person about what you’re asking her to do. You’ll need to ask if she is willing, says the Pocono Record in the article “Don’t assume person is willing to be your executor.” People are often flattered at first when they are asked about this role, but if they don’t fully understand the responsibilities they may decide not to serve just when you need them the most.

Once your Executor has agreed to act on your behalf and you have a Last Will and Testament prepared by an estate planning attorney, tell your Executor where your original Will is located. Remember that in addition to knowing where the document is, she’ll also need to have access. If the original Will is kept at home in a fire-proof box or a locked document box, be sure to tell her where the key is located.

If you feel that the Will would be safer in a bank’s safe deposit vault, make sure that your Executor will be able to access the safe deposit box. That may mean adding her to the list of people who have access. After your death, she may be permitted to enter the box with a bank representative solely for the purpose of obtaining the Last Will and Testament – nothing else.  However, you should check with your branch first.

After you die, your Executor (Personal Representative) and your estate’s attorney will file your original Last Will and Testament with the probate court. The judge then issues Letters of Administration (called Letters Testamentary in other states), which says that your Executor has the authority to open the safe deposit box to inventory its contents. The Executor must complete an inventory form and have any personal property found in the safe deposit box appraised at its fair market value as of the date of your death.

To make your Executor’s job easier, create a list of your assets and debts and include information she’ll need to complete her task, such as account numbers, titling, etc. She’ll also need contact information and account numbers for insurance policies (homeowners, car, Medicare supplements, life), veterans’ benefits, pensions, retirement accounts and any other assets.

Some people store their information on their computer. But if your Executor can’t access your computer due to distance, or can’t get into your computer because she doesn’t have your password, you may want to create a hard copy document in addition to keeping the information on your computer.

Taking on the role of an Executor (Personal Representative) is a big job. You can show your appreciation, even after you are gone, by making it easy for your Executor to find all the information she’ll need.

Reference: Pocono Record (May 1, 2019) “Don’t assume person is willing to be your executor”

NFA Firearm Trust FAQs

NFA firearm trust FAQs
Do you have questions about NFA firearm trusts?

Here are a few of the most common questions I receive about NFA (National Firearms Act of 1934) firearms and NFA gun trusts:

If I’m carrying an NFA firearm in Florida, and am stopped by a LEO (law enforcement officer), what do I need to produce to prove that I legally possess that item?

Technically, you have no obligation to prove ownership to a police officer, sheriff, deputy, or FWC officer. Only the ATF and perhaps the IRS have the legal authority to demand to see your tax stamp. But, unless you potentially want to spend a night in jail, common sense dictates that you produce a copy of your tax stamp. That’s all that’s required. You don’t have to carry around a copy of your trust. (Although, I do have several clients who store a copy of their trust and their tax stamps in the cloud so they can access them if absolutely necessary). Keep your original tax stamps somewhere safe, put a copy in your binder, and keep a copy with the weapon AT ALL TIMES.

I’m at a range with friends and my NFA regulated weapons are present. Can my friends legally handle and fire those items?

As long as your have your tax stamp in your possession and the weapons are within a few feet of you, you can share away. This is true whether your NFA weapons are in a trust or not. However, if none of those people are named as current trustees in your NFA firearm trust document, the law is strict – within your presence means within your presence. As long as those NFA weapons are where someone who isn’t legally authorized can touch them, you can’t leave the immediate area to go to the bathroom, buy more ammo, or grab something from your car.

I have a friend who I know is a responsible non-NFA gun owner. He’d like to use one of the NFA regulated firearms in my trust for an afternoon at the range when I cannot attend. My brother has also asked me whether he can take it on a hunting trip if I’m not with him. Can I let them borrow an NFA firearm that’s in my trust?

It depends on how your NFA firearm trust document is written. Some are written to allow the Grantor/Trustee (you) to appoint a temporary special trustee and lifetime beneficiary. This person can possess and use the trust property for a certain period of time while you’re still alive, but has no power to sell or otherwise transfer the property and has no power over the trust document. Other trusts make no provisions for a special trustee. Consult with the attorney who drafted your gun trust to see if it’s allowed and what you’d have to do to make it legal.

Of course, NFA firearms that are owned by individuals – not trusts – can never be loaned to anyone who isn’t a couple of feet away from the registered owner.

What are the legal risks to the trust and to me if there is a mishap involving a NFA weapon?

Most NFA firearm trusts are revocable living trusts, which means the trust provides absolutely no liability protection to you or anyone using any of the guns – NFA firearm or not. If you loaned the firearm to someone else, you’ll probably be sued. To protect yourself, do your due diligence and make sure the person you loan any weapon to isn’t a criminal and doesn’t have a history of carelessness, drug or alcohol abuse (remember – medical and recreational marijuana users are prohibited from possessing any guns), anger issues, domestic violence, etc).

 

Angelina Jolie Leaving Her Estate to One Child?

Angelina Jolie and Maddox
Angelina Jolie and Maddox

Angelina Jolie has allegedly made the decision to reward her son Maddox for supporting her during her divorce from Brad Pitt. Jolie wasn’t happy that only one out of her six children totally sided with her in the couple’s divorce. Others close to the Jolie/Pitt family say that Brad is upset with Jolie for leaving the other children out and treating Maddox as her “Golden Child.”

Hollywood News Daily reports in its article, “Angelina Jolie Plans To Leave Son Maddox Millions Ignoring Other 5 Children Per ‘Radar’” explains that the final estate planning decision to will Maddox her empire was made by Jolie because of his loyalty.

“Brad is in an absolute fury and fit to be tied over Angie’s moves!” revealed the insider. “It finally seemed like they were reaching some kind of compromise with the divorce. But he’s been blindsided by this mess over Maddox.”

In September of 2016, the story surfaced that Jolie decided to file for divorce from Pitt, after becoming increasingly worried about his parenting methods. The news reportedly followed a nasty encounter between Brad, Angie, and Maddox that put the family through one of the nastiest celebrity divorce and custody battles in recent memory.

Jolie claimed that Pitt allegedly attacked Maddox during the fight. An investigation was made by the Los Angeles County Department of Children and Family Services, but no charges were filed. However, according to a family friend Brad remains very upset by the entire situation and especially angry with Angelina for not setting the record straight.

Brad feels that his other children are getting short-changed, and he won’t permit it, the friend says.

Brad Pitt is angry that Angelina Jolie would treat their children so differently, cutting out Pax, Zahara, Shiloh, and 10-year-old twins Knox and Vivienne. Leaving it all to Maddox is just wrong in Brad’s view.

“Maddox took his mother’s side in the divorce, and now she’s made him the head of her movie empire,” said the insider.

“He’s her golden boy, but Brad feels someone needs to remind her that she has five other children!”

If this rumor is true, then most likely Pitt and Jolie will continue to wage brutal battles regarding the welfare of their children for years to come.

I have no idea how old these children are, but a parent can’t completely disinherit her minor children – at least not in Florida. Maybe they can in California – it’s like another country out there. 🙂 But Angelina Jolie certainly can leave her assets to her children unequally and she can disinherit them once they’re adults.

Reference: Hollywood News Daily (April 24, 2019) “Angelina Jolie Plans To Leave Son Maddox Millions Ignoring Other 5 Children Per ‘Radar’”