May 2008 Archives

May 29, 2008

Attorney for Wills

When Selecting an attorney for will preparation it is important that they take a look at your full financial condition. Often clients think they want an attorney for will preparation but in fact need other types of estate planning.

You should be prepared to give full financial disclosure as well as all information about your family dynamics to make sure that the right Florida Estate Planning Documents are created for you.

May 28, 2008

Estate Planning and Moving Overseas

Often clients do Florida Estate Planning in anticipation of an overseas trip or international relocation. They often ask if they should make special considerations because of their anticipated location.

Generally we advise clients that the planning is basically the same even if they will be living overseas for an extended period of time. The one area where there may be differences is in their Durable Power of Attorney where it might be advisable to make changes.

These changes require an evaluation of the current and anticipated needs of the individual client and cannot be generalized.

If you are planning an international trip, going on a cruise, or moving overseas for a time, you should contact a Florida Estate Planning Lawyer to discuss or review your Florida Estate Planning Documents .

May 27, 2008

Can Grandpa Take His Machine Gun to the Nursing Home?

What happens if Grandpa needs to Nursing home coverage and he owns a Class3 weapon like a Machine Gun?

Title II Firearms (sold by Class 3 SOT dealers) or those controlled by the National Firearms Act are not exempt assets when it comes to Medicaid Planning.

There are ways to preserve these assets for your family but it involves converting the asset from an exempt asset to a non-exempt asset. On my other blog, Gun Trust Lawyer I wrote a Gun Trust Information article addressing this issue.

If you or your family has a person who needs nursing home coverage and they have war relics which may include a Machine Gun you should Contact a Florida Estate Planning Lawyer to discuss your situation.

May 27, 2008

Executor, Personal Representative, PR Fees: Are They Taxable?

If I am the PR of a Florida Estate Planning, do I have to pay income taxes on the money I receive?

The short answer is yes you do. These fees are considered an expense of the estate and unless you qualify for an exemption, you would have to report this as income on your tax return. You should speak to your accountant about where to pick this up and how this will impact your income.

If the money is paid as a distribution of assets instead of a fee, there is generally no income tax associated with the money. For estates which have a value of less than the estate tax exemption, this might be a solution.

For larger estates, the PR fees are only ordinary income while the asset if counted in the estate could be subject to estate taxes in the amount of 45%.

It is important to consider the tax implications of your estate plan. This is often hard to do with the frequency of changes to the death tax or estate tax.

This is another reason to have your Florida Estate Planning reviewed by a Florida Estate Planning Lawyer on a regular basis.

May 23, 2008

Living Trust Mills Winding Up In Some States UPDATED

Although there are no current verdicts against Florida Companies, many states have taken action against living Trust Scams / Trust Mills / and Elder Law Planning Seminars. Michael Bonasera of Buckingham Doolittle & Burroughs, LLP and author of the The Ohio Trust & Estate Blog wrote an article titled Living Trust Scams/Trust Mills/Elderlaw Planning Seminars - STAY AWAY! where he mentions a previous posting on this Blog, Florida Estate Planning Lawyers Blog, on a similar topic dealing with a Texarkana Arkansas class action suit.
I thought I would start a list of Living Trust Scam Articles and resources on my blog.

1. Texarkana Arkansas Living Trust Seminar Class Action suit
2. California Living Trust Mill Judgment
3.Texas Bar story reported by Professor Beyer of Wills, Trusts & Estates Prof Blog- Living trust Scams and Senior Consumer
4. Michael Bonasera wrote an article titledLiving Trust Scams/Trust Mills/Elderlaw Planning Seminars - STAY AWAY! where he Ohio's history with Trust Mills and cites a case Ohio Trust Mill Case of Cleveland Bar v Sharp Estate Services, Inc. which seems to have ended Trust Mills in Ohio.
5. Minnesota Sues "Trust Mills" on
6. Beware of Trust Mills when Estate Planning - by Randall Armour, CA Lawyer- reported on by Florida Estate Planning Lawyer Blog
7. Don’t Trust the “Trust Mills”, Traci D. Ellis Esquire

If anyone has heard of additional Living Trust Scam / Trust Mill or Elderlaw planning Seminar articles please contact me and let me know and I will update the list.

May 21, 2008

We the People franchise found to be practicing law without a license

There are many places to get advice on the Internet. Be sure when you are looking for legal advice, you are working with a licensed lawyer. Below is the finding of the Ohio State Bar in regards to one such service.

We the People is a franchise that provides forms and help in legal matters including wills, trusts, divorces, bankruptcy and other areas of law.

The Ohio State Bar found that they were practicing law without a license because they were owned and operated by attorneys not licenced in Ohio and advised individuals with respect to the completion of forms for filing a personal bankruptcy, application of probate, advising individuals on how to complete the forms and what answers to put down, directing individuals to execute documents and charging them for services, instructing completion of forms in disregard for proper procedures and determination by the Bankruptcy Court that the filing was incomplete, preparation of unnecessary and incorrect form for administration of an estate, preparing improperly completed forms for a bankruptcy, issuing advertisements, and advertising the preparation of services for living trusts, wills, powers of attorney, and incorporation's.

They were enjoined form further engaging in the unauthorized practice of law and from damaging members of the public and fined $10,00 per occurrence as a civil penalty as well as court costs.

To read more download the case Ohio State Bar Association v. Martin et al., No. 2007-1939, 2008 Ohio 1809; 2008 Ohio Lexis 1024 (April 23, 2008)

May 16, 2008

Enhanced Life Estate Deed Question. What happens when the owner of the Remainder Interest predeceases the life tenant?

A *Florida Enhanced Life Estate Deed or Florida LadyBird Deed is designed to pass the property if any to a person upon the death of the life tenant while allowing the life tenant to do anything during their life.

What happens if the person named in the remainder interest predeceases the life tenant?
This is
From A to B for life (with enhanced powers) remainder to C.
If C dies before B, and then B dies the property will revert to A or A's Estate upon B's Death.

This can be problematic when claims are potential claims against A's estate.

1) When C dies, B should change the Enhanced Life Estate Deed
2) create the deed in such a way that the language of the deed specifies that the property does not go back to A or A's heirs

If you need a Florida Enhanced Life Estate Deed or Florida LadyBird Deed Contact a Florida Estate Planning Lawyer to create a deed that serves your needs and minimizes your risks.

May 14, 2008

Machine gun transfer nets prison sentence

A new Blog ( Gun Trust Lawyer ) dedicated to Gun Trusts and issues related to the ownership of Title II Firearms (sold by Class 3 SOT dealers) (which I started) has an article on a man who was arrested for an improper transfer of a unknown class 3 machine gun.

His gun misfired and was reclassified as a Machine Gun. This along with allowing a potential buyer to shoot it at a range resulted in the invalid transfer of a Class 3 Weapon, a crime punishable under the NFA with a sentence of up to 10 years in jail.

These are the types of transfers a NFA Gun Trust can help prevent.

The is the link to the article on Invalid Class 3 Gun Transfer

May 13, 2008

What is the difference between a Living Trust and a Bypass Trust?

A Florida Living Trust is a Florida Revocable Trust created while a person is alive, while a Bypass Trust is usually a testamentary irrevocable trust. Some Bypass Trusts are created by a Living Trusts or even Florida Will.

A Trust is an ownership arrangement where property is held in the name of a "trustee" rather than in the name of the person who really owns the property. It is a separation of legal and equitable ownership. People often create Living Trusts for their own benefit, to avoid probate, address the possibility of future incapacity, or keep their finances private.

Normally, the person who creates a Living Trust names himself or herself as trustee and as beneficiary. Upon that person's death, all or a portion of the property which remains in the Living Trust passes according to the terms specified in the trust agreement.

A Bypass Trust is created when a husband or wife dies and their assets are more than the estate tax deduction. Currently this is when a couple is worth over $2,000,000. The Bypass Trust is a way to shelter the first spouse's $2,000,000 exemption from taxation when the surviving spouse dies, thereby doubling the amount that can be left tax-free to $4,000,000.

Also a Bypass Trust can protect the trust property from creditors' claims, and allow the deceased spouse to direct where the trust property passes when the other spouse dies.

May 12, 2008

What is a 529 accounts, and are they good?

529 accounts are good and are one of the best ways to save for a child's education.

When paying for college there are many options.

Uniform Transfers to Minors Accounts;
Education IRAs;
Prepaid tuition plans; and
529 plans to name a few.
The 529 account seems to have the best features of each option and be one of the better investment vehicles.

The biggest advantage is that earnings and most withdrawals are free of income unless they are not used for tuition, room, board, and other authorized expenses.

Another advantage is that gifts to a 529 account can be made in larger amounts. Typical gifts can only be $12000 per person per year. but with a 529 plan you can make a gift that is 5x as large.

As far as estate taxes are concerned, all amounts contributed are excluded from your estate even though you control the account.

Any Downsides worth noting?

529 accounts don't let you choose the investments yourself.
If you use funds in the account for non-qualified purposes, a 10% penalty will apply to the portion of the withdrawal which constitutes investment gains.
The tax laws which make 529 accounts so great may expire in 2011
If Congress fails to extend the new tax laws, and other key benefits can always be changed during a future session of Congress.

May 1, 2008

What gifts can I make without having to pay gift taxes?

You can give any person $12,000 a year without any gift tax consequences. This annual gift exclusion is now indexed for inflation and be increasing periodically in $1,000 increments.

If you are married, you and your spouse can each give $12,000 a year for a total of $24,000. If the person you are giving to is married, you can give $12,000 to that person and their spouse.

You may also pay tuition or medical payments on behalf of another, but it is important to make those payments directly to the institution and not give the money to the individual to make the payments. When the payments are made directly they do no count against the $12,000 gift exclusion.

If you want to make a gift that is larger than the $12,000 limit you can also use part of your $1,000,000 lifetime exemption. This exemption is an amount that each person can give away during their lifetime without having to pay gift taxes.

If you do give away more than $12,000 to any individual not including payments for tuition or medical expenses that are made directly, you need to file a gift tax return by April 15th of the following year.

Once you have give away more than the $1,000,000 lifetime limit, you must start paying gift taxes. These gifts are currently taxed at a rate of 45%

Before making large gifts, you should take with your tax professional or your Florida Estate Planning Lawyer.