Estate planning without a lawyer

Palm Beach Post (FL)

When it comes to estate planning, most people want their assets to be properly distributed. Most people would also like to avoid the probate process. Additionally, many people would like to control how their assets are managed and distributed even after their death.

A properly drafted revocable trust can accomplish these aforementioned objectives. Trusts are an ideal tool for those who want to have posthumous control over their assets. A trustee can be appointed to manage and distribute the assets and the trust will dictate how, when and to whom one's assets will be distributed. However not everyone is concerned about having control over their assets after they are gone.

If your main concern is avoiding probate and getting assets distributed correctly, that can probably be accomplished without an attorney. Many assets like IRAs, annuities and insurance policies have beneficiary designations. These assets will pass to one's heirs without going through probate. Other accounts like bank and brokerage accounts do not typically have beneficiaries.

However, most institutions will allow you to use a TOD (transfer on death) designation on these accounts. TOD accounts provide beneficiary designations to the account that will allow the account to pass directly upon death to the named beneficiaries. The big challenge for many is avoiding probate on the transfer of one's home.

I have seen people try to avoid probate by transferring title to their homes to their kids while they are still alive. This is a bad idea for a couple of reasons. Besides giving up control of the asset, their kids will not get the beneficial "step up" in basis that applies to inherited real estate. This move could create significant excess tax liability for the kids. A better alternative is a ladybird deed. This type of deed allows the owner to name a revocable beneficiary on their Florida real estate. This will allow the property to avoid probate, get transferred to the designated beneficiaries and provide the beneficiaries with a full step up in basis.

Keith Singer is an attorney and Certified Financial Planner and he offers Advisory Services through Singer Wealth Advisors, a Florida Advisory firm.