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.

The Reading of the Will – Fact or Fiction?

Inevitably, after a client has passed away, a family member will call and ask, “Will there be a reading of the Last Will?”  The answer is:  only if the family wants it.  The “reading of the will” is generally something you only see in the movies.  It adds to the movie drama (cue the music), when the son finds out in front of the family he has been disinherited.  

Logistically, for many families it would be hard to get everyone in the same place at the same time. Additionally, unless everyone signs a Waiver of Conflict, the attorney cannot provide advice to every member of the family.  The attorney can only provide legal advice to their client, generally the Personal Representative/Executor and only after having been engaged for this purpose.  If there was a “reading of the will,” chances are high everyone will be asking questions requiring legal advice.

So how do the interested parties know what the Last Will says?  Florida law provides the custodian of a Last Will must deposit the original will with the clerk of court in the county having venue of the estate within ten (10) days of knowledge of the death.  The court will keep the original Will and it becomes part of the public record.  Interested parties are able to obtain a copy from the court upon request. Beneficiaries may also make a request to the Personal Representative of the estate for a copy of the will and they would be entitled to receive it.    

Whether the “reading of the will” is fact or fiction really depends on your family.  For the majority of clients, it’s pure fiction.

To assist in preventing family drama, an updated estate plan done with a knowledgeable attorney and team of trusted advisors is key. For more information please attend one of our complimentary educational workshops.  Bring a friend and a get a free autographed copy of one of Peggy Hoyt's books.  Visit our website at Hoytbryan.com or call us for more information at 977-8080.    

The Green Way to Eternal Rest

Funeral homes are getting in on the “green” movement. They now offer different types of “green” burials. Chemicals are not used in these types of burials and you can opt for a biodegradable casket, or a “natural” burial where no embalming fluid is used and the body is wrapped in a biodegradable material, buried in the ground and allowed to decompose naturally. Natural burials take place at specially preserved “conservation cemeteries” monitored by the Green Burial Council or GBC. The GBC has strict rules that restrict how the grave site is dug, the types of markers that may be used, how soil is removed and replaced, and restricting the use of vaults or cement grave liners. Only biodegradable material is allowed to be buried with the body.

If you want to be cremated, don’t worry, there is an environmentally friendly method called bio-cremation or green cremation. The official name of the procedure is alkaline hydrolysis.  The process entails wrapping the dearly departed in a biodegradable covering, such as a silk wrap, and then placing them in a chamber filled with mostly water and alkali. The water is then heated to 350 degrees and the remains are liquefied.  Soft bone fragments remain which are then ground and placed in an urn for delivery to the family.

This method of cremation is more energy efficient than the traditional method; dissolving bodily remains using only 5% to 10% of the energy required to create the 1700 degree temperatures necessary for traditional cremation. Traditional cremation techniques also release harmful gases into the atmosphere due to the burning of mercury fillings and metallic joint replacements that are not created in the alkaline hydrolysis procedure. The green cremation method also allows recycling of these metallic joints as they do not dissolve in the alkaline solution.

The cost of green cremation is comparable to traditional cremations and takes about the same amount of time. Currently, six states, including Florida, have passed laws allowing alkaline hydrolysis as a method of cremation and several more have legislation pending.

When discussing final arrangements with your loved ones, you now have several options if you want to go out “green”!

For more information, check out http://alkalinehydrolysis.com/.

The Law Offices of Hoyt & Bryan, offers a quarterly workshop entitled, "What to Do When Someone Dies."  At this workshop we partner with local funeral professionals to answer all your important questions.  Bring a friend and receive a complimentary copy of Peggy Hoyt's book, Straight Talk! What to Do When Someone Dies.  For more information, please visit our website http://www.HoytBryan.com or call us at 407-977-8080.  

GRANDMA AND GRANDPA ARE LEFT WITHOUT INSTRUCTIONS

Imagine, you are on your way to a week long vacation in paradise. Your children are safely with Grandma and Grandpa. Safe that is, until young Henry falls off of his bike and breaks his leg. Of course, you have no knowledge he has broken his leg because you are mid-flight to your vacation destination. What are Grandma and Grandpa to do? They cannot leave Henry with a broken leg until you can be reached. So, they decide to take Henry to the emergency room. When they arrive at the ER, they are presented with several forms to review, complete, and sign. Here lies the problem: Henry is a minor and his grandparents do not have legal authority to make medical decisions for him. Henry will have to wait until his parents, his legal guardians, are available to be reached and consent to his medical care and treatment.

This situation could be easily avoided with a simple estate planning directive called a Special Durable Power of Attorney. This directive allows you to designate an Agent(s) for your minor child that has been left in the Agent(s) care. The Special Durable Power of Attorney allows the Agent(s) to perform and consent to decisions for purposes of providing care, shelter, clothing, education, and medical assistance for your minor child while they are in their custody.

If you have minor child and do not currently have a Special Durable Power of Attorney in place, have no estate planning, or it has been at least three years since you reviewed your existing estate plan, please feel free to contact our office to schedule an appointment with one of our experienced attorneys.  Feel free to attend our signature workshop, "The Truth About Estate Planning."  Bring a friend and receive Straight Talk - The Truth About Estate Planning, a complimentary book written by Peggy Hoyt, one of our founding attorneys. 

For more information or to schedule an appointment, call our office at (407) 977-8080 or visit our website at www.HoytBryan.com. 

Choosing Agents for Health Care and Power of Attorney

           One of the most important decisions you can make when planning for your future is who will take charge of your health care and financial decisions while you are alive, but unable to make these decisions for yourself.

           The agent responsible for your finances is named in your Durable Power of Attorney.  This document allows your agent to handle all financial decisions on your behalf. In 2011, there was a substantial change in the law governing Florida’s Powers of Attorney. If your Power of Attorney was executed prior to 2011, it may be a good idea to update your document, to ensure your agent is not restricted in what they may be able to do while acting on your behalf.

           Your Health Care Surrogate, named in your Durable Power of Attorney for Health Care, is in charge of all everyday medical decisions governing your care, in the event you are unable to make those decisions or communicate them for yourself.

           These are two of the most important people in your estate plan, and these roles are too often overlooked. Some people decide to name the same person for both roles, giving them control over both finances and medical decisions. Other people have named separate agents based on the agent’s strengths or personality. Ultimately it is up to you to decide what works best within your family dynamic. The key point being, whoever you name as your financial or medical agent, they must be someone that you trust implicitly to carry out your wishes in the manner you have requested.

The best agents are people you trust will act in your best interest. Discussing your wishes with this person prior to signing a Power of Attorney or Health Care Power of Attorney is highly recommended. This will help clarify your wishes and intent for your agent. It should also minimize confusion when and if you are unable to communicate clearly, and will provide them with some guidance on what they may be expected to do on your behalf.

           While most people do not wish to think about, let alone discuss, these issues, it is better to be prepared than have your loved ones guessing, or worse, fighting about what you would want done.

If you do not have estate planning in place, or it has been at least three years since you reviewed your plan, feel free to contact our office to schedule an appointment with one of our experienced attorneys.

           For more information or to schedule an appointment, call our office at (407) 977-8080 or visit our website at HoytBryan.com.