Spring Resolutions Are the Best Resolutions

February 26, 2020

The star-studded first day of spring is almost here! Thursday, March 19, 2020 marks the first day of spring in the Northern Hemisphere. It may not seem like spring since the Florida has the mildest winters in the Continental United States, but the days are getting longer, the sun is still up after 5 p.m.

Spring is a reset time for many of us, both personally and professionally. It is a great time to evaluate your previous year’s successes and failures and identify the areas that could use improvement. Here are three CRUCIAL “spring cleaning” resolutions to organize your life and provide you with a renewed sense of inner peace.

1. If You Own Your Home, You Need a Revocable Trust.
Think about how your savings account, life insurance policy, and brokerage account all allow for a beneficiary designation (sometimes called a Payable on Death [POD] form). That means once you pass away, that financial institution will work directly with the beneficiary you listed to receive the funds in that account. Can you do that with your house? The answer is NO. When the owners of a home, investment property, or any other type of real estate, pass away, the property must go through a court supervised process called “probate” in order for their heirs to inherit the property.

Common scenario: Husband and wife own a home together with both their names on the title of the home. One spouse passes away and the other spouse becomes the full owner. So far so good. Upon the death of the surviving spouse is when the trouble begins, and the probate problem comes to fruition. The next of kin (often the adult children) must open an estate with the court located in the county of the deceased owner’s last residence as listed on their death certificate. The probate process is long and arduous and requires waiting out a three-month creditor period (to see if decedent had any outstanding debt), followed by negotiations with those potential creditors. Let’s not forget the attorney’s fees involved here (approximately 3% of the value of the estate). Ultimately a Judge will decide, based on Florida statute, how much the next of kin will receive from the inheritance and each person’s proportional share of that inheritance. Note that if the deceased husband and wife owned property in other states, multiple probates are required. Sounds awful right? Our goal is to ensure that no family will have to go through the probate process. The best way to achieve this goal is with proper estate planning in the form of creating a Revocable Trust (often called a Living Trust). By creating a Revocable Trust, while the homeowners are alive and healthy, and transferring the home into the Trust, the entire probate process can be avoided. Upon the death of the last surviving spouse, the property passes directly to the beneficiaries listed in your Trust. A Revocable Trust is essentially, a means of listing the beneficiaries who you would like to inherit your home. You can add most of your other assets into this Trust along with any special provisions you wish. If the Trust is set up and funded properly, this will bypass the need for the next of kin to get stuck in probate court.

2. If You Have Minor Children, You Need a Last Will and Testament. 
If you have minor children (those under 18 years of age in Florida), it is imperative that you (and your spouse) name a guardian to physically and financially take care of your children if something happens to you. This designation can be done within your Last Will and Testament (“Will”) or in a separate document called a “Declaration Naming Pre-Need Guardian for Minor.” Putting your wishes in writing reduces lawsuits that arise over custody (often involving both sets of grandparents) in cases of your sudden or unexpected death.

3. If You Have Capacity, You Need a Durable Power of Attorney and Health Care Surrogate.
Don’t even think twice here. These are relatively simple and affordable documents (usually around $500 total) that will prevent legal conundrums and spare your family many woes. These documents work while you are alive (but sick, injured, or incapacitated) and allow you to designate who should make legal, financial, and medical decisions for you in case of an emergency and while you are incapacitated. Here’s some common scenarios to illustrate:

Common scenario 1: Husband and wife own a home and decide to sell it. They have an interested buyer and a closing scheduled. The husband suffers an injury requiring emergency surgery and can’t physically sign at the closing. Now what? If one of the persons on the title to real estate can’t execute the closing documents required of the seller, then the closing gets delayed indefinitely and you risk losing the buyer. Had the husband executed a durable power of attorney, his wife could have signed on his behalf. This is just one example of hundreds of everyday scenarios in which a durable power of attorney could prevent a serious legal problem from occurring.

Common scenario 2: Your elderly mother falls, breaks something, contracts the flu, pneumonia, etc. and ends up in the emergency room at her local hospital. You visit and do not like the level of care she is receiving. You want to transfer her to a more specialized facility, but the current hospital is giving you a hard time (delays, excessive paperwork, or outright refusal) in releasing her medical records. Hospital rules state that your mother must request her medical records in person, but you know she is too weak to be able to do that. Had your mother executed a Health Care Surrogate document naming you as her medical agent, the hospital is obligated to release any and all medical records to her agent. This includes her bloodwork, X-rays, CT scans, MRI results, etc. Without a valid Health Care Surrogate, the delays and roadblocks in obtaining medical records eat up precious time during someone’s recovery period. Again, one of hundreds of scenarios where this simple legal document saves a life.

We suggest the best way to cure spring fever is to get your estate planning documents in check before your condition worsens. Our experienced attorneys can help provide you and your family peace of mind and a sense of personal organization. Contact OC Estate and Elder Law at (954) 251-0332 or info@ocestatelawyers.com to get started. Our attorneys are fluent in English, Spanish, and Russian.