Legal Planning

Will - A will is a legal document that determines what happens to your property after your death. A will states who receives property and in what amounts. Property distributed under the terms of the will become the "probate" estate. Making a will is a responsibility, as well as a right that is protected by law.

In addition to distributing or transferring property, a will may have other functions. It may be used to name a guardian for any minor children or to create a trust and designate a trustee to handle an estate (property left after death) on behalf of children or others. A will may also be used to name a personal representative or "executor" to handle a decedent's (the person who died) property and affairs from the time of death until an estate is settled.

Health Care Surrogate - "Designation of Health Care Surrogate" names a surrogate who can make health care decisions for you if and when you are unable to make those decisions. Your surrogate can only make those decisions when you are in a nursing home, hospital, or under hospice care.

Durable Power of Attorney - A Durable Power of Attorney is a written instrument that allows an individual, the "Principal," to designate someone else as his or her "attorney-in-fact," to act on the Principal's behalf. This Power will survive subsequent disability or incapacity of the Principal. This document is extremely powerful and important in Florida. It, in many instances, replaces a guardianship. This document is useful, as it may allow, if properly drafted, someone else to establish a Qualified Income Trust, pay taxes, handle the actual Application, Gift to others, and many more planning opportunities.

Living Wills - The Florida Legislature has recognized that every competent adult has the fundamental right of self-determination regarding decisions pertaining to his or her own health, including the right to choose or refuse medical treatment or procedures which would only prolong life when a terminal condition exists. This right however is subject to certain interests of society, such as the protection of human life and the preservation of ethical standards in the medical profession. To insure that this right is not lost or diminished by virtue of later physical or mental incapacity, the legislature allows a person to plan for incapacity, and if desired, to designate another person to act on their behalf and make necessary medical decisions upon such incapacity.

Living Trusts - A living trust, created while you're alive, lets you control the distribution of your estate. You transfer ownership of your property and your assets into the trust. You can serve as the trustee or you can select a person or an institution to be the trustee. If you're the trustee, you will have to name a successor trustee to distribute the assets at your death.

What are the advantages of a living trust? Properly drafted and executed, it can avoid probate because the trust owns the assets, not the deceased. Only property in the deceased's name must go through probate. Incorporating a Business

Incorporating a business may be done through various entities such as a Sub Chapter S Corporation, or a Limited Liability Company. Why should a business incorporate?

Protection of personal assets. Safeguarding personal assets against the claims of creditors and lawsuits. Sole proprietors and general partners in a partnership are personally and jointly responsible for all the liabilities of a business such as loans, accounts payable and legal judgments. In a corporation, however, stockholders, directors and officers typically are not liable for their company's debts and obligations. They are limited in liability to the amount they have invested in the corporation (e.g.: If $100 in stock was purchased, no more than $100 can be lost). Corporations and Limited Liability Companies (LLCs) may hold personal assets like houses, cars or boats. If one is personally involved in a lawsuit or bankruptcy, these assets may be protected. A creditor of the owner of a corporation or LLC cannot seize the assets of the company; however, they can seize their ownership shares in the corporation, as that is considered a personal asset.

Transferable ownership. Ownership in a corporation or Limited Liability Company is easily transferable to others, either in whole or in part. Some states' laws are particularly attractive to this end.

Retirement funds. Retirement funds and qualified retirement plans, such as a 401(k), may be established more easily.

Key man insurance is life insurance purchased by the company on the life of an owner, employee or employees whose loss would have adverse effects on the company.

Insuring against the loss or short-term incapacity of key employees is a cost effective means of protecting your business.

Running a successful business you know only too well that company performance can be significantly influenced by the important contributions of a small number of "key" individuals. These "key" contributors could include your fellow directors or business partners as well as members of your staff. The unexpected death or long-term illness of any of these people could ultimately threaten your company's profits or, even worse, put at risk the long term future of your business. A family business should have a buy-sell agreement in place that specifies terms of ownership and price of transferred shares between family members in the event one of them retires, leaves the business, becomes disabled or dies. Of course, the lower the specified share price, the lower the estate and gift tax value of the shares. The specific mechanism for setting the price of the shares in the agreement has been a subject of controversy for many decades.

Regardless of your method of planning, you have worked too hard to build up your business to have it lose value or fall apart when you can no longer run the business. There are too many business owners that simply fail to do any business succession planning and ultimately give the U.S. Government more in taxes. The time is now to think about tomorrow.