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  • Writer's pictureJames Spicuzza

What is Estate Planning and Why You Need To Do It.

James Spicuzza | Trust Group Financial | Estate Planning

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 is everything else. Bank accounts, stocks, bonds, mutual funds, household items and cars. 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 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. Because of the nature of the industry, in many 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. In the "Joint Owners" post, 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. One myth to dispel at the outset is the fact most people think, or are lead to believe, that a Will avoids Probate Court and is the simplest way to pass assets upon 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 a Last Will and Testament, it's because they owned their assets as Joint Tenants. The adult children heirs of seniors 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 upon 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 Revocable Trust, a business Buy-Sell Agreement, an Annuity Contract, 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 intestate, 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) By Contract (Revocable Trust), directly to the named beneficiaries, avoids the Probate Court System.

Remember the primary benefit of an estate plan which includes a revocable trust is to shelter assets passing through the trust from probate proceedings. Thus, use of a revocable trust avoids unnecessary cost, delay and publicity. It also facilitates administration of assets in the event you become incapacitated. It is also an ideal vehicle to holding title to real estate outside your home state.

Okay, so now that you have a basic under standing of estate planning and why you need to do it. Schedule a free consultation to begin the process of creating your unique estate plan.


James Spicuzza may be reached at 727.939.9465 or by e-mail.

Learn more about James Spicuzza.


The Trust Group does not practice law. The Trust Group has special 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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