:: SIMPLIFIED ::
MAKE THIS HOT TO LINK TO A FORWARD DOCUMENT
Avoiding probate without the need for a Trust - Many individuals are concerned about passing their assets to their children without the necessity of probate. Persons wishing to plan their estates do not have to use a trust to avoid probate, and can continue to control their assets during their lifetime. The situations best suited to this type of planning are clients whose assets are under $675,000 and consist of a home, bank accounts, annuities, life insurance policies, and IRAs.
Florida has approved the use of a “transfer on death” account for stock. This allows clients to have their brokerage accounts placed in their names, retaining complete control of the accounts during their lifetime. Upon their death, the accounts will revert to the designated beneficiary on the account.
The financial institutions have an account referred to as an “ITF Account”, (In Trust For account). The client controls this account during his or her lifetime, and upon death, the money is transferred to the beneficiaries designated on the bank account.
Heretofore, real property presented a unique problem. I am presently using a deed which allows clients to transfer their property to their beneficiaries and reserve a life estate as well as the power to sell and transfer the property during their lifetime. This allows the real property to pass in the same fashion as the transfer on death account brokerage accounts and the ITF bank accounts.
IRAs, annuities, and life insurance are controlled by contract and pass to the beneficiaries designated on the contract.
This simplified approach is ideal for clients who are not married, and who do not hold their assets in joint names with their spouse. By using the various accounts and the special drafted deed, the client does not have to have a testamentary trust. Although trusts have been used extensively, even for simple estates, they are complex legal documents and are rarely understood by the client.
In order to make provisions in the event of incapacity, a Durable Power of Attorney and a Designation of Health Care Surrogate can be signed in conjunction with this estate plan. A simple will is all that is necessary to serve as a fall-back position for assets that are not in transfer on death accounts, ITF accounts, or real property which is not conveyed with the reservation of a life estate and the power of sale.
This simplified approach to estate planning is not for every client. It is, however, an easily understood approach to estates which will pass to one or two children.
The
cost to prepare these documents is
usually less than the expense of preparing
a trust to accomplish the same purpose. |
