Estate Planning & Fixed Annuity Forum

James Spicuzza


 

Estate Planning...

Trust vs Will?


Gary D. Spicuzza, Primary Agent

about this site

It is recommended that all 5 pages of this site be read.

This site is for informational purposes regarding Estate Planning, Fixed Annuities and the benefits of a Revocable Trust versus the problems and costs of a Last Will and Testament, including the Probate Court System in general and the state of Florida, in particular.


First let's define an Estate and Estate Planning.

An Estate is the total property, real and personal, owned by an individual prior to distribution because of death through a Trust or Will. Real property is real estate and personal property includes everything else, for example, bank accounts, stocks, bonds, mutual funds, household items and cars are personal property. 

Estate Planning is the process by which an individual or family arranges the transfer of assets in anticipation of death. An estate plan aims to preserve the maximum amount of wealth possible for the intended beneficiaries and flexibility for the individual prior to death.

Trusts and wills coupled with Fixed Annuities are common ways in which individuals transfer their wealth to their children. Trusts, unlike wills, have the benefit of avoiding probate court, a lengthy and costly legal process that oversees the transfer of assets.

Who does Estate Planning?

It can involve the counsel of professional advisors who are familiar with your goals and concerns, your assets and how they are owned, and your family structure.  This includes the services of a variety of professionals, including a lawyer, accountant, financial planner, insurance advisor, banker and broker.

In almost all cases it is an Insurance Agent who first educates clients in these matters, coordinates with an attorney for document preparation and advises the client on the wealth protection and transfer products available for their needs. 


On the "Joint Owners" page, we discuss the financial dilemmas that can arise from jointly owning your home, real property, bank accounts, stocks, bonds, mutual funds and anything else of value with your adult children.


Finally, the Power of Fixed Annuities. Perhaps the most misunderstood financial instrument of all time. There isn't a better wealth protection and transfer investment vehicle than a Fixed Annuity. Please note emphasis on the word FIXED  preceding the word annuity.


One myth to dispel at the outset is the fact that most people think, or are lead to believe, that a Will avoids Probate Court and is the simplest way to pass assets at death.

Just the opposite is true, a Last Will and Testament guarantees your beneficiaries an expensive, lengthy and complicated trip through the Probate Court System when the Individual or when the "2nd" spouse dies. Generally between married couples there aren't any Probate Court problems when the first spouse dies. That's NOT because they had Last Will and Testaments, it's because they owned their assets as Joint Tenants.

The adult children heirs of elderly individuals often get caught in the "Probate Court System" because Mom or Dad failed to realize and understand when their spouse died they no longer owned their assets as Joint Owners. They now own the assets as an Individual Sole Owner and that form of ownership always triggers Probate Court at death.

Skeptical, regarding the above myth? Please look up the word "probate" in your dictionary.

Some very basic concepts to understand is the fact there are only three ways to transfer your assets upon death.

1) by Will, (has to go through Probate Court.)

2) by Contract, (i.e., a RevocableTrust, a business Buy-Sell Agreement, an Annuity Contract, a Life Insurance Policy, are all examples of "contracts" that DO NOT go through Probate Court. The proceeds of these contracts are paid directly to the named beneficiaries of the contract.

 3) by Operation of Law, i.e., Joint Ownership or having no Will.

Additionally one must understand there are only four (4) ways to own any type of property. Everything you've ever owned in your life has been owned and held in one of four ways.

a) Sole Ownership,

b) Joint Ownership,

c) Corporate Ownership or

d) a Trust.

When you die your assets will be transferred to your heirs and beneficiaries by only one of three methods:

1) No will, according to state law, through the Probate Court System.

2) With a will, through the Probate Court System.

3) Revocable Trust, directly to named beneficiaries, avoids Probate Court.



Gary D. Spicuzza is the Insurance Agent-in-Charge of The Trust Group.

Office Location:

The Holiday Tower, 2435 U.S. 19, Suite 125, Holiday, FL 34691

 

Office Telephone: 727-945-8599

E-mail: cic7@juno.com

 

Disclaimer: The Trust Group does not practice law. The Trust Group has relationships with properly licensed Florida attorneys. Any legal documents to be prepared or modified is done solely by attorneys properly licensed in the state of Florida.


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