Do I need to update my estate plan when I move to Florida?

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When you move to Florida from another state, there could be concerns regarding your estate plan. Laws that affect estate planning decisions vary from state to state. Your estate plan (your Last Will and Testament, Designation of Healthcare Surrogate and Power of Attorney, etc.) from another state may still be valid in Florida. However, there are differences in state laws that might cause provisions to be invalid or prevent them from achieving your desired estate planning goals. When you move to Florida, you should consider updating your documents, or at the very least having them reviewed by a local attorney in case any changes need to be made to accommodate Florida’s laws. Plus, laws may change over time. Every few years you should consider reviewing these documents to make sure you are still current and nothing has changed in your life.

Having a proper estate plan can give you peace of mind. It’s not only for your benefit, but to protect your legacy for the benefit of your loved ones.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

Updating Your Power of Attorney and Designation of Health Care Surrogate

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Whenever clients ask if they need to update their power of attorney or designation of health care surrogate papers, my first question back to them is: “When was it created?”

If they tell me it was before April 14, 2003, I would recommend they update them both.

The April 14, 2003 date relates to the required compliance date of the privacy regulations under the Health Insurance Portability and Accountability Act (HIPAA), a law which was enacted in 1996.

The HIPAA privacy rule imposed strict guidelines on the disclosure of “protected health information” without the patient’s explicit permission. While these privacy protections are a good thing, they can also become problematic if your executor, trustee or agent (under a durable power of attorney) needs to deal with your employer, insurer or medical providers such as doctors, clinics and hospitals. Due to this rule, to act on your behalf, an authorized person must have a written document executed by you, with very specific language mandated by HIPAA.

So if your power of attorney or designation of health care surrogate was executed before April 14, 2003, your executor, trustee or agent may not be able to work effectively with your medical providers and insurers. To fix this problem, Cristin Silliman, Esq. of The Legacy Law Firm, llc can help you update your documents to include the language required by HIPAA.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

The Benefits of Florida Living Trusts

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A trust is a legal arrangement whereby specified assets are managed by a trustee for designated beneficiaries on behalf of the individual, known as the grantor, who created the trust. A trust document specifies the rules for managing, distributing, and disposing of the trust assets. Living trusts are used as part of a broad financial and estate planning process to protect the privacy of the grantor’s assets, for tax benefits, and to facilitate the transfer of assets to designated beneficiaries upon the grantor’s death, or incapacity, without delay or encumbrances. When establishing a Florida living trust, you must determine whether it shall be revocable or irrevocable.

Revocable Living Trust

A revocable living trust is designed to maintain the privacy of your assets and to quickly pass the assets through to your designated beneficiaries at the time of your death, or incapacity. A Florida living trust is sometimes used in conjunction with a will. It is important to note that a Florida revocable living trust does not shield the trust’s assets from creditors. The assets in a revocable living trust may be shielded from estate tax upon the grantor’s death. A revocable living trust may be amended or revoked by the grantor at any time.

Irrevocable Living Trust

An irrevocable trust is a legal entity that typically shields the assets that are inside the trust from creditors, litigants and even the grantor’s spouse. It is important to note that the irrevocable trust becomes the legal owner of the trust’s assets and once the irrevocable trust is created, it cannot be amended or revoked. Access to the trust is typically limited to only the trustee and its beneficiaries. There are tax benefits too. Assets that are in an irrevocable trust escape the estate tax.

Cristin Silliman, Esq. of The Legacy Law Firm, LLC has extensive experience in establishing trusts for her clients. Because a Florida living trust can have significant legal and tax consequences, she can help you determine which living trust is in your best interest. Please contact her at 813-925-8083.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

Quitting Your Job to Start a Business: Are You Ready?

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Many entrepreneurs start their business venture while retaining their current job. As such, they face a formidable dilemma. The desire to focus all their time and attention on a new venture is powerful, yet it must be weighed against the associated risks — small stuff like giving up a predictable salary and benefits.

There’s no tests that can determine the right time to quit a “day” job, but here are a few questions to ask before you turn in a resignation letter.

Q: Is My New Business Poised to Thrive?

Sure, you might have plans for a successful business in mind, along with the skill required to lead it. But you have to consider whether market conditions are favorable and whether you have the resources on hand to steer the business to profitability.

Make sure you have enough money to spend on the business and pay your living expenses long enough to allow you to build the company. Don’t be stingy here: Allow enough of a cushion so that the new company doesn’t die on the vine if it takes longer to catch on than you envisioned.

Also, don’t be afraid to reach out to others for their input. Ask someone you trust, but who will be objective, to review your business plans.

“There’s a reason why entrepreneurs start businesses and why most people don’t. Entrepreneurs have different views of the world, different risk tolerances,” says Barry Levine a Los Angeles-based vice president in Northern Trust’s Financial Consulting practice. “Aspiring entrepreneurs have a greater tendency to see the glass as half full. Before launching your business, it can be very helpful to talk to someone who has expertise but not the same filters and biases.”

Q: Is Your Family Prepared?

You’re ready to live with some financial uncertainty, work the long hours required and skip vacations for a while. But are your spouse and kids?

“It is advantageous to sit down ahead of time with your spouse and envision what this will look like,” Levine says. With your spouse, be specific in terms of your day-to-day routine, your leisure time and expenditures, your cash reserve — everything that might be affected. Your entrepreneurial adventure will be better if everyone knows what to expect.

Talk through the emotional component, as well. Levine has worked with couples whose risk tolerances vary widely. It’s best to know at the onset if your spouse “is someone who is going to be absolutely terrified at the thought of not having a regular paycheck coming in,” Levine says.

Timing is everything. You may be emotionally ready to leave your job and focus on your new business. But if your spouse is nervous — or if your projections indicate you’ll have only a few months in which to turn a profit before you run out of money — you might consider a planning phase. For example, you could stay at your current job and funnel more money into savings while devoting night and weekend hours to lay the groundwork for your new venture.

Q: Is Now the Right Moment to Strike?

Once you’re confident that you have a solid business plan and there’s enough money socked away to allow you to execute your plan to perfection, it’s a matter of choosing the right moment to strike. Consider three potential indicators:

  1. The market: As you’re preparing your business plan and bolstering your savings, keep a close eye on activity in the sector you plan to enter. If you sense that competitors who have been on the sidelines are jumping into the action, it may be worth following suit even if your savings strategy is several months from completion. “So much of success is doing the right thing at the right time,” Levine says.
  2. Business maturity: If you’ve started the company as a nights-and-weekends venture while maintaining your other job, the growth of the business will tell you when it’s hungry for more attention. If you’re having trouble filling your orders, or if the only way to accept a big contract is to devote full-time energy to it, it may be time to move ahead.
  3. Your “fed-up” moment: Levine also provides leeway for the burnout victim. If you’re paralyzed by inertia and lack of motivation in your current role, it may be time to make the jump even if some of the other boxes aren’t checked.

“At some point, you have to acknowledge the emotional side as well as the financial side,” Levine says. “Sometimes, entrepreneurs just have a burning desire to call their own shots and do it their way.”

Of course, doing it your own way is a lot more fun when you succeed, which generally requires a mix of passion and preparation. When the two are aligned, you have the formula for entrepreneurial success.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

Why Families With Minor Children Need Wills and Estate Planning

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If you are a parent with minor children, this is, or should be a very important issue for you. Most parents do not like to think about what would happen to their children if they were not able to take care of them. Many think that it will never be an issue for them and that it “couldn’t happen to them”.

While it is highly unlikely that you will die while your children are minors, are you willing to take that chance with your child’s well being? Who will care for and raise your children if you and your spouse die at the same time? If you are a single parent and the sole caregiver of the child what will happen to him or her if you die? Most of these concerns can be addressed with proper estate planning. Estate planning attorneys are trained to know what questions to ask and what types of tools and techniques to discuss with their clients to help them with these dilemmas.

A common concern among parents of minor children is how to provide income for the care of their children should something happen to them. In addition to worrying about how they will provide income for the care of their children, they worry about who will manage those funds in order to make the money last until the children reach adulthood and self-sufficiency. Many parents put off the issue of discussing their estate planning with spouses because it is difficult to decide who they would want their children to live with if both parents died.

In Florida the person who cares for a minor child is called a guardian. Florida law considers parents the natural guardians. If something happens to the parents of a child there will have to be someone who can legally make decisions for that child, both financially and personally. A parent, through proper estate planning, can and should choose the person or persons who they want to take over these very important jobs.

Many times parents name one individual to care for their child and another (whether it be a family member, bank/trustee etc.) to manage their child’s money. Parents usually choose someone who they believe will raise their child with the same morals, values and beliefs as themselves. When choosing a person to manage their child’s money, they need to name an individual or entity who they believe will responsibly administer the funds in the way the parents would have. The person chosen to take care of the child’s money will be responsible for making financial distributions for child’s health, education, maintenance and support and the parents need to feel secure in the fact that the person will act responsibly with those funds.

Once you as the parents have decided who will take care of your child and your child’s money you need to sit down with those people to discuss what you are considering doing. Make sure that the people you choose for these jobs are willing and able to take on the duties. You need to name at least one person as a back-up in case your first choice is unable or unwilling to perform the duties for any reason. Make sure to review these choices on a yearly basis. If the person named has had a change in their life’s circumstances (e.g. divorce, marriage, illness, death) and could no longer raise your children or manage your child’s money, you should change your documents to name someone else.

Parents with minor children face many tough decisions when considering what would happen to those children if both parents were to die. How will I provide money for my child’s livelihood should I not be around? Who will take care of my children if I cannot? By sitting down and taking the time to discuss and consider these concerns with an estate planning professional, many of your fears can be put to rest. There are many estate planning tools available to those who choose to explore them. I encourage all parents with children to begin asking themselves these questions and to seek out advice on the subject.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

Tips for Avoiding a Will or Trust Contest

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A will or trust contest can derail your final wishes, rapidly deplete your estate, and tear your loved ones apart.  Unfortunately, we have the opportunity to observe such contests on a regular basis, and even among families where no one expected there would be any controversy.  Avoiding a will or trust contest can save family relationships and substantial financial resources.  With proper estate planning, you can help your family avoid a potentially disastrous will or trust contest.

If you are concerned about challenges to your estate plan, consider the following:

  1. Do not attempt “do it yourself” solutions. If you are concerned about an heir contesting your estate plan, the last thing you want to do is attempt to write or update your will or trust on your own.  Only an experienced estate planning attorney can help you put together and maintain an estate plan that will discourage lawsuits.
  1. Let family members know about your estate plan. When it comes to estate planning, secrecy breeds contempt.  While it is not necessary to let your family members know all of the intimate details of your estate plan, you should let them know that you have taken the time to create a plan that spells out your final wishes and who they should contact if you become incapacitated or die.
  1. Use discretionary trusts for problem beneficiaries. You may feel that you have to completely disinherit a beneficiary because of concerns that a potential beneficiary will squander their inheritance or use it in a manner that is against your beliefs.  However, there are other options than completely disinheriting someone. For example, you can require that the problem beneficiary’s share be held in a lifetime discretionary trust and name a third party, such as a bank or trust company, as trustee.  This will insure that the beneficiary will only be entitled to receive trust distributions under terms and conditions you have dictated.  You will also be able to control who will inherit the balance of the trust if the beneficiary dies before the funds are completely distributed.
  1. Keep your estate plan up to date. Estate planning is not a one-time transaction – it is an ongoing process.  Therefore, as your circumstances change, you should update your estate plan.  An up to date estate plan shows that you have taken the time to review and revise your plan as your family and financial situations change.  This, in turn, will discourage challenges since your plan will encompass your current estate planning goals.

By following these four tips, your heirs will be less likely to challenge your estate planning decisions and will be more inclined to fulfill your final wishes. If you are concerned about heirs contesting your will or trust, you should seek professional advice now.

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Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice.

S Corporation or LLC

S Corporation or LLC, What’s best for you?

S Corporations and LLCs have many similar benefits, such as: both types of businesses will protect personal assets, any business income or loss passes through to the owner’s personal tax return, and creating an organization will give you heightened credibility.  So what’s the big difference?  An LLC has limited compliance requirements, meaning, there are fewer state-imposed annual requirements and ongoing formalities than an S Corp.  LLCs have a flexible management structure, any organizational structure that is agreed upon by the owners can be used.  Unlike S Corps which have a board of directors who oversee the major business decisions of the company and officers who manage the day-to-day affairs.  Also, LLCs have fewer restrictions as to who can be an owner and how many owners a LLC may have.  There are some advantages that belong solely to S Corps too.  Interests in an S Corp can be freely transferred without triggering adverse tax consequences, it’s usually more difficult to transfer a LLC.  Also, S Corp shareholders can draw salaries as employees and also receive distributions that are tax-free to the extent of their investment in the corporation.

If you’re thinking of starting a small business consider the advantages and disadvantages of each organization to make sure you choose what’s best for your business.

Cristin Silliman, Esquire.

813-925-8083

http://www.thelegacylawfirmllc.com

Disclaimer: The content in this internet website is for informational purposes only and should not be construed as legal advice. Please contact an attorney for legal advice