FLORIDA ESTATE PLANNING

Transcription

1 FLORIDA ESTATE PLANNING VOL. 1 James G. Pressly, Jr. John W. Randy Randolph, Jr. Editor: Acquisitions Editor: Production: Lisa Dunne Neil Stadtmore Sarah Lee Amanda Winkler James Publishing, Inc. Contact us at (800) or Rev. 1, 11/12

2 FLORIDA ESTATE PLANNING F-2 Copyright 2012 James Publishing, Inc. ISBN: This publication is intended to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher does not render legal or other professional services. If legal advice or other expert assistance is required, seek the services of a competent professional. Persons using this publication in dealing with specific legal matters should exercise their own independent judgment and research original sources of authority and local court rules. The publisher and the authors make no representations concerning the contents of this publication and disclaim any warranties or merchantability or fitness for a particular purpose. We view the publication of this work as the beginning of a dialogue with our readers. Periodic revisions to it will give us the opportunity to incorporate your suggested changes. Call us at (714) or send your comments to: Managing Editor James Publishing, Inc Cadillac Ave., Suite H Costa Mesa, CA First Edition, November 2009 Revision 1, November 2012

3 F-3 ABOUT THE AUTHORS ABOUT THE AUTHORS James G. Pressly, Jr. is an undergraduate and law graduate of the University of Florida graduating with highest honors and a member of its Law Review. He has been a Fellow of American College of Trust and Estate Counsel since He is a past President of the Palm Beach County Bar Association and a member and past Chairman of the Florida Bar Wills, Trusts and Estates Certification Committee. Jamie is Florida Bar board certified in Wills, Trusts & Estates. He is listed in every edition of The Best Lawyers in America, and has spoken extensively at trusts and estates seminars for attorneys. Jamie is a partner in the West Palm Beach, Florida law firm of Pressly & Pressly, P.A. and his practice is limited to trust and estate matters, primarily including litigation matters. John W. Randy Randolph, Jr. is an undergraduate and law graduate of the University of Florida. He is a member of the Florida Bar Real Property Probate and Trust Law and Tax Law Sections. Randy is Florida Bar board certified in Wills, Trusts & Estates and also in Tax Law. He became a Fellow of the American College of Trust and Estate Counsel in Randy is a certified public accountant. He has written many articles on trusts and estates matters and spoken extensively at trusts and estates seminars for attorneys. Randy is a shareholder in the West Palm Beach, Florida law firm of Pressly & Pressly, P.A. and his practice is limited to trust and estate matters. Rev. 1, 11/12

4 FLORIDA ESTATE PLANNING F-4 SPECIAL CONTRIBUTOR Tom Ellwanger EDITORIAL ADVISORY BOARD The following individuals have assisted in this book by providing editorial feedback on one or more of the chapters: Keith B. Braun Comiter, Singer, Baseman & Braun, LLP Palm Beach Gardens, Florida William C. Carroll Mettler Shelton Randolph Carroll & Sterlacci Palm Beach, Florida Troy B. Hafner Gould Cooksey Fennell, P.A. Vero Beach, Florida J. Cater Randolph II Mettler Shelton Randolph Carroll & Sterlacci Palm Beach, Florida

5 F-5 TABLE OF CONTENTS ABBREVIATED TABLE OF CONTENTS Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Volume 1 Client Communications Homestead and Non-Probate Assets Lifetime Management & Incapacity Planning Minor Children All Wills Wills for Single Persons Simple Wills for Married Testators Tax-Planned Wills for Married Couples Volume 2 Codicils to Wills Generation-Skipping Transfer Planning All Trusts Revocable Inter Vivos Trusts Single Persons Revocable Inter Vivos Trusts Married Couples Funding the Revocable Trust Irrevocable Trusts Non-Charitable Beneficiaries Rev. 1, 11/12

6 FLORIDA ESTATE PLANNING F-6 EXPANDED TABLE OF CONTENTS Chapter 1 Client Communications I. CLIENT COMMUNICATIONS 1:01 Questionnaires 1:02 Conflicts of Interest Disclosure for Spouses & Duty of Confidentiality 1:03 Agreement for Legal Services 1:04 Documenting Non-Representation 1:05 Tax Planning Flowcharts 1:06 Cover Letters 1:07 Lawyer s Ethical and Legal Requirements at Client s Death: Files, Communications and Disclosures II. FORMS Form 1-1, Estate Planning Questionnaire (for a Single Client, or a Married Client Where Only One Spouse Is Being Represented) Form 1-2, Estate Planning Questionnaire (for Married Clients Where Both Spouses Will Be Represented) Form 1-3, Cover Letter Transmitting Estate Planning Questionnaire (Two Versions: Single Clients and Married Clients) Form 1-4, Regular Mail Cover Letter Transmitting Estate Planning Questionnaire (Two Versions: Single Clients and Married Clients) Form 1-5, Conflict of Interest Disclosure and Consent to Joint Representation of Spouses Form 1-6, Agreement for Legal Services Form 1-7, Declination Letter Form 1-8, Non-Hire Letter Form 1-9, Cover Letter Transmitting Simple Wills to a Married Couple Form 1-10, Cover Letter Transmitting Wills With Bypass (Credit) Trusts to a Married Couple Form 1-11, Acknowledgment and Receipt to Be Signed by Client re: Delivery of Original Estate Planning Documents to Clients Form 1-12, Cover Letter Returning Original Documents Form 1-13, Instructions Regarding the Storage of Wills Chapter 2 Homestead and Non-Probate Assets I. GENERAL POINTS 2:01 Distinction Between Probate and Non-Probate Property 2:02 Assets Subject to Probate 2:03 Assets Not Subject to Probate

7 F-7 TABLE OF CONTENTS 2:04 Advantages of Avoiding Probate 2:05 Disadvantages of Avoiding Probate 2:06 Advising Clients About Non-Probate Assets II. III. IV. HOMESTEAD 2:10 General Points 2:11 Definition of Homestead Property 2:12 Homestead Property Is Exempt From Forced Sale 2:13 Restrictions on Transfer 2:14 Restrictions on Devise 2:15 Definition of Protected Homestead 2:16 Protected Homestead Not Subject to Probate or Estate Tax Apportionment 2:17 Distinction From Property Tax Homestead 2:18 Examples Applying the Homestead Law ASSETS TITLED IN THE NAME OF TWO OR MORE PERSONS A. General Points 2:20 Assets That Can Be in the Name of Two or More Persons 2:21 Automobiles B. Assets in Joint Names (Other Than Bank Accounts) 1. Tenancy in Common 2:30 Definition and General Points 2:31 Distinction From Joint Tenancy 2:32 Presumption of Tenancy in Common 2:33 Expenses, Profits, and Creditors 2:34 Married Persons as Tenants in Common 2. Joint Tenancy With Right of Survivorship 2:40 Definition and General Points 2:41 Distinction From Tenancy in Common 2:42 Presumption Against Joint Tenancy 2:43 Creation of Joint Tenancy 2:44 Joint Tenancy Created by Gift 2:45 Severance of Joint Tenancy 2:46 Expenses, Profits, and Creditors 2:47 Married Persons as Joint Tenants 3. Tenancy by the Entirety 2:50 Definition and General Points 2:51 Property Subject to Tenancy by the Entirety 2:52 Presumption for Tenancy in Common Does Not Apply 2:53 Creation of Tenancy by the Entirety 2:54 Married Persons Joint Ownership Presumption 2:55 Conversion and Partition 2:56 Income, Expenses, and Creditors BANK ACCOUNTS A. Two or More Names in the Title 2:60 Joint Tenants With Right of Survivorship 2:61 Tenants by the Entirety 2:62 Tenants in Common Rev. 1, 11/12

8 FLORIDA ESTATE PLANNING F-8 B. Convenience Accounts 2:70 Purpose of Convenience Accounts 2:71 Definition and Ownership 2:72 Impact of Principal s Incompetency 2:73 Payment upon Death of Principal 2:74 Distinction From Joint Tenant With Right of Survivorship Account 2:75 Bank Has Right to Set-Off 2:76 Convenience Accounts Are Not Commonly Used in Florida C. Pay-on-Death (P.O.D.) Accounts 2:80 Definition of a P.O.D. Account 2:81 Rights Before the Death of a Party 2:82 Rights upon the Death of Parties 2:83 Statutory Model Contract of Deposit 2:84 Impact of Divorce on P.O.D. Account D. Totten Trust Accounts 2:90 Definition of a Totten Trust Account 2:91 Totten Trusts Are Pay-on-Death Accounts V. TRANSFER ON DEATH FOR SECURITIES 2:100 Securities May Have a Transfer on Death Designation 2:101 Effect on Ownership until Owner s Death 2:102 Form of Registration 2:103 Impact of Divorce on Securities Transfer on Death Designation VI. COMMUNITY PROPERTY RIGHTS 2:110 Community Property Retains Community Property Status VII. FORMS Form 2-1, Beneficiary Designation Instructions (Simple Will Plan) Form 2-2, Beneficiary Designation Instructions (Credit Shelter / Bypass Trust Plan) Chapter 3 Lifetime Management & Incapacity Planning I. GENERAL POINTS 3:01 Planning for Incapacity II. DURABLE POWER OF ATTORNEY A. History 3:10 Old Common Law 3:11 Modern Durable Power of Attorney 3:12 Springing Power of Attorney 3:13 Military Deployment Contingent Power of Attorney

9 F-9 TABLE OF CONTENTS B. Scope, Limitations and Considerations 1. Scope and Limitations on Exercise 3:20 Authority of Agent; Specific Grants of Authority Required 3:21 Specifically Precluded Actions 3:22 Delegation by Agent Limited to Investments and Security Transfer Agents 3:23 Authority Over Currently Held and Subsequently Acquired Property; Authority Over Property Outside of Florida 3:24 Estate Planning Authority Requires Separate Signed or Initialed Enumeration 3:25 Survivorship and Designated Beneficiary Accounts 3:26 Duty to Inquire Re: Appropriateness of Agent s Exercise of Authority Over Survivorship Designated Beneficiary Accounts 3:27 Ability of Agent to Make Gifts 3:28 Power to Engage in Banking and Investment Transactions 3:29 Health Care Decisions 2. Reluctance of Third Parties 3:30 Refusals to Accept Power of Attorney; Court Orders and Damages 3:31 Steps to Reduce Problems C. The Agent 3:40 Who May Serve as Agent; Selecting the Agent 3:41 Standard of Care and Agent s Duties 3:42 Liability and Exoneration Provisions 3:43 Mandatory Duties 3:44 Default Duties 3:45 Exceptions to Agent Being Required to Act in Principal s Best Interests 3:46 Agent s Acceptance of Appointment 3:47 Scope of Agent s Acceptance 3:48 Agent Compensation and Reimbursement for Expenses 3:49 Agent Communication With Estate Planning Attorney 3:50 Use of Principal s Funds for Agent to Retain Attorney to Represent Agent 3:51 Co-Agents 3:52 Co-Agent Authority to Delegate Bank Transactions to a Co-Agent D. Execution Requirements 3:55 Drafting and Signing Requirements 3:56 Statutorily Suggested Language Evidencing That Power Not Terminated by Subsequent Incapacity 3:57 Principal Age Requirement 3:58 Alternate Agents and Successor Agents 3:59 Responsibility of Co-Agent or Successor Agent With Respect to Breaches of Another Agent 3:60 Recording Generally Not Required E. Storing the Power of Attorney 3:65 The Agent 3:66 The Principal 3:67 The Drafting Attorney F. Termination 3:70 Termination of Durable Power of Attorney and Termination of Agent s Authority 3:71 Filing for Divorce Terminates Authority of Agent/Spouse Under a Power of Attorney Rev. 1, 11/12

10 FLORIDA ESTATE PLANNING F-10 3:72 Impact of Bankruptcy Proceedings 3:73 Revocation by Termination 3:74 Impact of Incapacity Proceeding 3:75 Photocopy of Power of Attorney Has Same Effect as Original III. HEALTH CARE ADVANCE DIRECTIVES A. General Points 1. Health Care Decisions 3:80 Types of Advance Directives 3:81 Amendment or Revocation 3:82 Directives From Other States 3:83 Restrictions on Providing Consent 3:84 Review of Surrogate or Proxy s Decision 3:85 Decisions in the Absence of an Advance Directive (Proxy) 3:86 Decisions Regarding the Treatment of Minors 2. Providers and Insurers 3:90 Affect on Insurance or Receiving Treatment 3:91 Care Providers Cannot Require an Advanced Directive 3:92 Providers and Surrogates Are Immune From Liability 3:93 Refusal to Comply With Directive Requires a Transfer B. Designation of Health Care Surrogate (DHCS) 1. Form and Execution 3:100 General Requirements 3:101 Designation of an Alternate Surrogate 3:102 Copy Must Be Provided to Surrogate 3:103 Suggested Forms 2. The Surrogate 3:110 Eligible Persons 3:111 Surrogate s Authority 3:112 Advantages to Having a Surrogate 3:113 Surrogate s Duty to Consult and Follow Principal s Wishes 3. When the DHCS Takes Effect 3:120 A DHCS Mandates Springing Authority 3:121 Notification of Spouse and Children 3:122 Physician s Evaluation 4. Revocation and Termination 3:130 Revocation by Principal 3:131 Revocation by Divorce 3:132 Not Revoked by Guardianship Proceeding 3:133 Terminated by Competency C. Life-Prolonging Procedures (Living Will) 1. History & Overview 3:140 Right to Refuse Treatment 3:141 Communicating a Refusal of Treatment 3:142 Standards in Other States 3:143 Florida s Standards 2. Advantages of a Living Will 3:150 Decisions With a Living Will 3:151 Decisions Without a Living Will

11 F-11 TABLE OF CONTENTS 3. Form and Execution 3:160 Often Executed Before Principal Faces Actual Situation 3:161 General Requirements 3:162 May Be Given Orally 3:163 Decisions Apply to Three Different Conditions 3:164 Suggested Statutory Form Not Mandatory 4. Using the Living Will 3:170 Principal Must Notify the Physician 3:171 Necessary Determinations 3:172 Proceeding in Accordance With the Living Will 3:173 Revocation of the Living Will IV. DO NOT RESUSCITATE ORDER (DNR) 3:180 Resuscitation May Be Withheld or Withdrawn 3:181 Form and Execution 3:182 Distinction From Living Will V. GUARDIANSHIP A. Court-Appointed Guardianship 3:190 Court Can Appoint a Guardian 3:191 Guardian Is Closely Supervised 3:192 Use of Guardianship With a Power of Attorney 3:193 Affect of Incapacity Proceeding on a Power of Attorney 3:194 Affect of Guardianship on Health Care Advance Directive B. Declaration of a Preneed Guardian 3:200 Right to Designate Preneed Guardians 3:201 Selection of Designated Guardians 3:202 Presumption and Assumption of Duties VI. HIPAA AUTHORIZATION 3:210 Background and General Rules 3:211 Concerns Regarding Access to Records 3:212 The Professional Judgment Exception 3:213 Whether to Prepare a HIPAA Authorization 3:214 Interaction With a Surrogate Designation 3:215 Compound Authorizations 3:216 Required Elements 3:217 HIPAA Authorization Form VII. FORMS Form 3-1, Durable Power of Attorney Form 3-2, Designation of Health Care Surrogate (Statutory Form) Form 3-3, Living Will (Statutory Form) Form 3-4, Declaration Naming Preneed Guardian Form 3-5, HIPAA Authorization Rev. 1, 11/12

12 FLORIDA ESTATE PLANNING F-12 Chapter 4 Minor Children I. GENERAL POINTS A. The Concept of Minority 4:01 A Person under 18 Is a Minor 4:02 The Disabilities of Nonage 4:03 Removal of Disabilities of Nonage B. Duties of Parents 4:10 Three General Duties 4:11 Parents Duty of Support 4:12 Tax Consequences of the Duty of Support C. Parents Rights to Minors Property 4:20 Parents as Natural Guardians 4:21 Devises and Other Payments: $15,000 or Less 4:22 Devises and Other Payments: Greater Than $15,000 D. Claims of Minors 4:30 Four Issues Regarding Claims 4:31 Representing a Minor s Interest: $15,000 or Less 4:32 Representing a Minor s Interest: Greater than $15,000 4:33 Settlements: Accepting Proceeds and Giving a Release 4:34 Judgment: Accepting Proceeds and Giving Satisfactions II. III. GUARDIANSHIPS A. General Points 4:40 Types of Guardianships 4:41 Qualifications of Guardian 4:42 Establishing a Guardianship of a Minor B. Guardianship of the Person 4:50 General Points 4:51 Planning by Designation of a Preneed Guardian 4:52 Planning by Designation in a Will C. Guardianship of the Property 4:60 General Points 4:61 Advantages and Disadvantages 4:62 Federal Income Tax Rules 4:63 Planning to Avoid Guardianships of the Property 4:64 Contending With a Failure or Inability to Plan THE FLORIDA UNIFORM TRANSFERS TO MINORS ACT A. General Points 4:70 Transfers May Be Made to a Custodian 4:71 Applicability of FUTMA 4:72 Creation of Custodianship 4:73 One Custodian, One Minor per Custodianship 4:74 Irrevocability 4:75 Termination

13 F-13 TABLE OF CONTENTS B. The Custodian 4:80 Qualifications of Custodian 4:81 General Duties 4:82 Powers and Compensation 4:83 Use of Custodial Assets for Minor 4:84 Substitute and Successor Custodians 4:85 Removal of Custodian C. Federal Tax Issues 4:90 Gift Tax 4:91 Income Tax and the Kiddie Tax 4:92 Estate Tax D. Comparison of Custodianships and Trusts 4:100 Advantages of Custodianships Over Trusts 4:101 Advantages of Trusts Over Custodianships 4:102 Use of Custodianship in a Will or Trust IV. FORMS Form 4-1, Declaration Nominating Preneed Guardian for Minor Form 4-2, Petition for Authority to Create Irrevocable Trust of Property of Ward s Estate Form 4-3, Order Granting Authority to Create Irrevocable Trust of Property of Ward s Estate Form 4-4, Irrevocable Trust of Property of Minor s Estate: Introductory Language Form 4-5, Transfer Under FUTMA (Including Provision for Substitute Custodians) Form 4-6, Custodian s Designation of Successor Custodian Form 4-7, Will Provision Providing for FUTMA Custodianship Form 4-8, Trust Provision Providing for FUTMA Custodianship Chapter 5 All Wills I. BASIC REQUIREMENTS A. Testator s Age and Intent 5:01 Testator Must Be 18, Married, or in Military 5:02 Will May Merely Appoint a Personal Representative or Revoke a Prior Will 5:03 Presumption of Testamentary Intent B. Testator s Capacity 5:10 Requirements of Testamentary Capacity 5:11 Capacity Determined as of Execution 5:12 Lucid Intervals 5:13 Burden of Proof Regarding Testamentary Capacity C. Challenges to the Validity and Reformations to Correct Mistakes 5:20 Burden of Proof 5:21 Undue Influence and Duress 5:22 Mistake Rev. 1, 11/12

14 5:23 Fraud 5:24 Insane Delusion 5:25 Contract to Make a Will 5:26 Tortious Interference 5:27 Reformations to Correct Mistakes FLORIDA ESTATE PLANNING F-14 II. III. IV. EXECUTION OF WILL A. Standard Wills 5:30 General Points 5:31 Testator s Signature 5:32 Witness Signatures 5:33 Witnesses Knowledge 5:34 Self-Proof of Wills and Codicils 5:35 Multiple Originals and Copies 5:36 Storage of Originals 5:37 Separate Writing for Tangible Personal Property B. Non-Standard Wills 5:40 Holographic Wills 5:41 Nuncupative (Oral) Wills 5:42 Will of a Nonresident 5:43 Military Testamentary Instrument 5:44 Joint Wills and Mutual Wills REVOCATION OF WILLS 5:50 Revocation by Subsequent Will or Codicil 5:51 Revocation by Physical Act 5:52 Lost Wills and the Presumption of Revocation 5:53 Presumption of Conditional Revocation (Dependent Relative Revocation) 5:54 Revival of a Revoked or Invalid Will 5:55 Revocation as a Result of Divorce PERSONAL REPRESENTATIVES A. Qualifications and Appointment 5:60 Qualifications 5:61 Trust Companies and Similar Corporations and Associations 5:62 Appointment and Acts Performed Prior to Appointment B. Duties and Requirements 5:70 Duties 5:71 Co-Personal Representatives 5:72 Bonding Requirement 5:73 Liability C. Compensation 5:80 Presumed Fee for Ordinary Services 5:81 Compensation for Extraordinary Services 5:82 Fee Provisions in Will 5:83 Personal Representative May Renounce Fee 5:84 Two or More Personal Representatives 5:85 Attorney Serving as Personal Representative

15 F-15 TABLE OF CONTENTS V. COMMON PROVISIONS A. Introductory Material 5:90 Title 5:91 Declaration of Intent and Revocation of Prior Wills 5:92 Domicile 5:93 Marital Status 5:94 Names of Children 5:95 Gender and Number of Clause B. Definitions 1. Definition of Survival 5:100 Simultaneous Death 5:101 Time Period (Will Survivorship Clause) 2. Definitions of Descendants and Heirs 5:110 Adoption 5:111 Division of Property (Per Stirpes) 5:112 Antilapse Statute 5:113 Failure of Testamentary Provision 5:114 Wipeout Clauses C. Devises 5:120 Types of Devises 5:121 Ademption 5:122 Exoneration of Liens 5:123 Residential Real Estate 5:124 Shipping Expenses 5:125 Abatement D. Special Provisions 5:130 Perpetuities Saving Clause 5:131 Payment of Debts and Administration Expenses 5:132 Payment of Death Taxes 5:133 Spendthrift Clause 5:134 Disinheritance Provisions Not Recommended 5:135 No Contest (In Terrorem) Clause 5:136 Funeral, Burial and Cremation Information VI. FORMS Form 5-1, Will Execution Instructions Chapter 6 Wills for Single Persons I. UNMARRIED TESTATOR WITH DESCENDANTS A. Will With Minors Trusts 6:01 General Points 6:02 Part A Gifts 6:03 Part B Fiduciaries Rev. 1, 11/12

16 6:04 Part C Trusts 6:05 Part D Distributions 6:06 Part E Administration 6:07 Part F Definitions 6:08 Signature Pages B. Will With No Trust Provisions 6:10 General Points 6:11 Part B Fiduciaries 6:12 Part C Administration C. Will With Pot Trust 6:20 General Points 6:21 Part C Trusts 6:22 Part D Distributions D. Will With Generation-Skipping Trusts 6:30 General Points 6:31 Part A Gifts 6:32 Part C Trusts 6:33 Part E Administration FLORIDA ESTATE PLANNING F-16 II. UNMARRIED TESTATOR WITH NO DESCENDANTS A. Will With Bequests to Persons Other Than Descendants 6:40 General Points 6:41 Part A Gifts 6:42 Part D Distribution 6:43 Part E Administration B. Issues Raised by Gifts to Persons Other Than Descendants 6:50 Generation-Skipping Transfer Tax 6:51 Will Contests III. FORMS Form 6-1, Will for Unmarried Testator With Minors Trusts Form 6-2, Separate Writing Form 6-3, Will for Unmarried Testator With No Trust Form 6-4, Will for Unmarried Testator With Pot Trust Form 6-5, Will for Unmarried Testator With Generation-Skipping Trusts Chapter 7 Simple Wills for Married Testators I. MARRIED TESTATORS WITH DESCENDANTS A. Wills With Minors Trusts 7:01 General Points 7:02 Part A Gifts 7:03 Part B Fiduciaries 7:04 Part C Trusts

17 F-17 TABLE OF CONTENTS 7:05 Part D Distributions 7:06 Part E Administration 7:07 Part F Definitions 7:08 Signature Pages B. Wills With No Trust Provisions 7:10 General Points 7:11 Part A Gifts 7:12 Part B Personal Representative 7:13 Parts C & D Administration and Definitions C. Wills With Pot Trust 7:20 General Points 7:21 Part A Gifts 7:22 Part C Trusts 7:23 Part D Distribution 7:24 Part F Definitions II. WILLS FOR THE SECOND MARRIAGE A. Wills With Immediate Gifts to Children 7:30 General Points 7:31 A-1 Tangible Personal Property 7:32 A-2 Principal Residence 7:33 A-3 Residuary Estate 7:34 E-1 Payment of Death Obligations and Death Taxes B. Wills With Trust for Surviving Spouse 7:40 General Points 7:41 A-3 Residuary Estate 7:42 C-1 Spousal Trust 7:43 E-3 Administrative Powers of Fiduciaries 7:44 E-3(a) Trustee s Powers Trust Estate III. FORMS Form 7-1, Husband s Will With Minors Trusts Form 7-2, Wife s Will With Minors Trusts Form 7-3, Tangible Personal Property Separate Writing Form 7-4, Husband s Will With No Trust Form 7-5, Wife s Will With No Trust Form 7-6, Husband s Will With Pot Trust Form 7-7, Wife s Will With Pot Trust Form 7-8, Husband s Will (Second Marriage) With Immediate Gifts to Children Form 7-9, Wife s Will (Second Marriage) With Immediate Gifts to Children Form 7-10, Husband s Will (Second Marriage) With Trust for Surviving Spouse Form 7-11, Wife s Will (Second Marriage) With Trust for Surviving Spouse Rev. 1, 11/12

18 FLORIDA ESTATE PLANNING F-18 Chapter 8 Tax-Planned Wills for Married Couples I. INTRODUCTION A. Overview 8:01 General Points 8:02 Amount of Exemption 8:03 Purpose of Bypass Trust 8:04 Exemption Portability 8:05 Planning With Retirement Plans B. Flowcharts 8:10 Flowcharts and Example of Tax-Planned Estate 8:11 Retirement Plans 8:12 Life Insurance II. III. IV. PARTS A AND D GIFTS AND DISTRIBUTIONS A. Specific Bequests 8:20 Tangible Personal Property 8:21 Primary Residence and Homestead Restrictions on Devise B. Bypass and Marital Deduction Formula Clauses 1. Expressing the Amount of the Gift 8:30 Forward Pecuniary Formula Clause 8:31 Fractional Share Clause 8:32 Fractional Share vs. Pecuniary: Effect on Capital Gain Recognition 8:33 Reverse Pecuniary Clause 2. Funding Mechanisms 8:40 Common Funding Mechanisms 8:41 True Worth Funding 8:42 Fairly Representative Funding 8:43 Comparing Fairly Representative Funding With True Worth Funding 8:44 Minimum Worth Funding 8:45 The Fractional Share Clause Alternative 8:46 Prohibit Funding With Non-Qualifying Property PART B FIDUCIARIES 8:50 Choosing Trustees (B-1(b)) 8:51 Corporate Trustees 8:52 Different Trustee for Incapacitated Spouse Than for Children (B-1(b) & (c)) 8:53 Trustee s Power to Appoint Own Successor (B-2(a)) 8:54 Requiring a Corporate Trustee (B-2(d)) 8:55 Removing and Replacing a Trustee PART C TRUSTS A. Marital Deduction Trust (C-1) 1. General Points 8:60 Purpose of Marital Deduction 8:61 Extra Measures Needed If Surviving Spouse Is Not a Citizen 8:62 Common Types of Marital Trusts: GPOA and QTIP

19 F-19 TABLE OF CONTENTS 8:63 Life Estates Do Not Qualify Unless an Election Is Made 8:64 Trusts Must Be Drafted Carefully 2. Qualifying Income Interest 8:70 Definition of Income Is Left to State Law 8:71 Qualifying Income Under Florida Law 8:72 Unitrust New Alternative to Traditional Income Definition 8:73 Forbidden Conditions 8:74 Unproductive Property 8:75 Income During Administration and After the Surviving Spouse s Death 3. Distributions (C-1(a)) 8:80 Trust Income Must Be Payable Annually 8:81 Principal Accessible Only by Spouse 4. GPOA Trust v. QTIP Trust a. Distinctions Between GPOA and QTIP 8:90 GPOA Includes General Power of Appointment 8:91 QTIP Requires Election b. GPOA Trusts 8:100 Marital Deduction Requirements 8:101 Power of Appointment Must Be Exercisable in Favor of Spouse or Spouse s Estate 8:102 Power of Appointment Must Begin Immediately 8:103 Power of Appointment Cannot Be Restricted 8:104 Power of Appointment Must Be Exercisable by Spouse Alone c. QTIP Trusts i. Elements of QTIP Trusts 8:110 Power of Appointment in Spouse Not Required 8:111 QTIP Election Made on Estate Tax Return 8:112 Election Can Be Partial and Can Be by Formula ii. QTIP-ing an IRA 8:120 Must Be Able to Compel Withdrawals From IRA 8:121 Amount of Withdrawal 8:122 Leaving an IRA to a Trust Risks Accelerating the Withdrawal Schedule 8:123 Income or Retirement Plans B. Bypass Trust (C-2) 1. General Points 8:130 Name of the Trust 8:131 Generally Flexible 2. Invasion for Health, Education, Maintenance, and Support (HEMS) 8:140 Income Beneficiary Cannot Have GPOA 8:141 Exception for HEMS 8:142 Permissible Words & Phrases 8:143 Comfort Allowed in Some States 8:144 Happiness Allowed in Some States 8:145 Florida Statute Prevents a General Power of Appointment 8:146 Exception With Consent of Adverse Party 3. Distribution and Invasion Alternatives (C-2(a)) 8:150 Trust Income Plus HEMS 8:151 First Marriage: Trust Can Accumulate Income 8:152 First Marriage: HEMS Distributions to Children 8:153 Second Marriage: Income Distributions Only 8:154 Second Marriage: Percentage of Trust Assets Each Year, Instead of Income Rev. 1, 11/12

20 FLORIDA ESTATE PLANNING F Making the Bypass Trust Eligible for a QTIP Election 8:160 Advantages 8:161 Disadvantages 5. Distributions to Descendants (D-4) 8:170 Purpose and Issues 8:171 Standard of Distribution 8:172 Parent s Obligation of Support 6. Special Power of Appointment 8:180 Purpose and Issues 8:181 Choice of Recipients 8:182 Allowing Disclaimed Property C. Trust Established With 100% of Residuary Estate Eligible for a QTIP Election. 8:180 Structure of the Trust 8:181 QTIP Eligibility 8:182 Examples of QTIP Elections 8:183 Advantages and Disadvantages of Making the Residuary Estate Eligible for a QTIP Election 8:184 Marital Deduction and GST Provisions 8:185 Examples Illustrating Implementation of the GST Provisions V. NON-PROBATE ASSETS A. General Points 8:190 Importance of Including All Assets in Estate Plan 8:191 How to Include Non-Probate Assets B. Multiple Party Accounts 8:200 Right of Survivorship 8:201 Payable on Death C. Property Subject to Beneficiary Designations 1. General Points 8:210 Property Subject to Beneficiary Designation 8:211 May Name Trustee as Beneficiary 2. Naming the Beneficiary 8:220 Avoid Naming Estate as Beneficiary of IRAs and Life Insurance Policies 8:221 Rollover Considerations 3. Making the Trust s Beneficiaries the Designated Beneficiaries of an IRA or a Qualified Retirement Plan 8:230 Need Designated Beneficiary to Avoid Income Tax 8:231 Trust Must Meet Four Requirements 8:232 Making Beneficiaries Identifiable and Determining Which Life Expectancy to Use 8:233 Conduit Trust 8:234 Powers of Appointment VI. DISCLAIMER-BASED ESTATE TAX PLANNING 8:240 How a Disclaimer Plan Works 8:241 Advantages 8:242 Disadvantages 8:243 Drafting a Will in Anticipation of Disclaimer (A-2 and C-5) 8:244 Disclaimer-Based Funding of Bypass Trust With Retirement Plan Assets

21 F-21 TABLE OF CONTENTS VII. OTHER PROVISIONS 8:250 Tax Allocation Clause 8:251 Minor s Trusts (C-2 or C-3) 8:252 Division of Trusts (C-7 or C-8) 8:253 Formula Clause Does Not Require Any Particular Election/Income Tax Allocation Provision (E-2) 8:254 Powers of Appointment Not Exercised (F-7) 8:255 Powers of Appointment Exercisable by Beneficiaries (F-8) VIII. FORMS Form 8-1, Flowchart: Simple Wills Form 8-2, Flowchart: Tax-Planned Wills Form 8-3, Husband s Will With General Power of Appointment and Special Power of Appointment Form 8-4, Wife s Will With General Power of Appointment and Special Power of Appointment Form 8-5, Husband s Will With Outright Gift to Spouse, No Special Power of Appointment Form 8-6, Wife s Will With Outright Gift to Spouse, No Special Power of Appointment Form 8-7, Husband s Will With Outright Gift to Spouse and Special Power of Appointment Form 8-8, Wife s Will With Outright Gift to Spouse and Special Power of Appointment Form 8-9, Husband s Will With QTIP Provisions, No Special Power of Appointment Form 8-10, Wife s Will With QTIP Provisions, No Special Power of Appointment Form 8-11, Husband s Will With QTIP Provisions and Special Power of Appointment Form 8-12, Wife s Will With QTIP Provisions and Special Power of Appointment Form 8-13, Flowchart: Wills Establishing Trust With 100% of Residuary Estate (Eligible for a QTIP Election) Form 8-14, Husband s Will Establishing Trust With 100% of Residuary Estate (Eligible for a QTIP Election) Form 8-15, Wife s Will Establishing Trust With 100% of Residuary Estate (Eligible for a QTIP Election) Form 8-16, Husband s Will With a Disclaimer Plan Form 8-17, Wife s Will With a Disclaimer Plan Form 8-18, Tangible Personal Property Separate Writing Chapter 9 Codicils to Wills I. GENERAL POINTS A. What Is a Codicil? 9:01 A Change or Revocation of a Prior Will or Codicil 9:02 Treated Like a Will B. When Is a Codicil Preferable to a New Will? 9:10 Generally a New Will Is Preferable 9:11 Capacity Issues 9:12 Poor Eyesight or Other Physical Problems 9:13 Small Changes Rev. 1, 11/12

22 FLORIDA ESTATE PLANNING F-22 II. III. IV. EXECUTION AND OTHER REQUIREMENTS 9:20 Formalities of Execution 9:21 Capacity and Challenges 9:22 Use of Interested Witness Does Not Invalidate Codicil 9:23 Holographic Codicils and Nuncupative (Oral) Codicils Not Allowed 9:24 Self-Proof of Codicil CONSTRUCTION AND EFFECT OF A CODICIL A. Construction of Codicil 9:30 Construed With Will 9:31 Revokes Will or Prior Codicil 9:32 Contract Not to Revoke Will B. Codicil May Republish Will 9:40 Will Republished if Codicil Refers to Will 9:41 Invalid Will Can Be Made Valid by Republication C. Effect of Republication in Particular Situations 9:50 General Points: Codicil Can Change Construction 9:51 Pretermitted Spouse and Pretermitted Child 9:52 Divorce Between Dates of Will and Codicil REVOCATION OF A CODICIL OR A WILL 9:60 Methods for Revoking a Codicil 9:61 Revocation of Will Revokes Codicils to That Will 9:62 Revocation of Codicil Reinstates Provisions of Will 9:63 Revocation of Will Normally Does Not Reinstate Provisions of Earlier Will 9:64 Presumption of Conditional Revocation (Dependent Relative Revocation) V. FORMS Form 9-1, First Codicil to Last Will of Testator (Male Testator) Form 9-2, First Codicil to Last Will of Testatrix (Female Testator) Chapter 10 Generation-Skipping Transfer Planning I. THE GENERATION-SKIPPING TRANSFER TAX (GST TAX) A. Purpose of the GST Tax 10:01 Generation-Skipping Trusts Can Avoid Estate and Gift Tax 10:02 GST Tax Exists to Limit Generation Skipping B. What Is a Generation 10:10 GST Tax Taxes Generation-Skipping Transfers 10:11 Definition of Skip Person 10:12 Descendants of Grandparents and the 25-Year Rule 10:13 Move-up Rule (Predeceased Ancestor Rule) and 90-Day Rule

23 F-23 TABLE OF CONTENTS II. III. C. Amount of GST Tax 1. Rate and Exemption 10:20 Rate 10:21 Exemption 2. Inclusion Ratio 10:30 Tax Rate Is Multiplied by the Inclusion Ratio 10:31 Computation of the Inclusion Ratio 10:32 Two Trusts Can Simplify Administration and Minimize Taxes 10:33 Division Into Two Trusts May Be Made at Any Time D. Direct Skips vs. Taxable Distributions & Terminations 10:40 Direct Skips 10:41 Trusts: Taxable Distributions and Terminations 10:42 New Basis at Taxable Termination (IRC 2654) 10:43 Trusts: The Move-Down Rule 10:44 Payment of the Tax EXCLUSIONS 10:50 Annual Exclusions 10:51 Medical & Educational Expenses 10:52 General Powers of Appointment ALLOCATION OF THE EXEMPTION/REVERSE QTIP ELECTION A. Whether and When to Allocate 10:60 Whether or Not to Allocate 10:61 Timely Allocations vs. Late Allocations 10:62 Reverse QTIP Election B. Retroactive Allocations 10:70 Late Allocation May Be Treated as Timely 10:71 Statutory Retroactive Allocations 10:72 Extensions in Individual Cases C. Deemed Allocations 1. Basic Rules 10:80 Unallocated Exemption Is Deemed Allocated 10:81 Original Rules 2. New Rules 10:90 Lifetime Transfers 10:91 Indirect Skip and GST Trust 10:92 Exceptions to GST Trust Definition Are Confusing IV. FORMS Form 10-1, Generation-Skipping Transfer Tax Chart Form 10-2, Husband s Generation-Skipping Transfer Will Form 10-3, Wife s Generation-Skipping Transfer Will Rev. 1, 11/12

24 FLORIDA ESTATE PLANNING F-24 Chapter 11 All Trusts I. GENERAL POINTS A. Trust Purposes and Uses 11:01 The Florida Trust Code 11:02 Tax Planning 11:03 Property Management for Minor or Incapacitated Beneficiaries 11:04 Probate Avoidance 11:05 Guardianship Avoidance 11:06 Creditor and Divorce Protection B. Definitions & Parties 11:10 A Trust Is a Legal Relationship 11:11 Settlor 11:12 Beneficiary 11:13 Representative of Beneficiary 11:14 Trustee C. Creation & Elements 11:20 Methods of Creation 11:21 Requirements: Capacity, Intent, Beneficiary, Duties for Trustee 11:22 Construction 11:23 Trust Purpose 11:24 Funding 11:25 Oral Trusts; Trusts That Must Be Written 11:26 Rule Against Perpetuities D. Revocable Trusts 11:30 Validity and Execution Requirements for Revocable Trusts 11:31 Presumption Regarding Revocability Changed in :32 Revoking or Amending a Revocable Trust 11:33 Sample Trust Provisions Regarding Revocability and Irrevocability E. Invalidity 11:40 Invalid Procurement 11:41 No Contest Allowed Until Trust Is Irrevocable 11:42 Comparison Between Will and Trust Contests 11:43 Administration of Trust Pending Outcome of Contest 11:44 Penalty (In Terrorem) Clause for Contest Is Unenforceable F. Alternative to a Trust: Custodial Accounts 11:50 Creation of Custodial Arrangement 11:51 Advantages and Disadvantages of Custodian Accounts 11:52 Advantages of Trusts Over Custodial Accounts II. SPENDTHRIFT TRUSTS A. Purpose and Creation 11:60 Purpose and Effect 11:61 Attachment Allowed if No Spendthrift Provision 11:62 Creation of Spendthrift Trust 11:63 Discretionary Trusts

25 F-25 TABLE OF CONTENTS B. Limits of Spendthrift Protection 11:70 Exceptions to Spendthrift Protection 11:71 No Spendthrift Protection for Settlor of a Revocable Trust 11:72 General Rule: No Spendthrift Protection for Settlor of Irrevocable Trust; Exceptions to General Rule 11:73 Trustee s Duty to Pay Expenses and Obligations of Settlor s Estate III. TRUSTEES A. Powers 11:80 Generally, Powers Are Very Broad 11:81 Trust Instrument May Alter or Create Powers 11:82 Multiple Trustees 11:83 Dealing With Property 11:84 Power to Employ Persons 11:85 Enforcing and Defending Claims 11:86 Caring for Minors and Incapacitated Beneficiaries 11:87 Power to Make Loans 11:88 Winding Up the Trust 11:89 Power to Distribute Principal to Another Trust (Decanting Statute) B. Duties 1. General Points 11:100 Some Statutory Duties Cannot Be Altered 11:101 Standards: Good Faith, Prudent Person, Special Skills 11:102 Exculpatory Clause May Relieve Trustee for Liability 11:103 Some Duties May Be Delegated 11:104 Court Review of Discretionary Powers 11:105 Powers to Direct Trustee Actions or Modification of the Trust 2. Specific Duties 11:110 Duty to Administer the Trust at an Appropriate Place 11:111 Duty of Loyalty 11:112 Exceptions to Duty of Loyalty 11:113 Duty of Loyalty Regarding Proprietary Investments 11:114 Duty of Loyalty Regarding Voting Stock 11:115 Duty to Collect and Control Property 11:116 Duty to Invest and Manage as a Prudent Investor 11:117 Duty of Impartiality Among Beneficiaries 11:118 Duty to Inform and Account to Beneficiaries 11:119 Settlor as Sole Trustee Has No Duties to Remainder Beneficiaries 11:120 Trust Accountings 11:121 Duty to Distribute When Trust Grants Life Income to Spouse C. Breach of Trust 11:130 Violation of Duty Is a Breach of Trust 11:131 Remedies for a Breach of Trust 11:132 Damages for a Breach of Trust 11:133 Six Month Breach of Trust Limitations Period 11:134 Limitations Periods if Six-Month Limitations Period Does Not Apply Rev. 1, 11/12

26 FLORIDA ESTATE PLANNING F-26 D. Succession 1. Appointment 11:140 Who May Serve as Trustee 11:141 Filling a Vacancy in a Trusteeship 11:142 Trust Can Allow Beneficiaries to Vote on Trustee 11:143 Circumstances in Which a Bond Is Required for Trustee 2. Resignation and Removal 11:150 Declining or Resigning 11:151 Removal 3. Duties of Successor 11:160 Compel Delivery of Trust Property 11:161 Redress a Breach of Trust by a Former Trustee 11:162 Exceptions to Duty to Redress a Breach by a Former Trustee IV. ADMINISTRATION A. Allocation to Principal or Income 1. General Points 11:170 Trustee Must Allocate Receipts 11:171 Trustees May Adjust the Allocation (Power to Adjust) 11:172 Unitrust as an Alternative to Power to Adjust 2. Allocation of Receipts 11:180 Changes From Prior Law 11:181 Receipts From Entities Are Generally Income 11:182 Special Rules for Private Trustees 11:183 Rent Is Generally Income 11:184 Interest Is Income 11:185 Bond Discounts and Premiums 11:186 Zero Coupon Bonds 11:187 Retirement Plans, IRAs, Annuities and Deferred Compensation Plans 11:188 Depreciation 11:189 Conducting Business Activity 11:190 Minerals, Water, and Other Natural Resources 11:191 Other Liquidating Assets 11:192 Derivatives and Options 3. Allocation of Disbursements 11:200 Expenses Charged Against Income 11:201 Expenses Charged Against Principal 11:202 Expenses Divided Equally Between Principal and Income 4. Deviating From the Default Provisions 11:210 Settlor Can Alter Statutory Default Allocation Rules 11:211 Trustee Cannot Be Given Full Discretion B. Trust Reformations, Decantings and Potential Tax Ramifications 1. Judicial Reformation Proceedings 11:220 Petitions to Modify or Terminate Irrevocable Trust 11:221 Reformation to Correct Mistakes 11:222 Modification to Achieve Settlor s Tax Objectives 11:223 Modification or Termination of Uneconomic Trust 11:224 Modification or Termination of Charitable Trusts (Doctrine of Cy Pres) 2. Nonjudicial Modification or Termination 11:230 Unanimous Agreement of the Trustee and All Qualified Beneficiaries 11:231 Nonjudicial Settlement Agreements

27 F-27 TABLE OF CONTENTS 11:232 Uneconomic Trust 11:233 Trust Confers Power to Modify or Terminate 11:234 Combination and Division of Trusts 3. Decantings 11:235 Decantings 4. Potential Tax Ramifications of Reformations, Modifications, Terminations and Decantings 11:238 Reformations and Decantings May Trigger Taxes Being Due C. Trustee Certifications 11:240 Purpose 11:241 Statutory Requirements D. Rules of Construction 11:250 General Points; Intent of Settlor 11:251 Adopted Persons and Persons Born Out of Wedlock 11:252 Gifts to Multigeneration Classes 11:253 Killer Not Entitled to Receive Property or Other Benefits 11:254 Dissolution of Marriage 11:255 Antilapse 11:256 Change in Securities 11:257 Abatement E. Compensation 11:260 Compensation of Trustee 11:261 Compensation of Attorney for Trustee Chapter 12 Revocable Inter Vivos Trusts Single Persons I. PURPOSES AND USES A. General Points 12:01 Definition; Tax Effects 12:02 Trust as an Incapacity Planning Tool 12:03 Delegation of Management B. Trust as a Will Substitute 12:10 Administrative Burdens 12:11 Privacy 12:12 Real Property in Multiple States 12:13 Probate Avoidance II. SIMPLE RIVT WITH MINORS TRUSTS FOR UNMARRIED SETTLOR 12:20 General Points 12:21 Introduction and Part I Purpose 12:22 Part II Trust Property 12:23 Part III Distributions during the Settlor s Life 12:24 Part IV Distributions after the Death of Settlor 12:25 Part V Postponement of Distribution 12:26 Part VI Succession of Trusteeship Rev. 1, 11/12

28 III. FORMS FLORIDA ESTATE PLANNING F-28 12:27 Part VII Administration 12:28 Part VIII Trustee s Powers 12:29 Part IX Revocation or Amendment 12:30 Parts X Definitions, and XI Agreement Binding 12:31 Signature Pages Form 12-1, Revocable Inter Vivos Trust for Single Person With Descendants Chapter 13 Revocable Inter Vivos Trusts Married Couples I. SIMPLE RIVT FOR MARRIED COUPLES 13:01 General Points 13:02 Introduction and Article I Name of Trust 13:03 Article II Property Subject to the Trust 13:04 Article III Reservations of Rights to the Settlor 13:05 Article IV Disposition of Income and Principal During the Lifetime of the Settlor 13:06 Article V Payments for Benefit of the Settlor s Estate Upon the Death of the Settlor 13:07 Article VI Disposition of Trust Balance Subsequent to the Death of Settlor 13:08 Article VI Effect of Florida Homestead Law 13:09 Article VII As to the Trustee and the Office of Trustee 13:10 Article VIII Administrative Powers of Trustees II. III. TAX-PLANNED RIVT FOR MARRIED COUPLES 13:20 General Points 13:21 General Framework of Tax-Planned Trust Forms 13:22 Article IV Disposition of Income and Principal During the Lifetime of the Settlor 13:23 Article V Payments for Benefit of the Settlor s Estate Upon the Death of the Settlor 13:24 Article VI Disposition of Trust Balance Subsequent to the Death of Settlor 13:25 Article VI Effect of Florida Homestead Law 13:26 Article VII Death Tax Payment Provisions That Apply Upon the Death of Settlor s Surviving Spouse 13:27 Article IX Administrative Powers of Trustees 13:28 Article X Restrictions and Limitations Upon the Trust, Trustee, and Beneficiaries 13:29 Article XI Survivorship Clause 13:30 Article XII Definitions and Limitations FORMS Form 13-1, Simple Revocable Inter Vivos Trust for Husband Form 13-2, Simple Revocable Inter Vivos Trust for Wife Form 13-3, Tax-Planned Revocable Inter-Vivos Trust for Husband Form 13-4, Tax-Planned Revocable Inter-Vivos Trust for Wife

29 F-29 TABLE OF CONTENTS Chapter 14 Funding the Revocable Trust I. GENERAL POINTS 14:01 Funding Depends on Purpose of Trust 14:02 Difficulties With Owning Assets in Trust 14:03 Income Tax Treatment 14:04 Tax Identification Number II. REAL PROPERTY 14:10 Homestead Issues 14:11 Due-on-Sale Clauses 14:12 Statutory Warranty Deed 14:13 Condominium/Homeowners Association Approval of Transfer 14:14 Recording 14:15 Florida Documentary Stamp Tax on Real Estate Transfers 14:16 Maintaining Homestead Property Tax Exemption 14:17 Out-of-State Property III. TITLED PERSONAL PROPERTY 14:20 Bank and Brokerage Accounts and Certifications of Trust 14:21 Certificates of Deposit 14:22 Stocks and Bonds 14:23 Automobiles and Boats IV. UNTITLED PERSONAL PROPERTY 14:30 Normal Personal Property 14:31 Valuable Personal Property V. NONPROBATE ASSETS 14:40 Joint Tenancy with Right of Survivorship 14:41 Retirement Plans, Annuities and Life Insurance VI. POUROVER WILLS 14:50 General Points 14:51 Tangible Personal Property and Interests in Social Clubs 14:52 Disposition of Residential Real Estate 14:53 Residuary Estate 14:54 Personal Representatives 14:55 Administrative Powers of Personal Representatives 14:56 Payment of Death Obligations and Death Taxes 14:57 Management of Property Distributable to a Minor 14:58 Survivorship Clause 14:59 Definitions VII. FORMS Form 14-1, Statutory Warranty Deed for Funding Trust, Without Spousal Joinder Form 14-2, Statutory Warrant Deed for Funding Trust, With Spousal Joinder Form 14-3, Condominium Certificate of Approval Rev. 1, 11/12

30 FLORIDA ESTATE PLANNING F-30 Form 14-4, Cover Letter Requesting Recording Form 14-5, Certificate of Trust to Maintain Homestead Property Tax Exemption Form 14-6, Certification of Trust Pursuant to Fla Stat Form 14-7, Letter of Instruction to Security Transfer Agent Form 14-8, General Bill of Sale Form 14-9, Specific Bill of Sale Form 14-10, Pourover Will for a Married Testator Form 14-11, Pourover Will for a Single Testator Chapter 15 Irrevocable Trusts Non-Charitable Beneficiaries I. TAX EFFECTS 15:01 Estate Tax 15:02 Gift Tax 15:03 Generation-Skipping Tax II. III. IV. CRUMMEY TRUSTS A. Beneficiary s Withdrawal Rights 15:10 Withdrawal Right = Annual Exclusion 15:11 Cristofani: Withdrawal Rights to Contingent Beneficiary 15:12 Time Restriction on Exercise of Withdrawal Right 15:13 Beneficiary Must Be Notified 15:14 Summary of Crummey Rules for Withdrawal Right B. Beneficiary s Tax Consequences 15:20 Release Accumulates Taxable Gifts 15:21 Testamentary Power of Appointment Delays Gift 15:22 Lapse of Power of Appointment Avoids Some Gift Tax 15:23 Strategies Involving Lapse of Power of Appointment 15:24 Income Tax Ramifications of Withdrawal Powers 2503(C) TRUSTS 15:30 Basic Requirements 15:31 Trustee s Discretion May Not Be Limited 15:32 Trustee Cannot Consider Beneficiary s Other Resources 15:33 Trustee Can Be Directed to Invest in Policy on Beneficiary s Life 15:34 Beneficiary Must Have a Power of Appointment EXTENDED 2503(C) TRUST 15:40 Advantage of an Extended 2503(c) Trust 15:41 Section 2503(c) Trust Extended by Right to Withdraw 15:42 Withdrawal Right Must Apply to Entire Corpus 15:43 Withdrawal Right Can Have Time Limit 15:44 Requirement of Notice to Beneficiary 15:45 Lapse of Withdrawal Right Is Not a Completed Gift 15:46 Spendthrift Creditor Protection Not Available Subsequent to Lapse of Withdrawal Right

31 F-31 TABLE OF CONTENTS V. INVESTMENT AND INSURANCE IRREVOCABLE TRUSTS 15:50 General Points and Significant Tax Traps 15:51 Transfer of Assets 15:52 Rights and Duties Related to Insurance Policies 15:53 Life Insurance and Employment Benefit Plans 15:54 Distributions During Settlor s Life or Trust Term 15:55 Disposition at Death or Termination of Trust 15:56 Continuation in Trust for Descendant 15:57 Administrative Provisions 15:58 Trustee Powers 15:59 Trust Irrevocable 15:60 Definitions VI. RELATED DOCUMENTS 15:70 Crummey Notices VII. FORMS Form 15-1, 2503(c) Trust for Two Settlors Form 15-2, Insurance Trust (One Settlor, One Beneficiary) Form 15-3, Insurance Trust (One Settlor, Children as Beneficiaries) Form 15-4, Investment Trust (One Settlor, One Beneficiary) Form 15-5, Investment Trust (One Settlor, Children as Beneficiaries) Form 15-6, Investment Trust (Two Settlors, One Beneficiary) Form 15-7, Investment Trust (Two Settlors, Children as Beneficiaries) Form 15-8, Crummey Notices Table of Statutes Table of Cases Index Rev. 1, 11/12

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33 FLORIDA ESTATE PLANNING VOL. 2 James G. Pressly, Jr. John W. Randy Randolph, Jr. Editor: Acquisitions Editor: Production: Lisa Dunne Neil Stadtmore Sarah Lee Amanda Winkler James Publishing, Inc. Contact us at (800) or Rev. 1, 11/12

34 FLORIDA ESTATE PLANNING F-2 Copyright 2012 James Publishing, Inc. ISBN: This publication is intended to provide accurate and authoritative information about the subject matter covered. It is sold with the understanding that the publisher does not render legal or other professional services. If legal advice or other expert assistance is required, seek the services of a competent professional. Persons using this publication in dealing with specific legal matters should exercise their own independent judgment and research original sources of authority and local court rules. The publisher and the authors make no representations concerning the contents of this publication and disclaim any warranties or merchantability or fitness for a particular purpose. We view the publication of this work as the beginning of a dialogue with our readers. Periodic revisions to it will give us the opportunity to incorporate your suggested changes. Call us at (714) or send your comments to: Managing Editor James Publishing, Inc Cadillac Ave., Suite H Costa Mesa, CA First Edition, November 2009 Revision 1, November 2012

35 F-3 FLORIDA ESTATE PLANNING ABBREVIATED TABLE OF CONTENTS Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Volume 1 Client Communications Homestead and Non-Probate Assets Lifetime Management & Incapacity Planning Minor Children All Wills Wills for Single Persons Simple Wills for Married Testators Tax-Planned Wills for Married Couples Volume 2 Codicils to Wills Generation-Skipping Transfer Planning All Trusts Revocable Inter Vivos Trusts Single Persons Revocable Inter Vivos Trusts Married Couples Funding the Revocable Trust Irrevocable Trusts Non-Charitable Beneficiaries Rev. 1, 11/12

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