Estate Planning and Asset Protection

Estate Plan Checklist and Important Terms

It is my experience that almost 90% of all estate plans fail because of their lack of coordination with the client’s financial plan.  If your attorney and financial advisor have not discussed your estate plan, it probably will not work as you expect.

Below is a checklist of important documents that everyone should have as part of their estate plan.  If you are resident of Florida, it is highly recommended that you have your estate planning documents drafted by a practicing Florida Attorney!

Trusts (also known as Revocable Trusts or Living Trusts) – When you hear the word “trust”, think “control”.  Trusts allow you to pass your assets “to whom, when and how”.  If you have minor children, a trust – either “living” or testamentary – is a must.  If you have a taxable estate, a trust is a necessary document.

Will – Will equals probate!  Many believe their Will avoids probate.  This is not true.  However, some assets you may WANT to go to, but not through, probate!  Everyone needs a Will even if they have a Living Trust.

Health Care power of Attorney – Very important document!  Your Health Care Surrogate is the person who will make ALL medical decisions on your behalf if you are unable to make those decisions.  It works in conjunction with your Living Will.  YOU NEED HIPAA LANGUAGE in your Health Care Power of Attorney!!!

Living Will – This is your declaration to the world that you do not wish to be kept alive by extraordinary means.  It works in conjunction with your Health Care Power of Attorney.  A Living Will, by itself, could be useless!

Durable Financial Power of Attorney – This document names the person who can take care of all your financial needs while you are alive.  This power ceases upon your passing.  If your Power of Attorney is older than 1997 it may be useless.

Asset Protection 

Legacy Creation System

I. Family

1. Protect yourself and your family
   1. Life Insurance that provides a living benefit and income in retirement  and education needs for you and your family/children and a benefit for your family at the time of death – money when they need it the most. Provides liquidity at death.
   2. Disability insurance – high chance of this.

2. Estate Plan to coordinate the insurance benefit, investments and assets (i.e. your home and property) with your objectives of giving what to whom, when you want and how you want!
   1. Estate Taxes – help pay Uncle Sam no matter what the amount of the tax is at the 2nd death.
3. Retirement plan
   1. IRA, 401 K, Pension, Annuities – defer income for retirement.  Problem with future higher tax bracket though

4. Education funding for children separate from above. 
   1. Extra money for higher education

5. Investments for other needs through life
   1. Taxable – pay as you go but it’s there when you want it

All this assumes a base amount is a money market/savings account for emergencies.  But remember that you can pull from these other accounts if necessary.

II.  Business

1. Exit Strategy – Buy-Sell agreements so your family gets full value of your company if something happens to you.
2. Key man insurance in case your key employee checks out – “guarantee a year’s worth of income”
3. Estate Plan – so your family does not have to probate your company and lose more of it’s value through lawyer’s fees and court costs and time
4. Retirement plan – if a flow through entity, you are going to pay taxes anyway, so why not defer, defer, defer!
5. Transition strategy to family members, key employees or even competitors!

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