ESTATE PLANNING
The Law Office of Omaida Delgado offers estate planning and health care planning services, including the preparation of wills, trusts, and ancillary estate planning documents and advance directives such as durable powers of attorney, health care surrogates, HIPPA releases and living wills.
The attorneys in our estate planning department work with clients to craft estate plans tailored to meet their individual estate planning situation, including planning for a disability, maximizing family harmony, minimizing taxation and administrative costs, providing for asset protection, maximizing governmental resources such as social security and Medicaid, and properly planning for the succession of ownership of farms and closely held businesses. Due to having some of the most advanced “in house” created estate planning documents to be found regionally, as well as a firm-developed efficient document assembly system and a staff of specialized legal assistants and secretaries to assist at all levels of the estate planning process, we can cost-effectively deliver comprehensive estate plans to our clients which meet their needs, goals and personal values. Besides advising clients on developing their own estate plans, we also represent fiduciaries and beneficiaries of trusts and estates.
Law Office of Omaida Delgado’s estate planning attorneys bring a special wealth of knowledge, experience and peer recognition in representing our clients in the estate planning, probate and trust area.
A trust becomes effective at time of execution. Our law firm assists clients with all aspects of trust administration including the funding of the trust, the administration of trust assets, and with the assistance of CPA’s, the payment of taxes and expenses. Ms. Delgado’s law firm also assists clients during the eventual liquidation of the trust and final distribution. Additionally, the attorneys prepare a variety of other estate planning and asset protection documentation to meet the needs of our clients.
AREAS OF ESTATE REPRESENTATION
Property Transfers at Death and Disability Planning
The two most basic aspects of the estate planning process are providing for the proper disposition of one’s property at death and planning for a disability. Our attorneys are highly knowledgeable and experienced in properly planning for both such eventualities.
TRANSFERS AT DEATH
The proper focus in providing for the disposition of property at death to beneficiaries of one’s estate or trust is doing so in the most efficient and cost-effective manner possible while not detracting from other very important estate planning goals, such as preserving family harmony (as further discussed below), minimizing taxes and administrative costs, maximizing governmental resource benefits such as Medicaid and Supplemental Security Income (SSI) for beneficiaries of their estates and trusts, and protecting property passing to the beneficiaries of one’s estate from the claims of their creditors and spousal claims in the event of a divorce or upon their subsequent death. In accomplishing our clients’ goals through well-drafted estate planning documents, our attorneys are highly knowledgeable in the use, limitations, and benefits and detriments of Wills as the primary document for passing property at death to family members or other beneficiaries, as well as the alternative probate avoidance techniques of using Revocable Trusts, joint tenancy ownership and beneficiary designations.
DISABILITY PLANNING
Although a disability can occur at any age, as the average age of our population has continued to rise, so has the frequency of disabilities. Our estate planning department advises our clients on properly and comprehensively planning for a disability which may leave them with insufficient mental capacity to manage their property or health needs. In the absence of a then existing estate plan which adequately addresses such circumstance, a judicial guardianship (about personal care) or conservatorship (management of assets) proceeding is likely to be required before any other person or entity (such as a bank or trust company), including a spouse, would possess the legal authority to act on such disabled person’s behalf in their personal care and financial matters. Such proceedings can be quite expensive, typically require an annual fee for posting an insurance bond with respect to the management of the disabled person’s property, are a matter of public record, can create considerable anxiety and divisions among family members in the judicial process required to appoint a guardian or conservator, and demand annual accountings and reports to the court regarding the appointed guardian’s and conservator’s exercise of their duties.
To avoid such undesirable and costly consequences, our attorneys assist clients in planning for such an eventuality through a revocable trust or Durable Power of Attorney for Financial Decisions, appointing a Trustee of the Revocable Trust and Financial Agent, respectively, to attend to property matters on the disabled person’s behalf, and a health care agent under a Durable Power of Attorney for Health Care to act on such disabled person’s behalf with respect to personal care decisions. When comprehensively drafted to cover the financial and personal circumstances which might arise with respect to such disabled persons, such instruments ensure persons or parties of our clients’ choosing are legally authorized and entrusted with the management of their property and proper health care needs in the event of their disability without having to resort to the courts to secure such authority or having their actions subject to on-going and costly judicial supervision.
Finally, we advise clients on provisions in Living Wills to incorporate their wishes should they wish to have no health care applied or medically assisted nutrition or hydration in the event they are unable to competently make that decision themselves and their health has deteriorated to where they have no quality of life from their particular perspective, e.g., terminally ill with no hope of improvement, a persistent vegetative state (PVS) or permanent coma, and even should they desire, a dementia or Alzheimer’s condition in which they consistently fail to recognize family or friends. Individuals in such conditions often desire to execute a Do Not Resuscitate (DNR) directive should they be in such a condition.
MINIMIZING FAMILY DISHARMONY IN THE PROCESS
Most families value family harmony as their most valuable “asset,” having a value far greater than all of their worldly goods. Consequently, clients normally do not want to incur any significant risk of damaging or destroying this “asset” in the estate planning process or in the passing of their property at death to the beneficiaries of their estate. Yet, in planning for property transfers at death and planning for a disability, there is little question but that most estate plans are devised in a manner that gives little to no significant thought to this issue, let alone providing a comprehensive plan to address it. Thus, most estate plans put family harmony at an acute risk of being lost following a death or disability of a family member, particularly with respect to a death or disability involving a parent or step-parent.
The estate plan of a parent which leaves a legacy of family disharmony for a surviving spouse or their children is not only likely to permanently destroy family relationships, it can result in high economic costs as well should such disharmony result in the incurring of significant attorney fees and administrative costs, as it typically does, in resolving contentious issues that develop in the administration of a spouse’s or parent’s estate. Although analytical studies on the degree of this risk are lacking, informal surveys and anecdotal accounts of estate planning attorneys (including those in our estate planning department) tend to indicate that estate plans which do not properly plan for such risk have between a one-third and seventy percent risk of creating significant family disharmony with respect to estates and trusts having at least one step-child or more than one child who are beneficiaries of the estate.
Our estate planning attorneys are aware of this issue and draft documents promoting considerations which promote family harmony. Our attorneys employ leading edge techniques and strategies which greatly reduce the risk of family disharmony in administering an estate or trust by an estimated two-thirds, and perhaps as much as ninety percent. Such techniques include: having mediation and arbitration provisions in estate planning documents; selecting the proper Executor or Trustee to manage their estate or trust that minimizes such risk; ensuring that there are proper provisions in Wills or Revocable Trusts to properly adjust the interests of beneficiaries for any property which might pass outside such provisions through joint tenancy and beneficiary designations; providing procedures for the distribution of tangible personal property items among children which minimize the risk of contentious disputes; allowing family members to change trustees of revocable trusts in certain circumstances; proper treatment of lifetime loans to beneficiaries; providing disincentives for any specious challenges by beneficiaries to the provisions of wills and trusts; and counseling clients to advise other family members of their estate planning provisions only when there are compelling reasons or beneficial purposes in doing so.
INCOME TAX ESTATE PLANNING
Although only a very small minority of estates are currently subject to gift and estate taxation, following death all estates and Revocable Trusts are subject to federal and state income taxation. Yet the vast majority of estate plans fail to properly plan to minimize its impact. This can result in a very large amount of federal and state income taxes being unnecessarily paid following death in the administration of estates and Revocable Trusts, by trusts and trust beneficiaries individuals create under the provisions of their Wills and Revocable Trusts for the beneficiaries of their estates, and by the beneficiaries themselves when they sell property left to them outright. The net effect of such failure is to frequently reduce by a substantial amount the amount of after-tax property passing to the beneficiaries of trusts and estates.
Consequently, a major emphasis of our estate planning attorneys is the minimization of such income tax liability. As an example, we advise married clients of lifetime division of ownership techniques and incorporating sophisticated estate planning provisions in Revocable Trusts which have the capability of significantly reducing the amount of “built-in” capital gain in stocks, real estate and other investments passing to the beneficiaries of their estate upon their death. We also advise clients in the structuring of trusts in which they pass property to the beneficiaries of their estate as to provisions which can minimize the income taxation of the trust and its beneficiaries. As a further example, we advise fiduciaries of estates and trusts as to administrative techniques, including the timing of the payment of expenses and distributions, which can significantly reduce their income taxation. A final example is planning for distributions from qualified retirement plans and IRAs, which due to their complexity and substantial income tax impact on clients and the beneficiaries of their estates, is discussed as a separate category below.
PLANNING FOR QUALIFIED RETIREMENT PLANS AND IRAS
A very large proportion of the population have a substantial number of assets in QRPs and IRAs. In many instances, such assets constitute their largest investment. Because in most situations the distributions from such assets constitute taxable income, minimizing such taxation is normally an overarching estate planning goal. Estate planning for such assets requires a very high level of knowledge, skill and experience with respect to guiding clients through the maze of statutory and regulatory distribution rules governing distributions therefrom, as well as employing strategies and making appropriate elections which minimize required distributions from QRPs and IRAs both during the client’s lifetime and following death. Our estate planning lawyers are very knowledge in this highly technical and specialized area in not only maximizing the substantial income tax benefits of minimizing such required distributions and the proper “tax timing” of permissible withdrawals, but also in utilizing such tax-deferral techniques of spousal “roll overs” and “roll overs” from IRAs to QRPs, converting regular taxable IRAs to non-taxable Roth IRAs, and leaving assets in QRPs and IRAs in trust for family members in a manner which does not jeopardize the ability of the Trustees of such trusts to “stretch out” required distributions from such assets over the life expectancy of the beneficiaries of estates or trusts.
ASSET/SPOUSAL CLAIM PROTECTION PLANNING
We unquestionably live in an increasingly litigious society that exposes a person’s assets to the claims of creditors, spouses, tort plaintiffs, and the claims of governmental entities such as state and federal taxing authorities. Our attorneys assist clients in protecting their assets from the claims of creditors and spouses through a variety of estate planning techniques. With respect to protecting their assets from the claims of their spouses, we advise clients with respect to both pre-marital and post-marital agreements to protect against a spousal claim upon a divorce or other dissolution of marriage from a claim for alimony or division of marital property, as well as an inheritance claim following death.
Our estate planning attorneys have a high level of expertise in counseling clients on how they can protect their assets from the claims of their creditors during their lifetime and from spousal and third party claims of beneficiaries with respect to the recipients of the assets they leave the beneficiaries of their estate following their death. During lifetime, such asset protection techniques include advising clients as to assets which are exempt from the claims of creditors, changing ownership of assets between spouses to minimize the amount of assets held by the spouse most vulnerable to creditor claims, using limited liability companies (LLCs) for asset protection, purchasing “umbrella policies” for liability protection, transferring assets by both spouses to irrevocable trusts for each other, and the advantages of out of state and out of the country irrevocable trusts for asset protection. Regarding asset protection against creditor claims against their estates following death, our attorneys have extensive experience in the use of probate avoidance techniques coupled with irrevocable trusts to provide asset protection against claims of a creditor against the estates of our clients while achieving all other estate planning goals. We have substantial expertise in the benefits of leaving property in trust for beneficiaries to provide asset protection from the claims of their creditors and spouses for the remainder of their lives without substantively reducing the amount of desired control such beneficiaries have over the trust estate.
SECOND MARRIAGE PLANNING
A fundamental demographic of our society is the increasing percentage of married persons who have children from prior marriages or relationships. This aspect injects a layer of complexity not found in other estate planning contexts that has a highly-increased risk of family disharmony and disputes as to the disposition of property and parental care following a disability or death of either parent, and most markedly, following the death of the surviving parent.
Without proper planning, in a high percentage of such situations, such resultant disharmony can not only create family disputes and confrontations which are economically costly, it can also irrevocably damage family relationships among children from both sides of the family, as well as between a step-parent and step-children. This is one of the most litigious of the estate planning scenarios. In addition to pre-marital and post-marital agreements defining and limiting spousal property rights in the event of a divorce or inheritance rights as a surviving spouse, our estate planning attorneys also utilize advanced family harmony techniques in conjunction with advanced estate planning strategies to ensure that the property of both spouses or relationship partners adequately provides for the survivor, passes at their death to their children at their deaths in the manner they desire, all the while achieving their other estate planning goals and not damaging family harmony in the process.
FAMILY FARM AND BUSINESS SUCCESSION PLANNING
There is hardly any estate planning task that is more emotion-laden and complex than succession planning in the passing of family farms and other businesses to family members both during lifetime and at death. It involves the use of extensive and creative estate planning and business planning techniques that ensure continuity of the business enterprise in a manner that is efficient, preclude unwanted individuals or parties from participating in the farm or business decisions, and achieve other estate planning goals and maintain family harmony in the process. Our attorneys are quite knowledgeable and highly experienced in this area. Frequently, entities such as limited liability companies, buy/sell agreements, and mediation and arbitration provisions are essential components of this process.
To learn more about our firm, staff or practice areas, contact us today by calling (305) 888-8896. We look forward to the opportunity to assist you with all your legal and estate planning needs.