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Estate Planning: The Will to Plan Now Makes for an Optimistic Tomorrow

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During this time, we’ve been focusing on ways that we can help you feel safe, confident, and connected despite the difficulties so many are experiencing. We know that, for many individuals, the only way to combat uncertainty is by taking care of the things you can control. That’s why we believe that a Will is actual mental medicine for your tomorrow.

It’s the best way to know that your assets are protected and that your legacy will continue the way you want it to. The good news is that, even if you do not feel comfortable coming into our office, we can handle the process completely online using an online notary.

We have had a massive influx of these clients in the past week, and each one has helped us understand that right now, planning is giving them a sense of calm about their present and their future. This overall sense of settled is something that is hard to come by right now, and we are so grateful to help families and individuals get these forms in order.

You can call through video chat, which has now become the standard means of communication around the world, and we will take you through each step and follow our thorough approach to getting everything you need communicated and taken care of with the help of RON (Remote Online Notarization).

Below, you will find three benefits of getting these forms completed with our assistance. Right now, it’s about the control we can have over our future. We don’t know what tomorrow may bring, but with a Will and a plan, we know that we have some control over what the future holds in store.

Three Benefits to Getting a Will Completed Today:  

  1. Peace of Mind – There are a few things in our world that are priceless. One of them is peace of mind. For many of us, stress holds space in our minds unless we plan a way to add some control to our future.
  2. Healthcare Assistance – Knowing that you have the specific people designated to make Healthcare decisions and having them aware adds a level of comfort to any situation.
  3. Avoiding Conflict Between Family Members – By having everything in order, you avoid any potential conflict that might arise. You want your family to be able to focus on grieving, not making difficult decisions.

Another aspect of estate planning that helps you feel confident is the employment of Healthcare Directives. The Healthcare Surrogate Form gives your agent the authority to make healthcare decisions for you. If a doctor finds you mentally incapacitated, these forms will be vital to making decisions about your health.

We cannot stress the fact that these forms protect you and your family from unwanted stress, conflict, and complications. Below, you will find three concrete reasons why Healthcare Directives work in your favor. 

Estate Planning: Three Ways Healthcare Directives Help You: 

  1. Worry Less – When you’re sick, you don’t have to worry about making any financial decisions. At any point, if you needed someone to help you with making those decisions, they can do that. 
  2. Less Limits – People aren’t being allowed into hospitals at this time unless they are sick. This can complicate measures, and by having structures and documents already in place, you don’t have to scramble last minute, which can add to your worry.  
  3. Better Systems – Stress can create sickness. Getting these documents in place can diminish your stress at a time where stress feels like a constant state of being. There are aspects of the future that we can’t control, but this is something you can, and the comfort of control truly helps your immune system stay strong.

A Will was built to allow you to have the most control over your legacy. It is just as much about you preserving your goals for your assets as it is about allowing there to be no conflict between loved ones in the event of your passing. It brings our clients great comfort to have these documents in place, and we feel it is our honor to give them a tomorrow they can enjoy more and worry less about.

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Reverse Mortgage

The Reverse Mortgage: An Overview

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A reverse mortgage is a loan available to homeowners age 62 years or older, that allows a homeowner to borrow against the equity they have in their house in the form of a lump sum, fixed monthly payment, or line of credit.

Unlike a typical mortgage, with a reverse mortgage, the bank pays the owner of the house monthly mortgage payments, and when the owner of the house dies or sells the home, the entire reverse mortgage balance becomes due and payable.

As long as the borrower is 62 or older and lives in the home, he or she is not required to make any monthly payments towards the loan balance. The concept of the reverse mortgage came about as a way to help retirees with limited income use the equity they have built up in their house without having to sell the property.

With these types of mortgages, the owner of the property is responsible for the property taxes and homeowners insurance premium, utilities, fuel, maintenance, and other home-related expenses. If only one spouse signed the loan paperwork, in certain situations, your spouse may continue to live in the home even after you die if he or she continues paying the above-noted bills and maintains the property. However, since they were not a part of the loan, all payments under the reverse mortgage will cease.

Most reverse mortgages have a “non-recourse” clause which means that the value of the reverse mortgage cannot exceed the value of the home when the loan becomes due. This is beneficial upon the death of the homeowner because there will not be any bills related to the reverse mortgage outside of the equity in the house.

No other assets in the Estate of the deceased are affected. There are three different types of reverse mortgages. As with any type of transaction, it is important to shop around before locking yourself into a long term loan.

Single-Purpose Reverse Mortgage

Homeowners can use single-purpose reverse mortgage proceeds only to pay for specific items that are approved by the lender. This single-purpose may be for necessary repair and maintenance, or payment of property taxes. The lender on this type of file is a state, local, or non-profit agencies, and is considered the least expensive type of reverse mortgage. This option is beneficial to many people because it offers fewer expenses and fees than other types of reverse mortgages.

Home Equity Conversion Mortgage

This type of mortgage is likely to be more expensive and is the most widely used version of the reverse mortgage. This is because there are not any income requirements, and the proceeds from the loan can be used for any purpose. This loan does not carry the same single-purpose limit detailed above.

Counseling is typically required before applying for this loan due to the higher expenses, interest rates, and payback requirements of this loan. Because this is a federally insured mortgage, there are usually high up-front or monthly ongoing insurance payments. These payments are usually taken out of the loan itself, and actually reduces the amount you are able to borrow.

Proprietary Reverse Mortgages

A proprietary reverse mortgage is not available to the average homeowner. As of 2018, in order to qualify for this type of reverse mortgage, your home must have a value of $679,650.00. This is not a federally insured mortgage and often has less stringent insurance requirements.

If you are considering this type of loan, you should also apply for the Home Equity Conversion Mortgage. This way you can compare fees to find out which loan fits better for your situation.

Wrapping it up

Using this type of mortgage can eat up the equity in your home, meaning there is less value to your estate that is left for your heirs. If your goal is to leave the house for your heirs to live in, a reverse mortgage may not be the right type of loan for you. If you would like to discuss how a reverse mortgage may benefit your situation, please contact give The Orlando Law Group, P.L. a call.

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Orlando Probate Law

What is Probate Law?

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How Probate Law works

People hear the words Probate Law and automatically get fearful of what they think it means.

Probate law is a court-supervised process where often the courts will appoint an administrator. They are responsible for administering the estate. This includes identifying and gathering the assets of a deceased person (decedent), paying the decedent’s debts, and distributing the decedent’s assets to his or her beneficiaries.

An example of distributing an asset might be where a decedent has a real estate asset that is granted to a family member. That family member will take legal possession of the real estate asset.

What is the purpose of estate planning?

Estate planning organizes for the distribution of a person’s estate once they pass away. Put simply, all of the assets owned at the time of death will be distributed based on the will, trust or estate plan. Assets in a person’s estate might include real estate such as houses and investment properties. Assets might also include personal property like stocks, bonds, bank accounts, cars, jewelry, etc.

Estate planning is a complex endeavor and is most appropriately handled by a professional, like an estate planning lawyer who will work collaboratively with financial advisors, insurance specialists, accountants, and other professionals in the planning of the distribution of assets.

Why is estate planning important?

Estate planning benefits people with estates of all sizes in that it allows the individual to decide exactly how their assets will be distributed upon their death. Regarding personal property, the individual can decide who should get specific assets, like a house or bank account. This makes everything very clear and prevents unnecessary arguments between the estate’s beneficiaries.

Further, estate planning can benefit the children of the decedent. With proper planning, the children of the deceased can be taken care of to ensure they maintain their quality of life.

More about the probate process

Typical questions that our probate lawyers hear include: Does probate mean I have to wait years for the distribution of assets? Does this mean I will be responsible for debts of my loved one?  Will the courts make me do something I don’t want to do? Will this cost me even more money?  I lost my loved one why do I have to go through this?

If a will does exist it may make probate run smoother. However, if a person dies in Florida without a valid will, all assets will have to be decided by the court and state laws once heirs are established.

What are claims against the estate?

A “claim against the estate” references a claim for money, assets, or other property that an individual has against the estate of a decedent. For instance, if the deceased person owes money to a person or entity, it is the responsibility of the executors or administrators of the estate to pa that debt.

Claims against an estate must be filed with United States Court that is handling the local probate or with the estate administrator.

What is the role of a probate attorney?

The attorney will file motions, guide and advise the client (Personal Representative) how to proceed. The attorney is the communicator to the court on behalf of everyone involved.

A probate attorney will need to assist with the following as well:

1.    Collecting and managing life insurance proceeds.

2.    Getting the decedent’s property appraised.

3.    Finding and securing all of the decedent’s assets.

4.    Advising on how to pay the decedent’s bills and settle debts.

5.    Obtaining an Estate Tax id number and estate bank account.

6.    Determining whether any estate taxes are owed.

If you die without having written and signed a will, you are said to have died “intestate.”

What happens if there is no will?

When there is no will your estate is distributed according to the intestacy laws of the state where the property resides, regardless of your wishes. The law does not always follow the path you would expect especially in situations where there are blended families.

Is it possible to avoid probate?

In some situations involving probate law, a probate is not necessary when there are IRA’s, 401 K’s, Life Insurance and other investments with beneficiaries. Some people also use Lady Bird deeds, trusts, accountants that are payable on death and other vehicles to avoid probate entirely.

In short, there are many different scenarios that go into an estate plan and probate, and each circumstance has exemptions especially in situations with blended families or extended families.  It is wise to get your estate plan done by an attorney rather than getting forms on line so that you can look at all the scenarios and plan appropriately. Then at the time of probate, an attorney for the estate is required by the Court.

We highly recommend talking with a probate law and estate planning attorney to make sure the wishes you have for your estate should you pass away are fulfilled.

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What NOT to Include in Your Last Will and Testament

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OLG LEGAL COMMENTARY:

Attorney Christina Miner

What NOT to include in your Last Will and TestamentIt’s important to understand that even though there are things that you should leave out of your will, drafting your last will and testament is one of the most important steps one can take. The will identifies how you want your property and assets divided and who you want to get them when you are gone. While a will can include a variety of terms, there are some things that should not be included in your will.

1. Funeral and or Burial Instructions

A will is often not located until after the funeral or burial. If you include these types of instructions in your will, most likely these wishes will not be discovered until after your funeral. It is usually better to convey your wishes ahead of time by speaking with the loved one who will most likely be responsible for handling this task or by purchasing a prepaid funeral/burial plan.

2. Leaving Gifts to a Beneficiary with Special Needs

A parent may think that leaving a large gift to a child or other loved one with special needs will ensure that the loved one will be able to live their lives to the fullest or that they will have the ability to receive all the care they need. The last will and testament is not the place to bequest an outright gift to someone with special needs. A person with special needs receiving public benefits often times can only have a limited income and limited assets. Anything over the designated amount can disqualify someone with special needs from continuing to receive benefits. There are certain types of trusts, such as a special needs trust, that specifically address the management of the specific needs of a person with special needs. The trust can be a standalone special needs trust or even a trust created within the last will and testament.

3. Leaving gifts or money for an illegal purpose

This does not happen very often, but it could be that someone tries to make a gift that says “to Joe, so long as he uses my car to transport immigrants over the border.” Inserting an illegal purpose could invalidate the entire will.

4. Assets with named beneficiaries

Life insurance, retirement plans, and financial accounts usually require a designated beneficiary be identified. Upon your death, those assets will be transferred to the named beneficiary, so they cannot be distributed by your will.

5. Jointly Owned Property

Tenants by the Entirety and Joint Tenants with Right of Survivorship mean that when you or the other joint tenant dies, the survivor automatically owns the property in full. If a gift of joint tenancy or tenants by the entirety is made in a will, it will fail. It can’t be done.

6. Property owned by a Trust

The last will and testament cannot make a gift of any assets that are owned by the trust. The property owned by the living trust automatically goes to the beneficiaries and is managed by the trustee. If you want to leave the asset to someone else or change the terms, it must be done by an amendment to the trust, not the will.

7. Conditions placed on Gifts in your Last Will and Testament

Some people want to put conditions on gifts, and that can be okay, but one must be careful. Putting conditions such as “to Mary, so long as she marries a (insert religion) man” or “to Mary, so long as she divorces her bum husband” are not allowable and the will may be held invalid. Conditions such as “to Mary, so long as she finishes college” are okay.

If you are going to take the time to create a last will and testament, make sure that your time has not been wasted. Speak to an estate planning attorney who will ensure that the will is drafted properly and will be upheld in court.

Christina Miner is a Wills and Estate Planning Attorney with The Orlando Law Group. Her practice focuses on estate planning, guardianship, probate and trust administration. She has worked for private law firms, was assistant regional counsel for the Office of Criminal Conflict and Civil Regional Counsel – 5th District, and was senior attorney for the Florida Department of Children and Families. She earned her Juris Doctorate from FAMU College of Law, and earned her bachelor’s and master’s from the University of Central Florida.

To contact Christina, visit www.TheOrlandoLawGroup.com or call (407) 512-4394.

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Photo of Jennifer A. Englert - Attorney and Managing Partner of The Orlando Law Group

Lady Bird Deed – Estate Planning’s Best Kept Secret

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OLG LEGAL COMMENTARY:
Jennifer Englert
OLG Founder & Managing Partner

Photo of Jennifer A. Englert - Attorney and Managing Partner of The Orlando Law Group

What is a Lady Bird Deed?

Also known as an enhanced life estate deed or a ladybird deed, a Lady Bird Deed is a way to transfer property to someone else outside of probate, and it allows the original owner to retain control of the property and pass it to exactly who he or she wants to after death.  Basically the original owner (grantor) signs a deed stating when he or she dies the person who the property is deeded to (grantee) will automatically receive the property.  In the meantime, the grantor has all right over the property including the ability to sell if he or she wants to.

Further, because you retain the rights to your property during your lifetime, the deed is simply disregarded for Medicaid purposes.  This means that a transfer of Lady Bird Deed will not negatively affect your Medicaid eligibility.

Lady Bird Deed Advantages

A Lady Bird Deed has many advantages that should be considered, including:

  1. Avoiding probate since the transfer of property can happen outside of probate.
  2. Better control by the property owner who is allowed to, for example, sell or gift the property at will.
  3. Since Lady Bird Deeds are not considered a transfer of property and the property owner retains the right to use the property, the Lady Bird Deed typically does not affect qualification for Medicaid benefits.
  4. There are several tax benefits to a Lady Bird Deed, including the avoidance of filing a gift tax on the property transfer.
  5. Many of the advantages of a transferring property under a living trust are similar to those achieved with a Lady Bird Deed. The advantage of the latter is that establishing a Lady Bird Deed is much less costly than creating a living trust.

In the state of Florida, it is also important to know that homestead or primary residence is exempt from creditors’ claims.  Not only does a Lady Bird Deed protect this aspect of Homestead property and retain the homestead exemption, it can also potentially protect the property from a divorce settlement in certain cases.  As the property remains Homestead it also retains the Homestead exemption for property tax as long as it is drafted appropriately.

While a Lady Bird Deed should not be a replacement for a full estate plan, it is a good place to start and it often belongs as part of an estate plan unless your only heir is your spouse in which case Homestead passes directly to him or her in the event of death without the need for probate. Without this type of deed even a Homestead property will need a Judge to sign off on the transfer in a probate proceeding unless it is passing to your spouse who is still alive.

How was the Lady Bird Deed named?

You might be wondering how the Lady Bird Deed got its name. When the deed was created in Florida in the 1980s, the creator used President Lyndon Johnson’s family names in the example of how the deed works. President Johnson’s wife’s name was Lady Bird and from that example, the deed was named.

The probate and estate planning team at The Orlando Law Group has this and many other strategies at its disposal to protect you and your family assets.

Jennifer Englert is the managing partner and founder of The Orlando Law Group, PL. For over 15 years, she has focused on business disputes, business law, general civil litigation, special needs & education law, family law, personal injury, and real estate. She has represented entities and individuals in both federal and state trial and appellate courts.

Founded in 2009, The Orlando Law Group, has been named one of the fastest-growing law firms in Central Florida and through America [ranked No. 105 among the top 500 fastest-growing law firms in the United States, per the 2017 Law Firm 500]. It has earned a reputation as the Orlando-area law firm that cares about its clients and the communities it serves. Offices located throughout Orange and Seminole counties. To contact Englert, or for more information about The Orlando Law Group, please visit www.TheOrlandoLawGroup.com or phone 407-512-4394.

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As Aretha Franklin’s family might soon be finding out, failure to file legal documents prior to one’s death can cause turmoil.

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OLG LEGAL COMMENTARY:

Attorney Christina Miner

At a recent speaking engagement, I shared my own personal family story about the dangers of not being prepared for one’s own mortality – and how that lack of preparation effects one’s family.

My grandparents, you see, were in a horrific car accident in 1994 in South Florida. My grandmother was killed on-scene. My grandfather was declared brain-dead.

They had four kids, my mother being the oldest one. When they all went to Miami, they learned that my grandfather did not have a living will, or any documentation that said what he would want if ever in such a life-threatening position. So, as such, it was left to the four children to decide.

After discussions, they agreed that my mother would make the final decision as to what to do with my grandfather. And after speaking with all doctors, and seeing that there was no possibility whatsoever for him to survive, my mother made the difficult decision to take him off life support.

And then, after he died, one of her siblings said that — had it had been left up to them — they never would have done that. That sibling blamed my mother for killing my grandfather.

More than 20 years later, there is still a rift in our family that was caused by that decision. Yet if he had a Living Will, then he would have been able to have made the decision himself, while alive. And that is what I tell people – that YOU are making the decision as to what happens to you. And in doing so, you are not putting that on anybody else. All you are doing is telling people to carry out your decision that you have already made, should that ever happen to you.

I share that story because, unfortunately, most people tend to wait too long before they consider officially filing the appropriate documentation with regard to Living Wills, Trusts, and Estate Planning. So many of us wait, not thinking that tragedy will strike, and then when it does, we are legally all for the worse.

It is not just the average citizen, though, that acts – and/or reacts – that way. It is the rich and famous, too.

Aretha Franklin’s family will most likely be finding that out now themselves.

The legendary singer, who passed away last week from a battle with pancreatic cancer at the age of 76, had no will or trust at the time of her death.

According to her attorney, in a report in the Detroit Free Press, Franklin just “never got around to it.”

Due to that inaction, Franklin’s family might potentially have a long legal road ahead of them – similar to when Ike Turner passed away. He, too, did not have a will, and his estate has been in litigation for 11-plus years.

With regard to Aretha Franklin, the laws in Michigan say that her estate is supposed to go to her children. But since she did not have a specific will or trust, other relatives can technically come in and try to get something from her estate. By not having a Will in place, it opens the door for other people to come in and argue that they should have a piece of the pie. They can go potentially go to court and argue that they have an interest and deserve a cut of the estate.

The cost to do so, though, is not just time. Many dollars are uselessly spent by families on attorney and other legal fees, in order to contest the estate and go through litigation matters. Depending on how much time respective attorneys need to put into various matters, it can cost thousands of dollars each year for families to go through the process. And how do those fees get paid? By monies held in the estate. Thus, the estate value lowers with each dollar spent on those fees.

Throughout my career, I have seen too many examples of families arguing over what many would perceive as petty issues. I have heard of family members feeling like they deserved more money than was left for them, so they spent thousands and thousands of dollars on challenging the Will, with the case still being in court. I have seen families arguing with one another about estates that had nary a dollar in it. And I have seen heartbreaking cases where a young loved one passes away, and estranged family members receive monies that other family members feel that they do not deserve.

And virtually all of this – be it with regard to the families listed above, your family, or even Aretha Franklin’s family potentially — could be prevented by simply finding the 30 minutes to visit with an attorney and fill out the proper Wills, Living Wills, and/or Trust documents.

As for my respective family?

Well, after both grandparents died in that crash, almost my whole entire family got Living Wills.

And as for me? It helped lead me here, to help you with yours.

Christina Miner is a Wills and Estate Planning Attorney with The Orlando Law Group. Her practice focuses on estate planning, guardianship, probate and trust administration. She has worked for private law firms, was assistant regional counsel for the Office of Criminal Conflict and Civil Regional Counsel – 5th District, and was senior attorney for the Florida Department of Children and Families. She earned her Juris Doctorate from FAMU College of Law, and earned her bachelor’s and master’s from the University of Central Florida.

To contact Christina, visit www.TheOrlandoLawGroup.com or call (407) 512-4394.

Members of the media wishing to contact Christina or any other OLG attorney should call 20 A-M COMMUNICATIONS at (407) 917-20AM (2026).

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The Pros and Cons of Testamentary Trusts in Florida

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A trust is a formal arrangement made with a trusted person, or trustee, which conveys property as directed by you. Trusts can be created during your lifetime, which is known as an inter vivos trust. But trusts can also be created upon your death. Such trusts are known as testamentary trusts, and as is the case with most everything in this world, there are positives and negatives that go along with it.

A testamentary trust is created through your Last Will and Testament. As the Will does not go into effect until the time of your death, the trust does also not exist until then. Generally, these trusts are created for young children, relatives with disabilities, and others who may be inheriting a large sum of money.

So, why should you create a testamentary trust?

THE PROS:

Testamentary trusts, as an item in your will, fall under the jurisdiction and oversight of the judge and the court. This gives your trust several extra pairs of eyes that determine whether legal requirements have been met. Oversight also ensures that your trustee will cooperate accordingly, lest they violate a mandate of the court.

This is particularly helpful, as it ensures that your wishes will be followed to the letter and that your beneficiaries will not have to deal with any daunting issues brought about by mistakes in fulfilling legal requirements.

THE CONS:

As this is an item in your Will, the trust is funded during probate, and thus falls under probate proceeding. During the probate proceedings, assets will be transferred to the trust by a probate lawyer. As it is passing through probate court, the trust will also be held to the Florida probate filing fee. Probate also takes time, with small estates lasting in probate court for over a week, while medium-sized to larger estates can take up to two months.

Also, the terms of your testamentary trust will be a matter of public record, so anyone can see what you’re looking to do with your money. This can be a con for anyone who values their privacy.

At the end of the day, whether a testamentary trust or an inter vivos trust is right for you is dependent upon your personal preference. Do you want to avoid probate? Do you think you’ll need court oversight? Is having your trust as a matter of public record problematic for you? Once you answer those questions, you’ll have a better understanding of what kind of trust you want, and how the process will work for you and your trustees.

The Orlando Law Group specializes in the creation of both inter vivos and testamentary trusts. Call us today at 407.512.4394 to schedule a consultation.

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Debunking the Myths of Probate

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MYTH: The Probate Process Lasts for YEARS

Truth: The vast majority of estates actually pass through probate court quite quickly. There are some factors that could lead to an elongated process. Those include continued income generated by the estate (Like that of a celebrity), family fighting, or if the estate is massive in size.

MYTH: Avoiding Probate Saves Money on Taxes

Truth: Sorry, but no. Estate taxes are determined under the tax law, which exists separately from probate rules.

MYTH: Probate Will Eat Up Most of the Estate’s Funds

Truth: In most cases, probate costs less than five percent of the estate value. Even that is only the case when you’re actually required to go through for formal process. Not all estates are required to do it.

MYTH: All of an Estate’s Assets Pass Through Probate

Truth: Nope! Assets titled in your name are the only ones that will pass through probate. Any jointly titled assets will pass outside of probate to the surviving owner or owners. IRA’s, retirement plans, and life insurance plans will also pass outside of probate as per your designation of beneficiaries.

MYTH: My Information Will be Kept Confidential

Truth: Not true at all. Any information that passes through probate will be a matter of public record.

Probate is a highly detailed process, which most people do not have any in-depth knowledge of. For assistance in creating your Will, it is always best to seek the aid of an attorney. The Orlando Law Group stands at the ready to assist you through this process. Call 407.512.4394 to book a consultation today!

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How to Choose the Best Executor for Your Estate

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Trust is obviously a major factor in choosing an executor, and as such, many choose a family member of close friend. The most common choices in an executor often include spouses, children, or siblings. The key qualities needed to be an effective executor include honesty, communication, and organization.  The distribution of assets can become a nightmare if handled by someone with no organizational skills. It is also a good idea to name an alternate executor, in the event your first choice does not work out.

Generally, anyone can be an executor, with a few major exceptions which differ by state. Florida law states that an executor must be at least 18 years old, cannot be a felon, and must be mentally and physically capable of serving (not judged incapacitated by a court).  While it is usually best practice to name someone who lives close to you, Florida law does have requirements for naming out-of-state executors. Namely, the non-resident executor must be related to you by blood, marriage, or adoption.

If you do not have a friend or family member with these skills, then it might be time to look outside of your circle and hire a professional. Third party executors can include banks, attorneys, and trust companies, to name a few. The Orlando Law Group provides this service, acting on your behalf after the event of your death to ensure that the burden of handling your estate is undertaken by professionals. This also removes the burden from your family and friends during a difficult time.

For a consultation, call the experienced legal professionals of The Orlando Law Group at 407.512.4394. 

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CPA’s and Attorneys Partner to Aid Your Estate Plan

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Your CPA can help you determine the value of your estate and figure out how to reduce the tax liability. For example, you can reduce the overall size of your estate by spending some of that hard-earned money beforehand. You probably have already chosen whom you want to leave your assets to after you die. If you can afford it, give some gifts now. Enjoy seeing the results and appreciation of your gifted assets.  Federal law lets you give $14,000.00 a year ($28,000.00 if you are married) to as many people as you wish tax-free.

You can also remove the value of your life insurance from your estate by transferring ownership of the policy to an Irrevocable Life Insurance Trust.  This can reduce or even eliminate estate taxes, so more of your estate can go to your loved ones. The benefits will not be included in your estate as long as you live 3 years after the transfer of the existing policy.

You can also convert stocks and investment real estate into a Charitable Remainder Trust. This is beneficial as you get an immediate charitable income tax deduction and it removes their financial value from your estate.

There are many options when it comes to estate planning.  All of which your attorney and accountant can assist you with. The best benefit is peace of mind.

 

Wanda Schebel Headshot

Wanda Talley Schebel CPA, has been providing quality, personalized financial guidance to local individuals and businesses throughout Central Florida for over 25 Years. Her expertise ranges from basic tax management and accounting services to more in-depth financial planning for clients of all incomes. She has represented many clients before the IRS. Wanda has taught the IRS VITA classes and holds seminars on business management and budgeting. She is a licensed Certified Public Accountant in both Florida and Louisiana. 

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Update Your Estate Plan After Major Life Events

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1.       Marriage: Starting a life with your spouse brings with it many life-altering changes. But during this exciting time of wedding planning, honeymoon booking and even preparing for the eventual arrival of children, it’s vital that you don’t forget to keep your estate plan up to date. Doing so allows you to name your new spouse as an emergency contact or beneficiary for existing insurance benefits, and to ensure that he or she is taken care of in the event of your death.

2.       Divorce: Splitting up a marriage can be messy and costly. Updating your estate plan following the dissolution of a marriage is vital to ensure that your assets are split as per your wishes. Many people take their ex completely out of the equation, while some prefer to leave them something in their will. No matter what your decision may be, it is incredibly important to get your wishes on paper as soon as possible.

3.       Cash Infusion: If you receive a large salary increase at work or come into money through inheritance or chance, you’ll want to update your estate plan to accommodate a larger bank account.

4.       Having a Baby: Adding on to your family is a joyous occasion that calls for immediate alterations to your estate plan. Your new addition needs to become a beneficiary, and guardians must be named in your will. (This is also a great time to draft a will if you haven’t yet!) As you add on to your family over the years, you should continuously update your estate plan.

5.       A Death in The Family: If you outlive some of the people named in your estate plan, you will need to update once again. If your Power of Attorney, Health Care Proxy, or Executor passes away you will need to name new ones. Also, should a beneficiary die, their inheritance should be reallocated immediately to other living heirs.

6.       Sickness: If you are diagnosed with a chronic or fatal illness you should begin planning before your condition worsens. As per your estate plan, you can decide who will make medical decisions on your behalf in the event you become physically unable. You can also use this opportunity to fill out a Do Not Resuscitate order if your state allows it.

7.       Changing Laws and Locations: Federal and state laws are constantly in flux and can impact your estate plan. Also, since different states have different laws, it is important to check with a legal professional once you move to a new area to see if any changes need to be made to your existing plan.

The Orlando Law Group stands at the ready to aid in crafting and maintaining viable estate plans. To speak with an attorney, call 407.512.4394.

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Living Trust vs. Will: Know the Differences

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LIVING TRUST:

What is a living trust? A trust is a formal agreement you make with a trusted person, or trustee, to convey property as directed by you. A living trust is a trust that you create during your lifetime. These documents are in effect regardless of whether or not they contain property until your death.

Perhaps the greatest asset to utilizing a living trust is the ability to avoid probate because they pass to beneficiaries under the terms of the trust and not a will. Probate is the court system in which a person’s affairs are wrapped up subsequent to their death. Probate is costly, lengthy, and unnecessary for most estates. By dividing your property in a living trust, you are able to avoid this process and future headache for your loved ones. Property can be distributed to beneficiaries after the death of the grantor without incurring any fees or court interference.

Another benefit of a living trust is that it remains private. The contents of a will become a public document. Many people choose this route to keep their affairs private.  Also, while wills can be challenged through lawsuits, it is infinitely more difficult to attack a living trust.

Unlike wills, however, a living trust requires the signature and stamp of a notary public. Also, while a will can appear in any format, property left through a living trust must be first transferred into the trust. For items such as real estate, which include title documents, retitling must occur so that the owner of the property is the trust.

WHY A WILL THEN?

You might be asking yourself why a will is even necessary? Make no mistake, they are vital.

First off, a will can pass on certain rights that a trust cannot. It is only in a will that you can name legal guardians for children, as well as someone to manage any properties left to or earned by minors.

A will also gives you the right to name an executor who will be in charge of wrapping up your estate after your death. That person communicates with the court, pays your bills, and eventually distributes any property that has to first pass through probate. Living trusts do not allow for an executor, and rather names a successor trustee who will solely manage the property left through that trust.

A will also gives you the ability to leave instructions regarding how you want your debts and taxes to be paid, as well as forgive any debts owed to you. Wills are far simpler to create and require only the presence of two witnesses who will not receive anything under the will.

IN CONCLUSION:

Both a living trust and a will help the process of divvying up your estate, and can each accomplish different tasks to make the entire ordeal less harrowing for your beneficiaries. The presence of experienced and knowledgeable attorneys is vital to the process. The Orlando Law Group provides both trust and will creation services. Call 407.512.4394 for more information!

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When should an estate plan be reviewed?

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Estate Plan ReviewedAn estate plan is an important asset that should be updated as time goes on. Ideally, your estate plan should be reviewed annually or even quarterly, although it’s acceptable to update it at least every three to five years or when there is a life event, according to Fidelity.

What qualifies as a “life event?” Things like:

  • Marriage or divorce
  • The birth of a child or grandchild
  • A purchase of a home
  • Moving out-of-state
  • A death in the family
  • Career changes
  • When you receive an inheritance or significant asset
  • And more

There are all examples of life events that should make you pause and review your current estate plan.

Any large life changes will have a direct impact on your estate plan, and sometimes for reasons you may not even be aware of. When you have an important life event, it is best to consult with your estate planning attorney for the best plan of action.

Remember, life is dynamic. Things are constantly changing. If you haven’t reviewed your estate plan in a while, it might be time to seek counsel from your attorney to make it is up to date.

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When is the Right Time to Begin Estate Planning?

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estate planningWhat exactly is estate planning? It is twofold: (1) it’s deciding what to do with your possessions after you are gone and (2) it’s making sure your health care wishes are carried out if you become incapacitated. While most people don’t want to think about death and what happens when they die, it is still a good idea to begin planning for a time when you will no longer be around.

There are a few reasons why this is a good thing for you to do while you are still living and in good health both mentally and physically.

First, planning how you divide up your assets before you pass on lets you decide what happens to your stuff instead of a relative, friend, or the courts. When a person dies without any type of will or trust set up, all of their financial assets and property are subject to the laws of the state. Simply put: you will have no control over who inherits what you once owned. Everything is left up to pre-determined laws that have been set up by the state.

Also, when you die, your friends and family will already have a tough time coping with your loss. Making it easy for them to handle your estate is a great gift to give them. Having everything planned will allow them time to grieve and reduce the stress of fairly dividing your assets.

Lastly, if your estate is subject to taxes, a proper plan can help reduce or even eliminate these taxes, allowing your family to keep most of your assets instead of handing them over to the government.

If you decide to move forward with an estate plan, you will include a few important documents to make sure that all your bases are covered. A typical estate plan should include:

  • a will that is the primary document regulating your wishes as regards inheritance and guardianship;
  • a trust that relates to protecting assets for the benefit of yourself and/or specific persons;
  • a living will (also called a healthcare directive and proxy) that specifies your intent as regards decisions on your physical well-being and end-of-life arrangements respectively;
  • a power of attorney that enables a trusted Agent to make financial decisions for you in the event that you are incapacitated; and
  • for parents with minor children, a temporary guardianship document that names a trusted adult to care for minor children in the event of your incapacity.

A lawyer can help you clarify how to move forward with your estate plan and deal with any special circumstances you would like to consider.

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Deciphering the Jargon: What is a Living Will?

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Living Will
These are all terms we hear kicked around. We know that as responsible adults we should have these things. But, it can feel like a lot of jargon that is hard to decipher. What’s the difference between them anyway? And why not just put it off? The truth is, such documents are rarely urgent (until they are urgent!) and they are only needed when something awful happens. The result is that we often avoid tackling the whole mess.

But, it’s actually not a mess. It’s pretty straightforward if you understand the basics. Let’s start by defining a few terms. When you’re planning for what happens to your estate, it’s important to know the difference between the different legal documents that are available to you, so you can ensure everything goes according to your plan.

How is a living will different from your last will and testament? A last will specifies your last wishes and appoints someone to carry them out. It also transfers your assets to beneficiaries after your death. Finally, it names guardians for your minor children (if you have them).

A last will does not give directives about your health care or life support. That is where a living will comes into play. A living will, also known as an advance directive or a health care directive, spells out your decisions about life support and organ donation in advance. It also names someone to manage your healthcare. To avoid any conflict of interest, this person can be different than your power of attorney, who is named in another document to handle your financial and legal affairs.

A living will is a binding document to specify your medical wishes if you can’t communicate because of illness or injury. It addresses such questions as to whether you want life extending treatment while terminally ill or in a permanent coma.

Why have a living will? Two major reasons come to mind:

  • A living will spares your family the anguish of making life-support decisions without your input. It helps to avoid major arguments between family members at a vulnerable time.
  • A living will also gives you control of your healthcare by ensuring that your doctor understands your end-of-life wishes and treats you accordingly.

In order to proceed with a living will, we recommend that you meet with an attorney who can walk you through the important legal questions at hand. She can help you with the proper documentation for your state and help you think through potential scenarios that you might want to discuss with your physician and loved ones. There are numerous medical scenarios and procedures you or your loved ones could face. Through a living will, you can be clear about the specific medical treatments you do or do not wish to receive.

Many people think a living will is not something they need unless they reach senior citizen age. However, this could not be further from the truth. Life is unpredictable and often uncontrollable, giving every enough reason for adults of any age to invest in a living will in order to protect themselves when bad fortune arises.

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Time for a check up

New Year? Maybe it’s Time for a Check-Up

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With the start of a new year just behind us, many people have been taking the time to reflect on the past year and re-prioritize their objectives as they head into 2016. For many of us, we have a goal of kicking off the new year with renewed vigor and a clear mission. We make lists and think of personal habits and business changes we want to make.

But, it’s also important to make sure your own affairs are in order. One important item to add to your 2016 list should be getting an estate plan checkup.

Everyone has an estate, and every estate needs a plan. Whether you consider yourself rich or poor, when you die you will leave behind assets. Your estate might include cash and investments, real estate, tangible personal property, or even an interest in a business.

At its most basic level, an estate plan determines how your assets will be distributed to those you leave behind when you pass away. Because of the ever-changing nature of tax laws, financial markets and the economy, an estate plan checkup is an important activity to revisit. Even if you already have an estate plan, it is imperative that you revisit that plan in order to ensure that it remains relevant under your current family and financial circumstances.

Just like an annual visit to your physician, a periodic review of your estate plan can either reinforce the fact that all is well and in order, or it can uncover the need for additional attention to return your plan to a healthy state. Keeping a keen eye on your plan will go a long way in avoiding disputes between your loved ones, as well as managing the amount of your hard-earned dollars that must go to cover federal and state estate taxes.
No matter what your net worth, a basic estate plan should include a valid will, durable power-of-attorney, health care power-of-attorney, and a living will. Some situations might also make it desirable to use a trust or series of trusts to accomplish your goals.

An estate plan check-up involves a review of the terms of all of these documents, with a particular focus on determining whether the persons you named to act in your absence remain appropriate, and whether the plan for distribution of your assets is still what you desire.

In addition to the implementation or review of your documents, your estate plan check-up should look at related issues such as the desirability of life insurance, disability insurance, or long-term care insurance, as well as the ongoing impact of pre-nuptial agreements or any other documents that affect your assets.

Estate planning is not a static event that you grudgingly do once and then forget about it. On the contrary, estate planning is a continuing process, because life is a moving target that is full of constant change, so your estate plan needs to change as your life changes. A periodic checkup will insure that all is healthy as you move into the future.

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Celebrating Octobers Best Hue

Celebrating October’s Best Hue

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October. The rest of the country might be sipping Pumpkin Spice Lattes and watching the colors change to oranges; but around here, it’s a time to THINK PINK! Pink ribbon, that is. 

According to the American Cancer Society, Breast cancer is the most common cancer among women in the United States (other than skin cancer). Nearly all of us know someone whose life has been turned upside down by a breast cancer diagnosis. The good news is that since the pink ribbon’s adoption a symbol for the breast cancer cause in 1992, awareness has skyrocketed and millions of women are surviving the disease.

What can you do to THINK PINK this October? We have two suggestions. 

First, be informed. Take the time to learn about breast cancer and early detection. The American Cancer Society website is a wellspring of information and has links so that you can consider volunteering and donating to the cause. As well, the Florida Breast Cancer Foundation has information about events specific to the Orlando area.

Second, let Breast Cancer Awareness Month serve as a reminder to all of us that sometimes bad things do happen. Despite our best efforts, sometimes the unthinkable diagnosis becomes a reality. When those moments do come, we can’t underscore enough how important it is to have an estate plan. Estate planning is not just for the wealthy. It’s for those among us who have any assets at all. It’s our opportunity to make sure our finances continue to accomplish our goals even after we pass on. It’s also a gift to the family and friends we leave behind.

This first-hand testimony from the Forbes website continues to inspire us as we serve our clients and seek to insure a smooth transition for families who are grieving. The author outlines her personal story of handling her father’s estate after he died from colon cancer. She shares that “The most unexpected financial lesson my father taught me came after he passed away. I am the executor of his estate. My dad was always a planner, but the things he did to make this process easier are amazing. I feel compelled to share them with just about everyone I know.” (To read her full, inspiring story yourself, check it out at Reader Story: What My Father’s Death Taught Me about Estate Planning.)

We realize that estate planning is never an easy topic. For one thing, it’s personal. For another, it feels a little morbid. Conversations about the details surrounding death take a lot of courage. But, they can also help avoid surprises, lead to better financial planning and promote family harmony.

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DIY Online Wills Are They Really a Good Idea

Do-It-Yourself Online Wills: Are They Really a Good Idea?

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Online legal document services offer an enticing bargain. Most people realize that they need an estate plan to manage their affairs if something happens to them. And, let’s face it, estate planning attorneys are expensive.

That’s why many consumers are now questioning whether it’s possible to skip the attorney fees and use a low-cost website to prepare estate planning documents. The short answer is that, yes, it is possible. But, it’s not recommended. You could save a few bucks now, but end up creating an expensive and frustrating mess for your family.

Unfortunately, most people don’t realize what they are getting themselves into with an online document service. That’s because the online services have spent millions trying to create the impression that their services are similar to those of an attorney. They put lawyers in their commercials, hire celebrities to promote them, and even tout stories of people who have successfully used their documents.

But, all the marketing in the world can’t erase the simple truth. The online services aren’t law firms. They aren’t lawyers. They can’t give legal advice. Instead, they are “document assistants” – a term that states use to define service providers who type your information into generic form documents.

In other words, a document assistant is like a mindless typing zombie who enters your information into a form, whether or not it makes sense and whether or not it is a good idea. If you are stuck, they can’t help you. If you make a huge mistake, they can’t warn you.

It would be a crime for them to warn you. It doesn’t matter if the guy working on your documents is an estate planning genius. He’s simply not allowed to give legal advice. Think of it this way. A person needs a law license in order to give legal advice, just the same way that a doctor needs a license to write a prescription. Giving legal advice without a license is very much like selling drugs without a prescription. It’s a crime.

So, these companies design their generic forms so that, even without legal advice, it’s hard to make mistakes. That may seem like a good thing. But, it turns out that the best way to make sure that your documents don’t do anything wrong is to make sure they don’t do anything at all. They’re just do-nothing, one-size-fits-all generic documents.

That leads to the next problem with the online services. They can’t even promise you that the documents will work. Again, they can’t. They aren’t attorneys, which means they can’t promise a particular legal result.

Many clients are excited to learn that they can leave assets to a special needs child without jeopardizing government benefits; or, that they can protect a child’s inheritance from frivolous lawsuits, divorce or bankruptcy. A well-designed estate plan makes sure that your resources get where you want them and that they are used in the way you instruct. It’s about creating legally-enforceable provisions that do what you want done.

And, the online document services can’t promise any of that. They can’t promise you’ll achieve your goals. They can’t point out opportunities, and they can’t warn you about hidden hazards. Really, all they can do is save you a few bucks.

But, they play a clever price game, too. Most of the online services compare their prices to what an attorney would charge for similar documents. But, their comparisons are misleading in two ways. First, they compare the price they charge for a single document to the price that an attorney charges for an entire estate plan, which includes numerous documents.

More importantly, though, there is no way to compare the prices, because they aren’t even offering the same thing that you would get from an attorney. If a fast food restaurant told you that you could order their $1.79 “salad in a box” instead of paying twenty dollars for a fancy restaurant salad bar, you’d instantly recognize the faulty comparison. A wilted clump of lettuce in a plastic clamshell isn’t anything like an all-you-can-eat salad bar with every conceivable ingredient, made fresh and eaten in a nice environment with an attentive wait staff.

But, that’s because most people have experience with restaurants – both good and bad. They know how to judge quality, and they understand the “you get what you pay for” concept. But, when it comes to legal planning, most people don’t have the experience to know better. You only get to use an estate plan once. And, if you screw it up, you’ll never know. But, your family will know. If your estate plan doesn’t work properly, your family could end up paying the price and cleaning up the mess after you’re gone.
Your estate plan is the box that carries your entire life savings. It’s just not worth the risk of damaging your life’s work just to save a few bucks.

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Digital Estate Planning

Digital Estate Planning

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The two main classes of digital assets are 1) any online account that requires a username and password; or 2) any file stored in places including an individual’s computer, mobile phone, server, local DVD or CD-ROM, SD card or at online storage sites.

Online Accounts

If the client is the only person who has access to her online accounts, then what happens when she dies? Much of the concern involves the rights of the online company, which were granted when the individual initially accepted the account’s Terms of Service (TOS). Several issues to consider for online accounts requiring a username and password include the following:

  • The TOS Agreements of most popular online companies rarely, if ever, allow for the immediate or automatic transfer of the account to the personal representative.
  • Without access to a decedent’s bank and investment accounts, a trustee or executor will have difficulty obtaining necessary information for meeting the requirements of the underlying will and trust.
  • Without access to a decedent’s email, blog or website, the personal representative may not even be aware of certain ongoing obligations, especially with more transactions occurring online only.

Digital Files

Files on an individual’s computer are difficult Digital estate planning enough to find, depending on the individual’s levels of organization or disorganization. The personal representative’s job can become exponentially more difficult if the important data is stored offsite. Additionally, there are two main kinds of digital files to consider:
Client-Created Files – including scanned financial files, address books, and digital photos, but can also include valuable business documents or intellectual property.
Client-Purchased Files – including music, videos and e-books bought during the individual’s lifetime. In the typical TOS, the seller only grants the individual buyer a non-transferable license to use the work “for life.”

Steps You Can Take Now

Make a list of all digital assets. This should be a comprehensive list of all of your online accounts and data files, including email accounts, websites, hard-drives, important Word and Excel documents, online storage accounts, and social media accounts.
List wishes for each asset. For local hardware containing data files, this can include leaving the asset directly to a specified heir. For online accounts, this can include:

  • Shutting down the account
  • Doing nothing
  • Archiving contents on CD or DVD
  • Creating an auto-response on the account; and/or
  • Forwarding all messages to another place
  • Choose the person who will receive each asset
  • Provide access and control to the recipient
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