Tag Archives: senior finances

What is Probate?

estate planning

By Attorney Truman Scarborough

This is the second in a series of articles on probate. In the last article, we looked at the initial court procedures for formal probate which is required when the decedent died within the last two years and the value of the assets is over $75,000. This article continues the discussion by looking at the Personal Representative’s (executor’s) responsibilities.

When someone dies, assets titled just in the decedent’s name without beneficiaries are frozen. The legal procedure used to transfer property from the decedent to the beneficiaries is called “Probate”. The court creates a legal entity (like a corporation) called the “Probate Estate” to take the decedent’s place and hold the decedent’s assets. A Personal Representative is appointed by the court to administer the probate estate.

In the process of probating an estate, the Probate Court must be shown that everything is proceeding as required by Florida Statutes. The word “Probate” essentially means “to prove.” Is the Will valid?  Have creditors been notified and paid? Have beneficiaries been provided information and received their allotted share? You may know that there are no problems, but the court does not.

Through the probate process, the court assures that the Personal Representative fulfills the various responsibilities to 1] beneficiaries, 2] decedent’s creditors, 3] IRS, and 4] for expenses in administering the estate.  In this article, we will look at the Personal Representative’s responsibilities to beneficiaries and creditors, and in the next article the responsibilities to the IRS and for administrative expenses.

BENEFICIARIES: When someone must rely on the honesty and diligence of another person to protect his/her property, it creates a fiduciary relationship. Under the law, there are different levels of proof to show misconduct. At one end of the spectrum is the proof needed to show “beyond a reasonable doubt” that someone is guilty of a crime. At the other end is the responsibility of a fiduciary to clearly show he/she is protecting the beneficiaries’ interests.

The Probate Code requires that beneficiaries be provided with a copy of the Will, Petition for Administration, Notice of Administration, Letters of Administration, the Inventory (showing date of death values), the Accounting (showing what has occurred with estate assets from the Inventory to the time of distribution), and the Petition for Discharge (which shows the proposed distribution).  If not satisfied, beneficiaries have the right to file objections with the court.

CREDITORS: All reasonably ascertainable creditors must be mailed a “Notice to Creditors” advising that they have 30 days from the receipt of the notice to file a claim with the court. Other creditors have three months from the date Notice is published in the newspaper to file a claim with the court. If a questionable claim is filed, the Personal Representative has 30 days in which to file an objection with the court. Once an objection is filed, to pursue the claim the creditor must bring an independent legal action within 30 days.

Not all assets in probate are subject to creditors’ claims, including $20,000 in furniture and appliances, plus two motor vehicles. When the home is going to certain relatives, the court can determine that it is “protected homestead“ free of most creditor claims. However, the home is still subject to mortgages on the property, IRS liens, liens for work performed on the property, and real estate taxes.


For further information on estate planning, you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267 – 4770. His office is located at 239 Harrison Street, Titusville, Florida.


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By Jason ValaVanis, CFP

It seems too often that I’ll meet elderly parents who really have no estate plan. Alarmingly so, many married couples with grown children believe a simple last will and testament is a complete estate plan. Yes, it’s better than nothing, but only drafting a will falls far short of creating an effective estate plan.

I won’t get into the necessary estate plan details in this article. But, I do want to emphasize that if you have assets exceeding $150,000, you may want to create a lasting estate plan – one that benefits you while living and then benefits your beneficiaries after you expire.

Choosing who is in charge and who will get the booty following your “celebration of life” ceremony is no easy task. If you have a few children and they each love each other and don’t have a third eye, you’re in luck. Selecting who gets what and when may be an easy task if your children are exceptional and responsible, but be cautious if one or more of your kids has serious issues. I’ve seen parents select certain children to act as successor trustees to their living trust but they have dreadful money management skills. Even worse, I’ve witnessed ex-felons take charge of mom’s estate worth in excess of $1 million. A few years ago, I successfully persuaded a client to disinherit her son. Why? The reason was simple; he was in federal prison for tax evasion and owed an incommutable penalty of $650,000 forever with no-forgiveness provision added to his sentence.

Sometimes it seems you have no choice. Yes, often the decision appears so difficult that mom and dad refuse to create an estate plan altogether! Inaction is often worse than the end result of a bad decision. It takes guidance. It may be a good idea to seek the advice of a competent financial advisor or estate-planning attorney.

What should you do if your youngest child, age 46, is a bi-polar patient and is also suffering from depression and marital problems? Do you leave her one-third of your estate – in cash? Good heavens! What are you thinking? There are ways to solve this dilemma without disinheriting your kids, so don’t panic. You need to rethink your options. Do not blindly divide up your estate into equal shares only because you feel a duty to be fair. “Fairness” is an arbitrary word in the complex world of estate planning. Yes, of course, some children deserve absolutely nothing and some deserve a heck-of-a-lot more than their evil siblings, so chopping the final sum into drone-style pie slices may be a bad idea.

What about that one son that has not called or visited in 15 years? What about your estranged daughter that did not attend daddy’s funeral and she only lives 80 miles away? Many widowed parents are starving for love, affection and assistance yet their children are nowhere to be found. How do you reward them?

I have elderly clients that live within a 20-mile radius of all three of their children and are rarely visited or telephoned, even on birthdays and holidays. In such scenarios, it is understandable why grandchildren are named beneficiaries instead. Realistically, this is a very popular option as a solution to this dilemma. But even that does not always work.

Is your financial advisor asking you the right questions? Are you being expertly guided in these difficult beneficiary decisions? The choice to include or exclude a child or other heir can be tricky. Sometimes a second marriage is involved. What if some of your assets were originally intended for your stepchildren? What then?

There exist beneficiary payout provisions for your IRAs, annuities, Trusts, and life insurance policies that allow you to solve these tough decisions. Not only can you eliminate a certain beneficiary, but you can also control how and when they receive their inheritance, even far into the future – if you wish. Yes, my friend; you can control the process from the grave. Sound spooky? It is spooky and it is extremely convenient.

If your financial advisor is only interested in selling more stuff to you, give me a call. I pride my practice on solving potential problems, avoiding costly mistakes that are hidden, and asking you the crucial questions that you have not thought to ask yourself. Solving financial planning problems doesn’t have to be a chore.

Jason ValaVanis is a Board CERTIFIED FINANCIAL PLANNER® and the owner of ValaVanis Financial, in downtown Melbourne. Jason specializes in lifetime income planning for Retirees. Jason can be reached at 321-956-7072.

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What documents are needed for an estate plan?

By Attorney Truman Scarborough

A number of documents are used to develop a comprehensive estate plan with a Trust. They may include the following:

For Your Health Needs:

Health Care Surrogate – Designating someone to make health care decisions in case you are

HIPAA Form – Authorizing release of medical information, as required by Federal law

Living Will – Instructions not to be kept alive by artificial life support

For Your Property:

In Case of Incapacity:

Durable Power of Attorney – Even if there is a Trust, a Power of Attorney may be needed to address issues with social security, Medicare, pensions, tax returns, insurance, etc.

• Naming a Special Trustee in your Living Trust (see below) – To manage your property if you become incapacitated.

For Avoiding Probate:

• The Revocable Trust – An artificial legal entity like a corporation, the Trust is capable of holding title to property, entering into contracts, and going to court if needed. Because it continues on after you are gone, assets in the trust avoid the need for probate. The Trust provides for who will act as trustee and who will receive your assets after you pass away.

Memorandum of Trust – A summary of the Trust for banks and stockbrokers etc.

For Funding the Revocable Living Trust:

Deeds – To transfer real property into the Trust.

Various transfer forms – For government bonds, mutual funds, etc.

• Stock Certificates for Corporations and LLC Membership Certificates – To transfer closely owned legal entities into the Trust

• Bill of Sale – To transfer tangible personal property (like furniture, china, tools, etc.)

• Pour-Over Will – In case all your property had not been transferred into the Trust at the time of your demise.

While these separate documents serve diverse purposes, they must work together to assure your affairs run smoothly and without the need of court intervention. For example, the Power of Attorney and Will used with a Trust are different than the ones used when there is no Trust.

For further information on estate planning you may be interested in Attorney Truman Scarborough’s Booklet on Estate Planning in Florida. It is available without charge or obligation by calling (321) 267 – 4770. His office is located at 239 Harrison Street, Titusville, Florida.

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What is Money?

by Jason S. ValaVanis, CFP

It seems, at least from my point of view, there exist only three categories of Americans who each hold different perspectives on “money”. Yes, my friend, only three. In over 23 years of maneuvering money for the benefit of my clients, it appears peculiar that most people have not successfully acquired a real understanding of what money actually represents. Here today, we’ll discuss this idea.

Since the beginning of tangible booty, about 2500 years ago, mankind has relied on some form of coinage. The original minting of this shiny stuff began around the 6th century B.C. in Babylon. Of course, we had bartered ever since the Stone Age, where one grunt would trade a fresh kill for a bundle of fruit from another grunt. Bartering is a form of legal tender even today, but it isn’t real money in the legal sense.

Historically, governments created their money, or currency, out of precious metals in order to stabilize its intrinsic value and hopefully stabilize their economy and appease the people. The “coin” was coincidentally backed by the full faith and credit of the issuing government, like it is today. In essence, a country’s currency is only as strong as its standing army, like present times. Over the decades, governments abandoned the use of gold and silver, since there’s just not enough to go around. Did this diminish its real value? Still, what is money? Is it fake? Is it really anything at all?

I’ve learned that approximately a third of America sees money as some variety of evil, hence this is why they like to get rid of it so quickly. They do not see it as a positive element. The moment it is earned, it is spent and it is departed. These folks seem to “live for the moment” and often seek immediate gratification. On the opposite side of the spectrum are the hoarders or compulsive savers. They see money as a Godsend and tend to bankroll it and savor its ownership. They dread the thought of losing their money and are horrified at the notion of having to re-earn it. They tend to under-spend and sometimes deprive themselves and their loved ones of needed goods and services, even though they can afford it. Oddly enough, these people rarely donate to charities. Neither of these two species really understand what money truly represents, do they?

What actually is money, you ask? Well, you’ll hear it here first: Money is humanity’s most profound creation! Without it you’d still be living in a mud hut with a thatched roof. Money touches every second of every day for all of us. For our money, strangers grow our food and strangers build our houses and roads. For our money, more strangers weave our clothes and transport us to our destinations. All this for some ugly paper? Unbelievable, isn’t it? Money removes the many degrees of separation that bartering imposed upon us for dozens of centuries.

The Neanderthals of society will scoff at our money problems and proclaim that money is the root of all evil. Not true, I say! In my meek opinion, money is the root of all industry, production, economies, health, nutrition, housing, transportation, and education. Without this fiat currency, we would transgress back into the caves whence we came. Enabling a man to trade his blood, sweat, and tears for a common currency, thus allowing him to survive and prosper, is nothing short of amazing.

Who is this third creature among us? The last and most ‘wanted’ element of society is the one who understands money and who fully grasps the idea that money represents sacrifice and labor. In order for one to acquire money, he or she was required to suffer a sacrifice; whether it be hours, months or years of hard work and diligence; whether it be away from family and loved ones; whether it be years of apprenticing to learn a skill or trade – it was EARNED. Then my friend, the worthy one is permitted by grace to trade that ugly paper for society’s elements of comfort; the clothes, the food, the wine and the abode. If this providential soul wants to ensure his or her future beyond the capabilities that age allows, then they use investments and savings to carry them even further into the sunset.

So, with this splinter of enlightenment, money is not evil nor should it ever be hoarded. It is necessary and forever ubiquitous. Treasure it with humility and the understanding that without it, the alternative is unacceptable.

Jason ValaVanis is a Board CERTIFIED FINANCIAL PLANNER® and the owner of ValaVanis Financial, in downtown Melbourne. Jason specializes in lifetime income planning for Retirees while protecting principal.
Jason can be reached at 321-956-7072.

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