Estate Planning: Why You Need a Will Now

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Matt Dolman:

Welcome to the fourth edition of the Dolman Law Group Podcast. I'm here with my guest, Gian-Franco Melendez, an attorney out of Tampa. Gian, say hello to our audience.

Gian-Franco Melendez:

How are you doing, everybody?

Matt Dolman:

So one of Gian's practice areas is estate planning. Today, we're going to discuss wills and the importance of such. Gian, in your experience handling wills and estate planning, what is the proper time to get a will?

Gian-Franco Melendez:

Yesterday.

Matt Dolman:

Because I know that you know the common misconception, is wills are done when you reach a certain age. Maybe you get past the age of 45, 50, you're financially stable, that might seem like the right time to get a will. Most millennials or individuals of my generation, the generation X, or I don't know what I'm considered. But those of my generation think you got to get a little bit older, have some financial stability, have enough money in the account, have some children. And then maybe you consider getting a will. Is that improper? Or is that proper line of thought?

Gian-Franco Melendez:

I can totally understand that line of thinking. And before I learned everything that I've learned in my years practicing, I thought the same thing. But there are so many instances where a will could save your family so much grief and headaches, that not doing one after the age 25 surely would be a mistake, in my opinion.

Matt Dolman:

Well, what happens if you die without a will?

Gian-Franco Melendez:

Well, then your property goes into what is called an intestate probate and the Florida statutes sort of dictate where your property goes. So if you're married, it goes to your wife. If you're not married but you have children, it goes to your children. If you're not married and you don't have any children, it goes to your parents, and it kind of goes down in a succession of your family members.

Matt Dolman:

So it's a pecking order, if you will.

Gian-Franco Melendez:

Exactly. And everybody's family dynamic is a little different and maybe you don't want whatever you do have to go to a certain person. If you don't have a will, you have no choice in the matter.

Matt Dolman:

So the danger is without a will, it doesn't follow your intention of what you want to do. It is dictated by the courts, dictated by Florida statute.

Gian-Franco Melendez:

Exactly.

Matt Dolman:

Okay. Do you need more than just a will and last testament?

Gian-Franco Melendez:

Definitely.

Matt Dolman:

So I'm often asked by consumers and friends and those who are approaching my practice, I don't handle estate planning. Do I need more than just a last will and testament? What do I do if I get into a situation where a healthcare decision needs to be made and I lack the capacity to handle such? Or perhaps, I have financial decisions that need to be addressed, my monthly bills for instance, or long-term financial decisions and I don't have the capacity to make such decisions for myself? What do I do?

Gian-Franco Melendez:

I absolutely think that is important to not just have a will, but to also have other documents that can address those situations. There's a healthcare surrogate designation that basically, you elect a certain individual that you trust to be able to make those decisions for you if you are incapacitated due to accident or injury. There is also a living will, which is commonly known as an do not resuscitate order or a DNR. Basically, that is a valid legal document that dictates your wills in case you have a terminal illness or injury or you're in a vegetative state. And to put that into terms that anyone could understand, if you're from Florida and you have a remembrance of the last 10 years, the Terri Schiavo case.

Matt Dolman:

Sure.

Gian-Franco Melendez:

It's not just beneficial for you to have your wishes known and have somebody who can make those decisions, it's a huge relief for your family. Like in the Terri Schiavo case, the family was fighting to determine what happened with this individual. And if she had had a healthcare surrogate designation and a living will, this wouldn't have been an issue because it would've already been decided. And so just to make sure that your desires are fulfilled and that you save your family headache, because your family's already go going through one of the worst times in their lives when you-

Matt Dolman:

sure it's emotional, I'm sure there's going to be squabbles among family members as to what they want to occur, rather than what did the individual really intend to occur.

Gian-Franco Melendez:

Absolutely. And not only are they going through a hard time, they might not be making the most rational decisions at that moment. And for you to have the ability to dictate that for them and have your wishes just known in a legal document, just makes it so much easier for them.

Matt Dolman:

When does an actual healthcare surrogate kick in? So it has to be a terminal illness?

Gian-Franco Melendez:

So you can actually have your healthcare surrogate designation drafted in such a way, that it can kick in when you are deemed incapacitated by a doctor or it can kick in as soon as that document is signed and notarized. So if you keep it so that a doctor has to deem you incapacitated, you run the risk of having to wait for a doctor to say, give a medical opinion that you are incapacitated. Or you can have the document just kick in as soon as it is signed, so you don't have to wait for that.

Matt Dolman:

And that wait could take an indefinite period of time, it could take days while the decision needs to be made.

Gian-Franco Melendez:

Exactly.

Matt Dolman:

Okay. And how about not the healthcare surrogate per se, but when you have a durable power of attorney, explain to me when does it kick in and how much does it cover? What is the context of a durable power of attorney? Does it cover just certain instances? Does it cover certain financial decisions? Or how durable is the durable power of attorney?

Gian-Franco Melendez:

So a durable power of attorney, is as general or as specific and it kicks in when you want it to, based on how you draft it. This is definitely not something that is easy to do. So getting the opinion and expertise of an experienced estate planning attorney is crucial with something like a durable power of attorney, because it can cover every possible thing that you might currently or potentially own. Or just specific things. If you want somebody to handle your real estate in another state or when you're on vacation, you can have a durable power of attorney that's just for that. Or you can have it for everything that you have, your real estate, your investments, your legal interests in a lawsuit that you might be involved in.

Matt Dolman:

Business decisions?

Gian-Franco Melendez:

Business decisions, everything.

Matt Dolman:

Okay. So it can run the whole gamut of your life?

Gian-Franco Melendez:

Absolutely.

Matt Dolman:

Now, going back a minute, we discussed the last will and testament. What can be done for children?

Gian-Franco Melendez:

So, that is hugely important. Especially with minor children, I always recommend having a will with a trust included. So in the will, you can designate who will be the guardian of your children if something happens to you. And you can split that up into two people, one person being in charge of the finances and another person being in charge of raising and making life decisions for the children, in case you don't have one person that you trust with doing both of those things adequately.

Matt Dolman:

Okay.

Gian-Franco Melendez:

And then along with that, if your children are like eight or nine and you have a $3 million estate, you don't want to leave a nine year old $3 million, obviously.

Matt Dolman:

Of course.

Gian-Franco Melendez:

So you can set up a trust and designate a trustee, who will manage whatever assets you have in your estate for your children until they reach a certain age. Some people pick 21, some people pick 25, you can sort of structure it however you think is best. But it gives you a little bit of peace of mind knowing that someone is going to make responsible decisions for your children, if something happens to you while they're still very young.

Matt Dolman:

Okay. Now, going back a minute, we discussed a misconception that's commonly found among individuals from the 25 to 44 bracket, if you will. Who feel that you haven't reached a point in life where you need to get a will. What happens if you get a will, you're 25 30, and your financial situation changes over the next five, 10 years? Your marital situation changes, family obviously, the dynamic changes, you have children. So your whole life now, is completely different than when you actually made the will. What can be done?

Gian-Franco Melendez:

So before that, you can structure a will in a more of a general sense when you aren't sure what you're going to have so that it'll address any sort of assets or income that you get in the future. But if your circumstance changes like you have children, such that you really want to make sure that your will expresses exactly what you want in terms of your new life circumstance. Then, wills can easily be amended with a codicil, which any experienced estate planning attorney can do for you. Or you can just draft a new will. Either of those options are relatively not complicated to come by and-

Matt Dolman:

Is there a situation where you recommend a codicil over a completely new will or vice versa?

Gian-Franco Melendez:

If you're just making a small change, maybe you just want to designate a different person as the personal representative of your estate, codicil would be just fine. If a lot of different circumstances have changed, you've inherited a bunch of property and you have different people that you want to allocate all this property to and assets that you want going to different locations if you pass away, then a new will is probably the way to go.

Matt Dolman:

Makes sense. Is there a specific amount of financial assets or liquidity one has to have in order to construct a will?

Gian-Franco Melendez:

You don't even have to have a penny to do a will. Especially if you have children. Because as I was saying before, in a will, you can designate who is going to take care of your children if something happened to you.

Matt Dolman:

Which clearly, it's-

Gian-Franco Melendez:

Yeah, you don't need to have money to have kids.

Matt Dolman:

No, you don't have to have money to have kids, which is a scary thought proposition of itself-

Gian-Franco Melendez:

Yeah, absolutely.

Matt Dolman:

So you don't have to have a specific amount of money, you don't have to be of a specific age, a will is something you suggest that we all get once we obviously graduate high school, college we're of the age of majority. It's time to go get a will to take care of our future.

Gian-Franco Melendez:

Absolutely.

Matt Dolman:

Okay. So I'm often asked, "Can I draft a will myself and what are the dangers of such?" And I know that there's always kits that you can buy online, there's like legalzoom.com and different tools and mechanisms that you can draft it yourself. What is the danger? And I can explain the danger of many of these areas of law, but when it comes specific to estate planning, what is the danger of either drafting your own will or using one of these kits online, these all-in-one cookie cutter services?

Gian-Franco Melendez:

So there's two things that I have to say about that. I have hands and my eyes work, theoretically, I could try to perform brain surgery. But I'm not a trained doctor. Probably wouldn't be a good idea.

Matt Dolman:

No, wouldn't work out well.

Gian-Franco Melendez:

I know that's an extreme example, but I find that to be pretty analogous to drafting a will on your own. With these websites, you're kind of getting what you get. The estate planning in probate law varies state by state. So you don't know if the form that you're getting online is necessarily valid or up-to-date with your state's current law. And on top of that, an experienced estate planning attorney will be able to come up with many more situations than you could even imagine. I get this all the time when I'm speaking with clients, when they're trying to figure out who's going to take care of their kids, who's going to manage their assets if they pass away.

Gian-Franco Melendez:

And take, for example, somebody who's in their second marriage and they have kids from a prior marriage. And so I ask them, "Who do you want to take care of your children if something happens to you?" They say, "Oh. Well, my ex spouse." And then I have to say, "Well, what happens if they predecease you or the? die before you?" He was like, "Oh, well I guess my current wife." Then, I have to ask, "What if you and your current wife pass away in the same tragic accident and your ex-spouse is pre-deceased?" And they're like, "Oh, I didn't even think about that." But an experienced estate planning attorney will, and they'll be able to make sure that you have an answer for that question in writing in your will, so that your kids are protected.

Matt Dolman:

So when you die with a will, how does that work out? Does the probate court get involved? What's the next step? You die with the will, your intentions are clearly expressed or outlined. What happens next? How does it get effectuated? That's what, I guess I'm asking.

Gian-Franco Melendez:

Having a will does not preclude you or prevent your estate from having to go to probate court. But in a general sense, the probate court is supposed to follow your will. Obviously, there are circumstances where it might not, if one of the requirements in your will for someone to get something is illegal, a court's not going to enforce that. Or if somebody contests the will, it might hold things up. But a valid will pretty much dictates what will happen in probate court in most cases.

Matt Dolman:

Is there scenarios where it wouldn't?

Gian-Franco Melendez:

If you used one of those online wills and it's not valid, court is not going to hold that as law.

Matt Dolman:

Which, again, is a danger because state by state, the laws change and that's usually an all-in-one cookie cutter solution.

Gian-Franco Melendez:

Exactly. You can't hand write a will. That is not valid in any way, shape, or form in the state of Florida.

Matt Dolman:

Okay. And most people don't realize that.

Gian-Franco Melendez:

And most people don't. And a will has to be witnessed by two individuals. And if you don't do that, it's not valid.

Matt Dolman:

And I hear a lot about, "What is a revocable trust and what's the purpose of such?" What's the benefit of revocable trust versus a will? When would you use a revocable trust?

Gian-Franco Melendez:

So a revocable trust is in a way, a legal entity in and of itself, kind of like a corporation. You can put real estate property interests, or investments, assets into that trust and technically, it's no longer yours. So it would not go through probate. I generally recommend this as a potential option for people with several multiple properties.

Matt Dolman:

Okay.

Gian-Franco Melendez:

Especially if one or more are out of state, it sort of simplifies things in case of death. So, that kind of removes them from probate and it makes things a little simpler in that sense. It's not right for everyone. For example, I would never recommend somebody putting the home that they live in a trust. You lose your homestead tax exemption, you lose homestead rights in probate and it makes things a little more complicated once things go into probate. But a revocable trust is one way to remove certain assets, outside of having to be dealt with in probate once you die.

Matt Dolman:

Is there other mechanisms that avoid probate, such as like plans or 401Ks?

Gian-Franco Melendez:

So there's trust, like I just spoke of. You can have joint ownership of bank accounts or real estate property. So normally, if you have a bank account and it's just you, if you die, whatever money is in there has to go through probate. If you and one other person own it in equal parts with a payment on death provision, then if you die, that account just basically reverts to that other person. Same with real estate. If you buy something in title with your spouse in Florida, that's known as tendency by the entirety. And if you pass away, that property automatically goes to your spouse. You don't have to be married to somebody to set up your real estate property in that way. You can deed a property in your name and somebody else's name with what is called, right of survivorship. And it's kind of the same thing as tendency by the entirety. If you pass away, that property automatically goes to that other individual.

Matt Dolman:

Fair enough. Explain some of the other areas of practice that you handle.

Gian-Franco Melendez:

I also handle a wide range of real estate matters when it comes to purchases and sales of property, landlord, tenant issues, zoning, eminent domain, commission disputes. And I also handle business issues, such as incorporating and starting a business, dealing with contract disputes, employment contracts, and I also handle family and business immigration.

Matt Dolman:

How do they get ahold of you? If my clients want to seek out your services, Mr. Melendez, what do they do?

Gian-Franco Melendez:

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Matt Dolman:

Well, that's Gian-Franco Melendez from the law office of Gian-Franco Melendez. And I'm Matt Dolman from Dolman Law Group. And that wraps up our fourth episode of the Dolman Law Group podcast. Thank you for listening and take care, have a blessed day.

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