Our Florida Estate Planning Lawyers Can Help You Create an Estate Plan to Protect and Preserve Wealth For most affluent families, wealth preservation is best addressed through a combination of conventional strategies and custom-fit tactics. However, many of these strategies require thinking past the sort of baseline documents that most Floridians need. If you have wealth, whether in the form of exclusive real estate or a rare and valuable coin collection, simply writing a will is rarely enough to ensure your legacy’s safety. You don’t have to take chances on your peace of mind or your loved ones’ inheritances. Read more to learn about your best options for preserving wealth in Florida, or contact Beacon Legacy Law today to schedule your initial consultation. Intestacy and the Risk of Leaving an Estate Unprotected Even the wealthy sometimes make the mistake of failing to execute an estate plan before it’s too late. Unfortunately, in the absence of an estate plan, Florida’s rules of intestacy come into play. In an intestate succession, families have very little say in determining how inheritances will be divided. Instead, distributions are determined by the strict provisions of Florida’s probate code. As a general rule, these provisions favor surviving spouses and living children to the detriment of all other relatives. Even if you had intended to leave behind a gift for a stepchild, a sibling, or a grandkid, the probate court will be unable to accommodate your preferences. Establishing the Foundation of Your Florida Estate Plan Although some Floridians can make do with little more than a last will and testament, taking a very conventional approach to your plan can present a long-term risk if you own real property or control complex assets. Many wealth-oriented estate plans will instead integrate additional safeguards, including, but not limited to, the following: Trusts. A trust is a legal arrangement that lets you separate your personal assets from trust-controlled assets. After you pass away, your trust-controlled assets will not be categorized as estate assets. This provides several distinct advantages: it keeps trust assets out of probate and provides an additional layer of protection against creditor claims and other liabilities. Annuities. Grantor-retained annuity trusts, or GRATs, are a distinct form of trust that lets you, the “settlor,” receive recurring payments from trust assets while minimizing their estate’s tax liability. Advance care directives. Your estate plan should be about more than money. By using tools like an advance care directive, you can set conditions for the sort of treatment you should receive if you are ever incapacitated by an accident, illness, or old age. Powers of attorney. If you own your business, manage properties, or have an investment portfolio, you need to delegate powers of attorney. Different powers of attorney serve different purposes, with certain types making it easier for a trusted agent to make informed decisions if you’re sick or otherwise unable to exercise control of your own affairs. 3 Wealth Preservation Strategies Everybody needs an estate plan, but far too few people understand all that a good estate plan can entail. Let’s look at three estate planning strategies to preserve wealth for the next generation. 1. Estate Planning for Asset Protection Asset protection is a strategy designed to minimize liability-related risk. Depending on your personal and professional circumstances, liability could take the form of: Creditor claims Former spouses Disinherited children Civil judgments In general, minimizing liability requires separating your personal assets from your estate assets. This can be accomplished by forming: An irrevocable trust. An irrevocable trust is a legal arrangement that lets you cede control of certain assets to a third-party trustee. After you have transferred assets to the trust, the trustee has a fiduciary duty to manage trust-controlled assets in accordance with the trust’s charter and in the best interest of the trust’s beneficiaries. Most irrevocable trust assets are exempt from probate and are entirely off-limits to creditors. An irrevocable life insurance trust. An irrevocable life insurance trust is a trust that is funded by an insurance policy and which names a single beneficiary. Insurance proceeds pass to beneficiaries without the need for probate. Using an irrevocable life insurance trust, or ILIT, can reduce federal estate taxes and retain more proceeds for your heirs. 2. Estate Planning for Business Succession Business interests, including those in a family-owned concern, may be a large part of a wealthy individual’s portfolio and potential probate assets. Transferring business interests to a trust might help preserve the business for future generations. In addition, succession plans typically address leadership and management issues that may negatively affect business operations. 3. Estate Planning to Minimize Tax Concerns Engaging in tax-reduction strategies is just one method of ensuring as much wealth passes to your heirs as possible. Additionally, income tax, gift tax, and generation-skipping taxes can be addressed with your estate planning lawyer. For example, a generation-skipping trust may transfer wealth while passing taxes on to future generations. By establishing a Grantor-Retained Annuity Trust (GRAT), a grantor may make pay taxes incurred on large gifts made to his or her heirs. The grantor pays the taxes when the trust is created.
