EIGHT STEPS TO A PROPER FLORIDA TRUST AND ESTATE PLAN Explaining Wills, Trusts, Tax, and Creditor Protection in a Logical, Easy-to-Understand Order for Estate Planning Professionals and Their Clients Alan S. Gassman, J.D., LL.M. Copyright © 2020 Haddon Hall Publishing. All rights reserved. No part of this book may be used or reproduced in any manner whatsoever without written permission of the author. Printed in the United States of America. ISBN 13: 978-1502906854 DISCLAIMER OF WARRANTY AND LIMIT OF LIABILITY The author and publisher make no representations or warranties with respect to the accuracy of the contents of this work and do hereby specifically and expressly disclaim all warranties, including without limitation, warranties of title, merchantability, fitness for a particular purpose and non-infringement. 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TABLE OF CONTENTS Introduction ...............................................................................................................................7 How to Use This Book ..................................................................................................7 A Note on Specialist Lawyers .....................................................................................8 Chapter 1 - Pulling Your Information Together .................................................................11 Sample Planning Schematic .......................................................................................12 Confidential Estate Planning Information Form ....................................................14 Agenda for Conference with Attorney ....................................................................29 Follow-Up Questionnaire for Client Meetings .......................................................31 Chapter 2 - Make Sure You Have Adequate Life Insurance .............................................33 Physical Examination Requirements ........................................................................35 ii Term Life Insurance ....................................................................................................35 Permanent Life Insurance Policies ............................................................................36 Using Life Insurance as an Assured Inheritance Funding Vehicle ......................37 Annuity Contracts .......................................................................................................37 Term Life Insurance Information and Sample Rates ..............................................38 Chapter 3 - Title Your Assets Properly and Do Not Forget Beneficiary Designations ....................................................................................................41 Beneficiary Designations ............................................................................................43 Chapter 4 - Include Creditor Protection Planning .............................................................47 Liability Insurance Considerations ...........................................................................53 Understanding Your Liability Insurance Coverage Chart.....................................56 Corporate Firewall Protection, Using Corporations and Other Entities to Provide Liability Protection ......................................................................................60 The Manager or Officers May Still be Sued .............................................................61 Vehicle Liability ...........................................................................................................61 Using LLCs and Other Entities to Avoid Liability and for Business Structuring .....................................................................................62 A Florida Physician’s Guide to Protection of Wages and Wage Accounts ....................................................................................................63 The 10 Most Common Mistakes Estate Planners Make with Respect to Asset Protection ....................................................................67 Chapter 5 - Inheritance Planning ..........................................................................................77 Should You Trust a Trust? .........................................................................................77 Avoiding Probate by Using Revocable Living Trusts............................................78 Selecting Revocable Trust Systems for Clients .......................................................80 It’s Just a JEST, The Joint Exempt Step-Up Trust ...................................................88 Special Clauses for Trust Agreements ...................................................................102 Chapter 6 - Selecting Trustees, Guardians, Personal Representatives and Other Fiduciaries .......................................................................................................105 Trustees .......................................................................................................................105 Personal Representatives ..........................................................................................105 Guardians ...................................................................................................................108 Agent Under Durable Power of Attorney .............................................................108 iii Surrogates or Health Care Agents Under Health Care Powers of Attorney ....109 Child Care Power of Attorney .................................................................................110 Division of Duties and Entities ................................................................................113 Trust Protectors ..........................................................................................................113 Tiebreakers .................................................................................................................113 Common Examples ...................................................................................................113 Decision Chart for Client Meeting ..........................................................................118 Chapter 7 - Federal Estate Tax Planning.............................................................................121 General Overview .....................................................................................................121 Nuts and Bolts of the Federal Gift and Estate Taxes ............................................122 Bypass Trusts (also known as Credit Shelter Trusts and/or “B Trusts”) ..........125 Life Insurance Trusts ................................................................................................125 Terminology ...............................................................................................................126 An Executive Summary of Defective Grantor Trusts ..........................................129 Can the Grantor Be a Beneficiary of a Trust That Avoids Federal Estate Tax? ....................................................................................................134 Can a Spouse be a Beneficiary of an Irrevocable Trust? ......................................135 7 Suggestions for the Design of a SAFE Trust .......................................................135 Annual Gifting ...........................................................................................................138 Gifting to an Irrevocable Trust and What the Heck is a Crummey Trust? ................................................................................................139 Discounts ....................................................................................................................141 Installment Sales for Low-Interest Notes ..............................................................142