Basic estate planning is the foundation of a person’s personal planning.
The basic estate plan includes incapacity planning documents (living will,
durable power of attorney for health care and durable power of attorney
for finances), last will and testament and in most cases, a revocable
living trust. In situations where there a client requires a revocable
trust in their planning, a deed is also prepared to deed the primary residence
into the revocable trust. These five documents are considered fundamental.
Planning beyond these fundamentals is considered advanced estate planning.
In addition to the basic estate plan, individuals with children should
arrange for their minor children’s guardians in the event of incapacity
It is important to emphasize that advanced planning should only be undertaken
by experienced estate planning professionals as the documents involved
are very complex and can easily be prepared improperly. Advanced estate
planning typically involves estate tax reduction, Medicaid planning and/or
special needs trust planning.
When achieving estate tax reduction, vehicles such as the irrevocable life
insurance trust, irrevocable trusts, the qualified personal residence
trusts and the defective grantor trusts are typically used. In general,
these trusts are used to remove assets from a person’s estate when
the individual’s estate is near the five million dollar federal
exemption limit (in Florida). Married individuals have a ten million dollar
combined federal exemption limit. When one spouse uses the other spouse’s
exemption limit, they are taking advantage of “portability.”
The revocable living trust (which is described above as a basic estate
planning tool) is used to carry over, or “port” the decedent
spouse’s unused exemption.
Medicaid and special needs planning involves setting up a supplemental
(or special) needs trust for the grantor/beneficiary. This trust allows
the grantor/beneficiary to take advantage of governmental benefits without
losing the ability to support themselves with other certain non-necessities
such as haircuts, spa days, etc.
Contact the attorneys of The Presser Law Firm, P.A. to implement a basic
and/or advanced estate plan for you or a family member.