Florida Estate Planning Lawyer Blog

In Florida, if the wording of your current deed has consequences that you did not intend, you may want to consider a corrective deed. Please consult an Florida Estate Planning Lawyer , title company or other real estate professional to help you prepare your corrective deed. The Property Appraiser's office cannot advise you, since there are many serious considerations that go beyond how homestead exemption is calculated, including income and estate tax consequences. We recommend that you never attempt to change your deed without the help of a Florida Lawyer
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Posted In: Homestead

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Are there other ways of transferring my property for estate planning that will not disturb my Homestead Exemption or SOH Cap?

Two methods of transferring your property will, in most cases, keep your Homestead Exemption and SOH intact: reserve a Life Estate for yourself or transfer your property to your trust. Please consult your attorney or estate planning professional before attempting either option.

If you transfer your property to a trust, your attorney should know that three criteria are required in order for your Homestead Exemption and SOH cap to remain intact:

* You as the homestead owner must have beneficial or equitable title to real property. In other words you must be the trustee or beneficiary of the trust. If you are the beneficiary but not the trustee, your interest must be in REAL property, not PERSONAL property.
* You must have the present possessory interest in the property. Simply, you must have the right to live there.
* The deed that transfers the property into the trust must be recorded.

If you are transferring your property by deed and want to maintain your Homestead Exemption and SOH cap please Contact a Florida Estate Planning Lawyer to verify that you are doing it correctly.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Estate Planning , Homestead , Probate

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When one dies the value of their estate is subject to an Federal Estate Tax. This rate is currently 45%. In 2008 the Federal government has an exemption of the estate tax on the first 2 million dollars in value. In addition, many states have additional state taxes that are due when a resident of their state dies. Florida use to have an estate tax, but repealed it when the federal government stopped allowing you to deduct the amount of state estate tax paid from the federal estate tax due.

You should check on the estate tax in your state and consider costs and benefits of your state versus those with no estate tax. One of the reasons so many wealthy people move to Florida is the lack of income tax and estate tax.

How much are estate taxes?

Your estate will have to pay estate taxes if its net value when you die is more than the "exempt" amount set by Congress at that time. Here is the current schedule for the federal estate taxes:

Year of Death.........Estate Tax "Exemption"
2008................................$2 million
2009................................$3.5 million
2010................................N/A (repealed)
2011 and thereafter..........$1 million

In addition you may have to add your states taxes on top of the numbers above.
Although 2010 looks like 0, it really is higher, in 2010 the plan is tax on the increase in value of one's estate. Under the current plan, most assets are able to take advantage of a free stepped up value based upon the fair market value at the time of the decedents death.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Death Taxes , Estate Taxes , Probate , Tax issues

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A Florida Life Insurance Trust is an irrevocable trust that allows an individual to make the proceeds of a life insurance poliicy free from income taxes and estate taxes. Typical life insurance policies are income tax free, but many increase the value of one's estate to the point that the federal and or state income taxes are due. By using an ilit one can avoid these taxation issues.

In 2008 the Federal tax exemption is $2,000,000. Lets take a client with 1.5M in assets and a 1M life insurance policy.

If they were to die in 2008 their estate would be valued at 2.5M and 500,000 would be subject to estate taxes. The current estate tax rate is 45% so this estate would have to pay a tax of $225,000.

In 2011 the estate tax exemption is only $1M. With an estate valuation of $2.5M, 1.5M would be subject to estate taxes. Using the same tax rate, this estate would have to pay $675,000.

To find out if or how a Florida Life insurance trust can help you please Contact a Florida Estate Planning Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Death Taxes , Estate Planning , Estate Taxes , Irrevocable Trust , Life Insurance Trust , Probate , Tax issues

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North Dakota has joined the growing list of states in which we have a relationship with a lawyer who is familiar with the (NFA) National Firearms Act's requirements relating to the formation of trusts to purchase Class 3 weapons. These include silencers, short barrel rifles, and machine guns.

If you are looking to create a North Dakota NFA Firearms Trust, please Contact us and we can help make sure your trust deals with the many unique issues surrounding owning these firearms in a Revocable Trust

If you live in North Dakota or another state and wish to create a NFA trust to protect your family and purchase NFA Class 3 or Class 1 firearms Contact a NFA lawyer in your state

If you are a lawyer licensed in any state and would like to work with us to provide NFA trusts to clients in your state, please Contact David Goldman a Florida Gun Trust Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Gun-Firearms Trust , NFA Trust , National Firearms Gun Trust

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When creating a revocable trust you may be asked for a Employment ID number (EIN) or Tax ID to open the account or fill out the paperwork. Many banks do not understand the difference between a revocable and a irrevocable trust. Although irrevocable trusts require TAX ID or EIN's revocable trusts do not require them.

When this happens to you, it may be difficult to get them to understand why they do not need this information. It is best to just fill out that section with your social security number - which is your Tax ID number.

If you have questions on a Florida Revocable Trust you should Contact a Florida Estate Planning Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Estate Planning , Irrevocable Trust , Living Trust , Revocable Trust

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For a number of years the IRS has attacked FLPs and FLLCs on the basis that there is no valid business purpose for the entity.

Clients have argued that a key reason for using the LP form is so that capital can be concentrated or pooled and then invested for greater resulting returns. Credible evidence is cited to support the contention that money invested with a long term investment time-line and with a disciplined investment policy will yield greater returns than money invested in response to demands for quarterly or annual performance.

Many reported cases have problems because senior family members contribute assets to their LPs while keeping their current invested strategy. It is important for clients to know that the courts have repeatedly cited this lack of change in investment strategy as evidence that the creation of the LP was “only a change of title” or resulted in a “mere recycling of value.”

Best practice: After assets are transferred to the LP, it is important to work with the partnership to create an investment policy statement that outlines

• how the LP intends to invest,
• why it intends to invest in a certain way, and
• what results are expected to be achieved.

Not all assets need to be sold and reinvested immediately. Stock with built in gains or restrictions will typically have a slower exit in order to avoid or postpone capital gains taxes or to comply with SEC rules.

The more the LP can distinguish its new investment strategy from senior family member’s prior strategy, the better it will be against possible attack.

Some cases where the courts have specifically called the tax payers to task for “merely recycling of value” include:

Estate of Harper v. Commissioner, T.C. Memo 2002-121 (U.S. Tax Court 2002).
Estate of Bigelow 89 T.C. M. 954 (2005).
Estate of Strangi v. Commissioner, 85 T.C. Memo 1331 (2003)
Estate of Concetta H. Rector v. Comm., T.C. Memo 2007-367

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Business Law , Estate Planning , FLP , Family Limited Partnerships

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A Power of Attorney is generally valid when you travel because a Power of Attorney valid in another state will be valid in Florida. That being said there has been a problem with out of state Power of Attorney being properly recognized in Florida. As a result Florida passed laws that when complied with allow the agent to recover fees associated with the enforcement of a Power of Attorney which is in substantial compliance with the statute.

What does that mean for you? There is no reason why someone should not accept an out of state Power of Attorney, but no recourse when they do not.

Generally when moving to Florida, we recommend that our clients execute new Durable Power of Attorney Documents when possible. When this is not possible clients can check with their local banks to see if they will accept them. This should be done prior to transferring money to the financial institution. We have seen cases where banks accept the transfer and creation of accounts and then do not accept the agent's authority later.

To check if your Durable Power of Attorney or Power of Attorney is compliant with Florida law please Contact a Florida Estate Planning Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Durable Power of Attorney , Estate Planning

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In Florida, the powers granted by a Florida Guardianship expire when the ward dies. Often people try to use their powers granted by a Florida Guardianship to control aspects of the after death process. The guardian is without any powers granted by the guardianship once the ward dies.

If you are having problems with a Florida Guardianship or Florida Guardian Contact a Florida Estate Planning Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Guardianship , Probate

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Recently we have notice that Hospice organizations are refusing to allow people to visit relatives or friends while under the care of Hospice.

In these cases, the people were turned away because someone with a Power of Attorney was able to state that the person was not wanted.

It is important to remember that a Power of Attorney or Durable Power of Attorney give an agent the right to act in certain circumstances. In Florida, a Power of Attorney does not give someone the right to make decisions regarding where they are located, who they can visit, or who they can talk to.

It is possible to make these decisions for an individual, but only when someone has been appointed as their Florida Guardianship. Even if someone is the Florida Guardian they may not have these rights.

If you have a loved one and you are being prevented from seeing them because of a Power of Attorney you should Contact a Florida Estate Planning Lawyer to discuss your situation.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Durable Power of Attorney , Elder Law , Estate Planning , Guardianship

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Often I receive inquiries from individuals looking to create a NFA Firearms Trust to purchase Class 3 Firearms. Several times these individuals are looking to keep these Firearms in their vehicle, motor home, or boat. Individuals, Trusts, Corporations, and LLC's must get permission to transport these items interstate.

The NFA has an Application to Transport Interstate or to Temporarily Export Certain national Firearms Act (NFA) Firearms.

A written request and prior authorization from ATF to transport interstate or in foreign commerce any destructive device, machinegun, short-barreled rifle, or short-barreled shotgun is required under the provisions of Section 922 (a)(4), Title 18, U.S.C., and Section 478.28, Title 27 CFR, a letter of request, in duplicate, containing all information required on this form, may be submitted in lieu of the form.

The registered owner of NFA firearm(s) shall complete two copies of ATF Form 5320.20 and forward the forms to the Director, Bureau of Alcohol, Tobacco, Firearms and Explosives, 244 Needy Road, Martinsburg, WV 25405 (Attention: NFA Branch).

The original of ATF Form 5320.20 will be returned to the registered owner. Approval authorizes the registered owner to transport the designated firearm(s) only during the time period specified in item 3. THE AUTHORIZATION DOES NOT CARRY OR IMPORT RELIEF FROM ANY STATUTORY OR REGULATORY PROVISIONS RELATING TO FIREARMS OTHER THAN 27 CFR 478.28.

In the event item 2 is checked “yes” and the firearm(s) is not returned to the original location by the date specified, the registered owner shall submit a new application on ATF Form 5320.20 to receive approval to return the firearm(s).

If a contract or common carrier is used to transport the firearm(s) a copy of ATF Form 5320.20 shall be furnished to the carrier and shall be in the possession of the carrier for the duration of the transportation. This will meet the requirements of sections 922(e) and (f) of the Gun Control Act of 1968.

Privacy Act Information
1. Authority. Solicitation of this information is made pursuant to the Gun Control Act of 1968 (18 U.S.C. 922(a)(4)). Disclosure of this information by the applicant is mandatory if the applicant wishes to transport in interstate or foreign commerce any destructive device, machinegun, short-barreled shotgun, or short-barreled rifle.

2. Purpose. To determine whether the proposed transaction of the listed items is reasonably necessary and consistent with the public safety and applicable State and local law.

3. Routine Uses. This information will be used by ATF to make the determination set forth in paragraph 2. No information obtained from an application, registration, or records required to be submitted by a natural person in order to comply with provisions of the National Firearms Act or regulations issued thereunder, shall except in connection with prosecution or other action for furnishing false information be used, directly or indirectly, as evidence against that person in any criminal proceeding with filing of the application.

4. Effects of Not Supplying Information Requested. Failure to supply complete information will delay processing and may cause denial of the application.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Gun-Firearms Trust , NFA Trust , National Firearms Gun Trust

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Florida judge who presided over the Terri Schiavo case until her death, has a new assignment. He no longer judges Florida Guardianship cases. He judges divorce cases.

The Judges transfer from Florida Probate and Florida Guardianship court to family court should allow Judge Greer who is now 65 to serve the next three years in obscurity before his retirement.

Judge Greer is nationally famous and has 20 honors displayed in his chambers. The largest is the 2005 President's Award of Merit from the Florida Bar, "for your unswerving commitment to the rule of law, the independence of the judiciary and the fundamentals of American democracy."

With the recent cases like Britney Spears competency hearing, many have found the need for a Durable Power of Attorney and the Schiavo case is a good reason people need a Florida Living Will. After all if Schiavo had a Florida Living Will she and Judge Greer would not have had the national spotlight. The fight was only because Schiavo did not have a Florida Living Will.

If you would like a Power of Attorney or Florida Living Will please Contact a Florida Estate Planning Lawyer to discuss your needs.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Durable Power of Attorney , Elder Law , Estate Planning , Living Trust , Revocable Trust

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In 1984 the Supreme Court in Dickman v. Commissioner, defined a taxable gift by using an analogy. The Court used the income tax definition of “all income from whatever source derived” to describe how a taxable gift should be defined.
Section 2501(a)(1) of the Internal Revenue Code imposes a tax upon "the transfer of property by gift." Section 2511(a) provides that such tax shall apply whether "the transfer is in trust or otherwise, whether the gift is direct or indirect, and whether the property is real or personal, tangible or intangible." In Dickman, the Court decided that an interest free loan was a gift.
Would a family vacation, or providing a party for a wedding be viewed as a taxable gift? This may depend on whether the person paying for the activity is in attendance of the event.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Estate Planning

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Alabama has joined the growing list of states in which we have a relationship with a lawyer who is familiar with the National Firearms Act's requirements relating to the formation of trusts to purchase Class 3 weapons. These include silencers, short barrel rifles, and machine guns.

If you are looking to create a Alabama NFA Firearms Trust, please Contact us and we can help make sure your trust deals with the many unique issues surrounding owning these firearms in a Revocable Trust

If you live in Alabama or another state and wish to create a NFA trust to protect your family and purchase NFA Class 3 or Class 1 items Contact a NFA lawyer in your state

If you are a lawyer licensed in any state and would like to work with us to provide NFA trusts to clients in your state, please Contact David Goldman a Florida Gun Trust Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Gun-Firearms Trust , NFA Trust , National Firearms Gun Trust

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A common technique with large Florida Estate Planning is the use of FLP's or Family Limited Partnerships. Neil Hendershot of the PA Elder, Estate & Fiduciary Law Blog summarized the recent highlights of the Heckerling Institute where they discussed those issues in detail.

The most important issues dealt with making sure there was

(1) not a gift on formation of a family limited partnership. This can be done by making sure the partnership is property funded and the capital accounts are credited. The recommendation was that during the next tax year he or she transfer partnership interest. This helps to avoid the argument that the transfer was contemplated at the time of the capital contribution. See Senda, T.C. Memo 2004-160 (July 12, 2004). One must also take this into consideration with additional contributions because they are valued with the amount given instead of a discounted valuation.

(2) Avoiding Bad Facts based on formation and operation. You do not want to have these issues used to devalue the discount on the entity.

• Disproportionate Distributions to senior family members.
• Distributions that cover senior family member's expenses.
• Do not create the partnership by an agent acting under power of attorney.
• Do not use partnership funds to pay estate taxes after death. If this looks like it will be necessary consider using a life insurance policy or a hands length loan from the partnership to fund those expenses if it is necessary.

(3) Senior family member should have no control at death or within 3 years of death to avoid an inclusion look-back period under IRC § 2035. If the senior family member must serve as a general partners remove "sole and absolute" authority language and any overly protective clauses.

(4) FPL's should be created for legitimate non-tax business purposes to avoid inclusion arguments. It is likely that the drafting attorney will provide testimony of the non-tax reasons. It might be advisable to use a separate attorney to draft the agreement who has no knowledge of the discounting opportunities when creating a Family Limited Partnership for Florida Estate Planning

(5) Potential problems arise with using a martial trust for the benefit of a surviving spouse. These interests may not get the same discounted treatment which can cause problems.

(6) Be careful with the 100 Shareholder rule when using S corporations as it is possible to have more than 100 shareholders when you look at all family members who are lineal descendants up to six generations including current and former spouses.

(7) Nonresident aliens or other non-approved shareholders can create problems with S corporations.

(8) S corporations can only have a single class of stock and all must have equal rights. Look out for disproportionate distributions, buy-sell installments, and split-dollar arrangements

The article goes on to discuss other concerns and should be reviewed by anyone looking to create a Family Limited Partnership for Florida Estate Planning

For more information on how a FLP can be an effective tool in Florida Estate Planning Contact a Florida Estate Planning Lawyer

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Business Law , Death Taxes , Durable Power of Attorney , Estate Planning , FLP , Family Limited Partnerships , Probate

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South Carolina has joined the growing list of states in which we have a relationship with a lawyer who is familiar with the National Firearms Act's requirements relating to the formation of trusts to purchase Class 3 weapons. These include silencers, short barrel rifles, and machine guns.

If you are looking to create a South Carolina NFA Firearms Trust, please Contact us and we can help make sure your trust deals with the many unique issues surrounding owning these firearms in a Revocable Trust

If you live in South Carolina or another state and wish to create a NFA trust to protect your family and purchase NFA Class 3 or Class 1 items Contact a NFA lawyer in your state

If you are a lawyer licensed in any state and would like to work with us to provide NFA trusts to clients in your state, please Contact David Goldman a Florida Gun Trust Lawyer.

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Gun-Firearms Trust , NFA Trust , National Firearms Gun Trust

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Wisconsin has joined the growing list of states in which we have a relationship with a lawyer who is familiar with the National Firearms Act's requirements relating to the formation of trusts to purchase Class 3 weapons. These include silencers, short barrel rifles, and machine guns.

If you are looking to create a Wisconsin NFA Firearms Trust, please Contact us and we can help make sure your trust deals with the many unique issues surrounding owning these firearms in a Revocable Trust

If you live in Wisconsin or another state and wish to create a NFA trust to protect your family and purchase NFA Class 3 or Class 1 items Contact a NFA lawyer in your state

Posted by David M. Goldman | Permalink | Email This Post

Posted In: Estate Planning , Gun-Firearms Trust , NFA Trust , National Firearms Gun Trust

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