|
Getting your Trinity Audio player ready...
|
Wills and Trusts are the documents that disburse your assets after you die. The intricacies of each are dull reading, hence this simple explanation of what can be a highly complex process.
When you create a trust, you pay upfront, and it’s expensive. The more complicated it is, the more it costs. The creator of the trust is usually the grantor and trustee. When the grantor-trustee dies, the successor trustee takes over and disburses the assets per the instructions of the Trust. A trust does not go through probate (the Courts), and everything remains private. If you have a trust, no creditors can collect debts unless they are specifically mentioned.
All your assets (house, bank accounts, stocks, etc.) MUST be titled in the name of the Trust. If an asset is not named in the trust, it goes through probate. If the entire trust is unfunded, it is treated as a will and goes through probate.
A Will is less expensive up front, but the same amount will be used to hire lawyers for the probate process. Again, the more complicated the Will, the more complicated the process.
The money is spent AFTER death, and some think, “What do I care? I’ll be dead.” The Will is a public document ergo, anyone can see the worth of your estate. Wills are easier to challenge in court because the law is settled. If you have a Will, creditors can file for payment in the Probate Court and are first in line for payment.
The wealthier you are, the more you need an estate plan – often including insurance to cover the estate taxes. Joe Robbie, the owner of the Miami Dolphins and the Joe Robbie Stadium, was a real estate attorney who, upon his death, left everything to his wife Elizabeth through an intervivos trust. This allowed her to receive income for the rest of her life. Upon her death, the assets would be distributed to the named beneficiaries.
Mr. Robbie’s most significant assets were the football team and the stadium. At his death (1990), nine of his eleven children were alive. Three were trustees of the trust, and one, Mike, worked for the Dolphins. The trustees immediately fired Mike and sold 15% of the team. This infuriated their mother, who demanded her elective share. (An elective share allows a married spouse to claim 30% of the other spouse’s estate after his/her death). She rewrote her trust, disinheriting the three trustee-children.
The chink in this scenario was that the trust was set up to defer taxes until the mother’s death. If she were given her ‘share,’ estate taxes would be due, which meant selling a portion of the team and stadium. Mom didn’t care, and the legal fight began. It ended in the Florida Supreme Court after Mrs. Robbie had died, but ruled in Mrs. Robbie’s favor. The Joe Robbie estate owed $47 million in taxes, which triggered the sale of the team and the stadium. Her estate received her elective share, which was distributed to her six beneficiaries. The nine living children shared the money from the sale, and the football team belonged to someone else. The family is still not on speaking terms.
This could have been avoided with a different estate planning strategy that included more complicated trust structures and some life insurance. Had that happened, the “Joe Robbie Stadium”, and his legacy would be intact, and the family would be speaking. The postscript to this story is that Joe Robbie was a lawyer – what’s that axiom? “An attorney who represents himself has a fool for a client.”
ABOUT US:
For more Miami community news, look no further than Miami Community Newspapers. This Miami online group of newspapers covers a variety of topics about the local community and beyond. Miami’s Community Newspapers offers daily news, online resources, podcasts and other multimedia content to keep readers informed. With topics ranging from local news to community events, Miami’s Community Newspapers is the ideal source for staying up to date with the latest news and happenings in the area.
This family-owned media company publishes more than a dozen neighborhood publications, magazines, special sections on their websites, newsletters, as well as distributing them in print throughout Miami Dade County from Aventura, Sunny Isles Beach, Miami Beach, Coral Gables, Brickell, Coconut Grove, Pinecrest, South Miami, Kendall, Palmetto Bay, Cutler Bay and Homestead. Each online publication and print editions provide comprehensive coverage of local news, events, business updates, lifestyle features, and local initiatives within its respective community.
Additionally, the newspaper has exclusive Miami community podcasts, providing listeners with an in-depth look into Miami’s culture. Whether you’re looking for local Miami news, or podcasts, Miami’s Community Newspapers has you covered. For more information, be sure to check out: https://communitynewspapers.com.
If you have any questions, feel free to email Michael@communitynewspapers.com or Grant@communitynewspapers.com.
