Divorce Your Spouse Not Your Money

No one likes to contemplate divorce. Unfortunately, the reality is that 40% to 50% of marriages will end in divorce. This raises issues that should be addressed by couples considering dissolving their union. Jeff, and his wife, Sue, were in the process of divorcing when Jeff unexpectedly passed away. The divorce was contentious, to say the least, and had not yet been finalized. Jeff’s siblings wanted an autopsy done to confirm his cause of death. Sue, still legally his wife, had all the control and opted to have Jeff cremated immediately. As a result, there was no closure for the family and all of Jeff’s assets passed to Sue since there was no estate plan in place.

This scenario can be avoided if you implement an estate plan (if you don’t already have one) or update an existing plan. Most married couples name each other as executor or trustee and as the primary beneficiary of their estate plans. When contemplating ending your marriage, consider updating these very important roles, as well.

If a person dies without a will (intestate), many state laws provide that all assets pass to the surviving spouse. Most states consider a couple legally married until a judge has signed a final judgment of dissolution. This means that in many states, your soon-to-be-ex-spouse will still have control over your money, property and person, should something happen to you.

When considering divorce, couples should immediately review their estate plan along with all other aspects of their soon to be separate lives. This would certainly have helped Jeff’s siblings avoid unnecessary turmoil.

Seek the advice of a qualified estate planning attorney to guide you through the preparation of a will and related estate planning documents. For more information or to schedule an appointment, call our office at (407) 977-8080.

The Law Offices of Hoyt & Bryan assists families in the protection of their loved ones by focusing their practice in the areas of Estate Planning, Probate and Trust Administration, Elder Law including Medicaid and VA Planning and Special Needs Planning, Pet Planning, Business Succession Planning and Real Estate.  The founders, Peggy Hoyt and Randy Bryan, are both dual board certified by the Florida Bar in Wills, Trusts and Estates as well as Elder Law.  Hoyt & Bryan is the only law firm in Florida with the distinction of two attorneys with these certifications. We offer many complimentary educational workshops each week in our Learning Center at The Law Offices of Hoyt & Bryan and monthly workshops in the Auditorium of One Senior Place in Altamonte Springs. For more information please contact our office at 407-977-8080 or visit our website HoytBryan.com.

Asset Integration Part I- How you own your assets really does matter

A Living Trust provides one of the most flexible ways to plan your estate. A Living Trust can appoint a successor in the event of your disability, provide estate tax and asset protection benefits for loved ones at the time of your death, and avoid probate at the time of administration.  

The process of transferring assets from either individual or joint name to the name of your Living Trust is called "trust funding" or "asset integration."  Assets owned by a Living Trust can be styled a number of ways to adequately identify the trust. Most importantly, the asset title should identify the trustee(s), the trust name, and the trust date.  Handling of trust property is not complicated; the Trustmaker continues to control all of the investment decisions, including distributions of income and principal and there is complete transparency for income tax purposes as the trust uses the Trustmakers social security number.  The primary difference is assets are now titled in the name of the trust, or the trust is designated as beneficiary of assets like insurance, annuities and retirement plans. This asset integration series will discuss how a Living Trust should own the various types of commonly owned assets. 
 

Cash Accounts

 “Cash accounts” include those accounts held at banks and credit unions, like checking, saving and money markets. They may also include accounts held in conjunction with an investment account at a brokerage firm. The funding of these accounts is generally done in person with the cooperation of your financial institution.  Typically, account documents are executed or amended to adjust the institutions internal records.  Following is a discussion highlighting some of the concerns regarding the re-titling or transfer of cash accounts to a trust, such as opening a new account, loss of privileges, penalties or loss of accrued interest, printing new checks, direct deposits, tax identification numbers and FDIC insurance.

Many clients ask if a new account will need to be opened in order to reflect the transfer of ownership from joint or individual name to the name of the trust. This notion is usually met with resistance since many bank accounts have automated features such as direct deposit and automatic bill pay.  Most banks or credit unions will simply change the name on the account to reflect the new ownership in the trust. However, cash accounts linked with investment accounts may require that the original account be closed and a new trust account be opened.

There should be no loss of privilege to the cash account by funding it to the trust. Privileges such as senior citizen discounts, ATM privileges, free checking privileges and the like for accounts held in trust ownership may remain in place.  However, prior to funding any cash accounts, it is important to verify with the institution of your choice that there will not be any loss of account holder privileges as a result of the transfer.

Some banking institutions may impose a penalty for transferring a certificate of deposit (CD) prior to its maturity date.  Generally, the branch manager has authority to waive the penalty.  Prior to funding any CDs we suggest you verify that there will not be any penalties or loss of interest imposed as a result of the transfer.

Most financial institutions will provide their customers with a substantial degree of latitude as to what information is printed on the face of their checks.  There is no legal requirement that the name of the trust be printed on the checks.  Many Trustmakers prefer not to disclose the nature of their estate planning on the face of their checks and continue to use their old checks until time to re-order. 

Since funding a cash account is an internal procedure within most  financial institutions, changing the name of the account and not the account number, this transfer or re-titling should not affect automatic electronic deposits or withdrawals associated with the account.  These might include direct deposit of Social Security, pension and payroll checks, mortgage and home equity line of credit payments and debit cards. 

Occasionally, institutions will ask for verification of the tax payer identification number prior to effectuating a change of ownership. Under the Treasury Regulations, [Treas. Reg. 1.671-4] the Trustmaker is required to use their social security number as their tax payer identification number so long as the trust is revocable, the Trustmaker is one of the trustees, and the Trustmaker is not disabled.  If all of these conditions are met, the Trustmaker can satisfy the transfer agent by completing a W-9 form and continuing to use their Social Security number. 

Transferring cash accounts to a trust should not result in the loss any of the benefits associated with the FDIC insurance coverage.  In fact, in some situations, changing the ownership of your bank account to the name of your trust may actually increase your amount of FDIC insurance coverage.

The Law Offices of Hoyt & Bryan assists families in the protection of their loved ones by focusing their practice in the areas of Estate Planning, Probate and Trust Administration, Elder Law including Medicaid and VA Planning and Special Needs Planning, Pet Planning, Business Succession Planning and Real Estate.  The founders, Peggy Hoyt and Randy Bryan, are both dual board certified by the Florida Bar in Wills, Trusts and Estates as well as Elder Law.  Hoyt & Bryan is the only law firm in Florida with the distinction of two attorneys with these certifications. We offer many complimentary educational workshops each week in our Learning Center at The Law Offices of Hoyt & Bryan and monthly workshops in the Auditorium of One Senior Place in Altamonte Springs. For more information please contact our office at 407-977-8080 or visit our website HoytBryan.com.

A Tale of Forty Heirs

Do you have an estate plan?  We’ve said it before and we’ll say it again: If you don’t have an estate plan, the State of Florida has one for you and it may not be the one you want.  The majority of Americans likely do not have a relevant and proper estate plan.  

Not having a proper estate plan could require an unintended probate for those you leave behind.  Probate is not necessarily a bad thing and is very appropriate in many circumstances.  But let’s consider a case where a lack of planning resulted in unintended consequences for one family.

Jerry lived with his uncle, Arnold, in Arnold’s house. Jerry assisted in the home maintenance, cooking and general help. Arnold had no spouse and no children. It is probably safe to assume that Arnold wanted Jerry to inherit his home when he died. Arnold died without a will so his estate passed according to the intestacy laws of the State of Florida. Having left no spouse or children, it was necessary to go to the “family tree” to determine Arnold’s beneficiaries. 

Jerry agreed to serve as the personal representative of his uncle’s estate. An heir search company was hired to locate the beneficiaries of the estate, Arnold’s intestate heirs. The result: over forty (40) beneficiaries were determined to exist in at least four (4) different countries. It took several years to administer the estate. Arnold’s house is now owned by over forty individuals. Jerry is not even one of them. Where does Jerry live now? Who pays the property tax? Who does the yardwork? Who is in charge of the house? Probably not the outcome Arnold really wanted. Prior planning could have avoided this result.

Don’t let this happen to you. With proper estate planning and counselling, you can minimize unintended consequences, leave your legacy how you want, to whom you want, and the way you want. 

The Law Offices of Hoyt & Bryan assists families in the protection of their loved ones by focusing their practice in the areas of Estate Planning, Probate and Trust Administration, Elder Law including Medicaid and VA Planning and Special Needs Planning, Pet Planning, Business Succession Planning and Real Estate.  The founders, Peggy Hoyt and Randy Bryan, are both dual board certified by the Florida Bar in Wills, Trusts and Estates as well as Elder Law.  Hoyt & Bryan is the only law firm in Florida with the distinction of two attorneys with these certifications. We offer many complimentary educational workshops each week in our Learning Center at The Law Offices of Hoyt & Bryan and monthly workshops in the Auditorium of One Senior Place in Altamonte Springs. For more information please contact our office at 407-977-8080 or visit our website HoytBryan.com.

Cryopreservation – Not just for the rich anymore

Have you ever wished you could see into the future? Not just 5 or 10 years ahead, but 100 or 200 years ahead? It may now be possible. The field of cryogenics – the study of what happens to things at really low temperatures – has spawned the process of cryonics.  Cryonics is the process used to store human bodies at really low temperatures in the hope of reviving them at a date in the future.

There are a few myths that need to be dispelled regarding this process. First, the procedure can only be performed on a person once they are declared legally dead. You’re probably thinking “If a person is dead, how can they be revived?” First, you have to define death. Legal death occurs when the heart has stopped beating, but, cryonics scientists contend that some cellular brain function still remains. Total death, they say, is the point at which all brain function ceases. Once a person has been declared legally dead, the cryonics team moves in to maintain circulation, minimize cell function, and prevent blood from clotting in order to facilitate transport to a cryonics facility.

Myth number two.  Your body will be frozen. The cryonics procedure, called vitrification, does not actually “freeze” a person. The water in our cells would expand upon freezing and would destroy our cells. So, the first step is to replace water with a type of “human antifreeze” solution called a cryoprotectant. The body is then cooled to a temperature of -130 C, placed in a container and immersed in a liquid nitrogen bath to maintain a temperature of -196 C.

Myth number three.  Only the very rich can afford to be cryopreserved.  Costs for this procedure range from $28,000 up to $150,000. Many cryonicists fund this fee by purchasing an insurance policy that is payable upon death to the cryonics facility of their choice. 

The main drawback to cryonic preservation, of course, is that you have to be willing to bet on medical science advancing to the point where a patient can be revived. This isn’t as far off as we may believe. Some cryobiologists are predicting that by using nanotechnology (the use of microscopic machines to manipulate single atoms), it will be possible to revive a preserved person as early as 2040! 

Of course, if you plan on being around that far in the future, you also need to make sure you have assets available for when you are revived.  This is where the Personal Revival Trust and its associated planning becomes relevant.  A Personal Revival Trust is an irrevocable trust with an income beneficiary, generally a cryonics organization, during the period while a person is cryopreserved and then available to the trustmaker when the revival process is complete.   

For information regarding estate planning and cryonics, or to schedule an appointment, call our office at (407) 977-8080.