Florida Estate Planning Lawyer Blog

Domestic Asset Protection Trusts (DAPT) have become the latest rage in estate planning and asset protection. We have generally found that there are better ways of protecting assets from creditors by using traditional estate planning that has case-law history.

In a recent US bankruptcy case, a DAPT was invalidated and the 10-year bankruptcy statute of limitations in regards to trusts was upheld. This was an Alaskan case using an Alaskan DAPT but similar results should be expected in other jurisdictions.

If you are interested in Florida Asset Protection or Asset Protection in Jacksonville, contact a Florida Asset Protection Lawyer to discuss your circumstances and options that are available to help protect your assets from creditors or increase the ability to negotiate with creditors.

Today there is much speculation about what Steve Jobs' will reading will reveal about his life. Steve Jobs has always been very quiet and protective about his personal life and we all know that he has been very good at protecting business secrets.

I was interviewed today about what Steve Jobs's will and the potential huge estate tax that will be paid. I think if you look at how he managed his life and businesses, it is likely that if Steve had a will, it will not be read and there will be no probate. I believe that none or almost none of his assets will pass under a traditional probate and that there will be no boom to the economy from his huge estate. Steve was married at the time he died and as such jointly held assets or those in a joint trust will probably not be subject to any estate taxes.

It is unlikely that we will hear anything in the next few months and may never know about Steve's estate.

Forbes is reporting that Steve Jobs's estate will probably not owe taxes also

Often families have vacation property that has been owned for may years or generations. It would be virtually impossible for most children to acquire or maintain these types of properties in today's market.

We often use business entities or trusts to hold title to the property and other assets to help provide for the management and expense of owning and operating a vacation home. When the property is going to be inherited by more than one child or family. An operating agreement or trust agreement can provide rules for handling allocation of time, and expenses among the children and their families.

If you have a family beech or lake home or a ski lodge you may want to talk with a Florida Estate Planning Lawyer about how to protect the property from your creditors, the creditors of your children, and disputes between your children regarding the use and expense sharing of the home in the future.

In Florida, all marital assets are subject to equitable distribution. If you leave assets to your children in a revocable trust, they can also be at risk to equitable distribution depending on the circumstances and how they are used. If you create an Irrevocable Pure Grantor Trust (IPUG) and leave assets to your children in their own IPUG they will remain separate property and are only subject to alimony and child support as a last resort. Generally these assets will be protected as separate property in the case of a divorce which occurs in around 50% of all marriages.

To discuss how an IPUG trust can protect assets from your creditors and those of your beneficiaries, contact a Florida Estate Planning Lawyer to discuss your circumstances and goals.

Currently the Revocable Living Trust is the most popular type of trust for estate planning. With the current estate tax exemption at 5 Million dollars, many have begun to ask if there is a need for such a trust. More over the Revocable Living Trust provides no asset protection.

Currently 99.7% of the US population has less than 5 Million in Assets. While a Revocable Living Trust can offer privacy, probate avoidance, easier management of one's assets, and numberous other benefits, it does not offer any asset protection. Many people really want an irrevocable trust, but do not want the consequences of the traditional irrevocable trust. While there are many types of irrevocable trusts, most either cause a loss of control over the assets by the grantor, loose the stepped up basis, or cause the trust to pay taxes at the highest tax rate with as little as $11,000 in earnings.

There are variations of the irrevocable trust that can solve one or more of these issues, but there is only one type of Irrevocable Trust that has the flexibility of a revocable trust, provides asset protection from the creditors of the creators as well as the beneficiaries, allows the income to be taxed at personal rates, and provides for stepped up basis upon the death of the creator.

While the IPUG: Irrevocable Pure Grantor Trust defies the logic of most estate planners, it has been designed using common law, trust law, and tax law to provide Asset Protection, taxing at a personal level, the ability to control the income and principal, stepped up basis and even can even help in nursing home qualification or Medicaid eligibility.

If you would like to find out how you can upgrade your standard revocable trust or create a new Florida Asset Protection Trust, contact a Florida Estate Planning Lawyer that is knowledgeable about the Irrevocable Pure Grantor Trust and how to structure it to accomplish your goals.

Asset protection is one of the most important planning tools for America's aging population, especially in our current tumultuous economy. One new tool in protecting your assets is the Irrevocable Pure Grantor Trust -- AKA, the iPug™.

iPug™ trusts are not based on any state statute, but are instead grounded in century-old and well established common law. This means more stability in courts and more peace of mind for those who opt to use an iPug™ trust. In fact, the iPug™ is beneficial for nearly all Americans. This is because the iPug™ is taxed as a grantor trust, meaning the taxes are passed through to the grantor -- the trust itself is not individually taxed. This is beneficial for anyone with assets valued at less than $5 million -- i.e., over 99% of Americans.

There are three types of iPug™ trusts:

(1) the income-only version,
(2) the control-only version, and
(3) the third-party version.

In the income-only version, the grantor of the trust gives up the rights to the assets he or she puts in the trust -- these assets are only available to the beneficiaries. However, the grantor retains the rights to any income the trust accumulates. One downside to this version of the trust is that creditors also have access to this profit, though they do not have access to the any other assets within the trust.

The control-only version of the trust gives the grantor full control over all assets and all income of the trust. Creditors cannot reach any of the assets therein, and the grantor can distribute the assets to anyone he or she chooses -- the only exception being the actual grantor.

Finally, the third-party version is where grantors create the trust for the benefit of a third party. Usually, this involves adult children creating the trust for their parents for their parents' lifetime. This version is primarily used when parents have already transfered assets to children but are affraid or concerned that if they need them, they might not have access to the asset. This version is created and the parents are named as the beneficiaries of the trust. Further, assets within the trust are protected from the children's creditors and are not affected by divorce.

While most people feel they have to be super rich to use Asset Protection trusts an IPUG™ Trust is a Self-Settled Asset Protection Trust for that makes sense for regular people and offers Medicaid compliance that works in all states. It protects client assets from creditors, predators and nursing homes, while permitting the grantor to be trustee and have customized access.

The iPug™ Trust was created by utilizing universal, fundamental trust and common law principles dating back to the statute of uses and are not reliant or dependent upon state or federal specific asset protection laws. "In essence, the iPug™ Trust is an Irrevocable Grantor Trust for income and estate tax purposes.

Why is this important to most Americans? The IPUG™ Trust not only provides advantageous tax benefits but it also provides asset protection. Most Irrevocable trusts do not provide the beneficaries with a full step-up in basis and allow the grantor to control the funds.

With the increase in the estate tax exemption to $5 million the iPug™ will be usable by more than 99.5% of Americans.

Does the term " Florida Estate Planning" evoke thoughts of the very rich standing by their Bentleys in front of their massive estates? Maybe the term should simply be Planning, because no matter who you are or how much you own, Everyone needs "Estate" Planning

Everyone has a Florida Estate, no matter how large or small. One's estate is simply the possessions or property you have acquired, inherited, and worked for during your life. There are generally three types of property that comprise one's estate, these are:

Real Property - Your home, land, houses or other structures on land;

Tangible Personal Property - Property other than real estate that has a value due to its physical existence, such as motor vehicles, boats, furniture, antiques . . . and;

Intangible Personal Property - Property that you cannot touch, but that has a value due to the legal rights you hold. Examples include stock certificates, promissory notes, copyrights, patents and other "intellectual" property.

Everyone has an estate, but most people have not planned what happens to their estate in the future. Estate planning is the process where you decide and put in writing what you want to happen to your estate in the future, and to whom you want your estate to pass once you have passed. Estate planning is easy, contact a Jacksonville Beach Estate Planning Attorney to schedule a consult and discuss the ways you can "Estate Plan". Whether you prepare a Will, establish a Trust, or have other legal documents prepared, estate planning puts in writing how you want your real, tangible and intangible property distributed upon your death.

To hedge our bet against dying and to financially protect our families in the event death happens, we generally have a life insurance policy. This policy becomes part of our estate and can help our family with after death expenses such as funeral costs. You may already have a life insurance policy or need to get one. In either case, switching your current life insurance policy to a Florida Irrevocable Life Insurance Trust (ILIT), or setting the life insurance policy up in the name of the ILIT, can be done by hiring the services of a Florida Trust lawyer to prepare a Florida Irrevocable Life Insurance Trust.

When you pass away and have a Florida life insurance policy, the insurance payment is deemed to be included in the insurer's (the person who is now deceased) estate. By passing to your heirs under your estate, the insurance payment can be subject to federal and state estate tax, which can be about 40% for the portion which is in excess of the Federal Estate Tax figures. The following example assumes that the entire amount of the policy was subject to the Federal Estate Taxes. So if you have a $5,000,000 life insurance policy, your heirs receive the payment after taxes, which, in this case, would be $3,000,000 ($2,000,000 in estate taxes).

However, this does not have to be the case. If you were to set up a Florida Irrevocable Life Insurance Trust the amount of the policy would not be included in your estate, and you would not have Federal Estate Taxes which could save you more than $2,000,000 based on a $5,000,0000 insurance policy. Talking to a Florida Trust lawyer or Jacksonville Estate Planning attorney will allow you to see if your estate or life insurance is subject to estate taxes or might be subject to them in 2012 after the current exemptions expire.

Florida Dynasty Trusts are generally used to keep assets within your family members or descendants. The person who creates this type of trust usually has significant assets which are far in excess of $1,000,000 which they want to protect from the misuse or dissipation of family members. A Florida Dynasty Trust can also protect the assets within the trust from the reach of future creditors of your born and unborn family members.

Florida is a great state in which to create a Dynasty Trust. This type of trust is regulated by state law, so where a person decides to create the trust will govern which state's law will regulate the trust. Florida's state law allows for a person to create a Trust for the benefit of another (usually children or grandchildren) plus 360 years after that benefited person has died. This is a longer than many states that have a limit of 21 years after the death of the beneficiary who was alive at the time the trust was created.

There are many options that need to be considered when creating a Florida Dynasty Trust such as who the trust's assets (income and/or principal) should vest in and which state law the trust should be interpreted under. A Florida Dynasty Trust may be able to protect your assets from creditors even though you live in another state. To contact a Florida Irrevocable Trust Attorney. For more information on Florida Trusts please contact us to discuss your specific goals and circumstances or visit the Florida Estate Planning Lawyer Blog for general information.

As a Jacksonville Beach Estate Planning Attorney I have heard countless stories of trustees who have been entrusted to administer, distribute, and account for trust funds to family members and beneficiaries . . . who DON'T!

Sad but true, the death of a grantor, trustor, or settlor of a trust fund may reign in the terror and unabashed greed of many trustees.

The Florida Trust Code provides that a Trustee of an irrevocable trust is required to keep beneficiaries of the trust fund informed about the trust and its administration. <a href="http://www.jacksonvillelawyer.pro/lawyer-attorney-1335101.html" target=new>Florida Revocable Trusts</a> become irrevocable upon the death of one or all of the grantors.  Florida Statutes also dictate that the trustee make available to all beneficiaries certain accountings which will among other things:

• Show all cash and property transactions and all significant transactions affecting administration during the accounting period, including compensation paid to the Trustee; and

• Reflect the allocation of receipts, disbursements, accruals, or allowances between income and principal when the allocation affects the interest of any beneficiary of the trust.

If you are a Qualified Beneficiary of a Florida Trust and believe you are not receiving the information you are entitled to from a Trustee, contact a Jacksonville Beach Trust Attorney who can discuss with you several options on how you can remedy your situation.

When you have a blended family or children from different marriages it is very important to have estate planning that deals with the various possibilities. All to often the standard will or generic documents can produce undesired results.

Take for example a Husband and Wife who each have children from a prior marriage. Husband and wife each want to support each other in the even they pre-decease each other. The problem is created when the Husband dies first, and leaves everything to the wife. Now the wife dies and leave everything to her children, essentially disinheriting the husband's children.

There are several ways a Florida Estate Planning Lawyer can address these issues and achieve the desired results of the husband and wife.

Over the past summer, Alaska has become one of a few states to allow pre-validation of a will. The state legislature also took the law a step farther and allowed trusts to be validated by the grantor before they pass away. In order to explain the new process it is essential to know how most states operate in the probate process. In Florida, if a beneficiary wishes to contest a will, the document must first be submitted to probate. The probate court will not allow probate proceedings to proceed unless the testator is deceased which eliminates the crucial witness of the document, the testator. For this reason, Florida subjects wills and trusts to a number of formalities in order to be deemed valid.

In their effort to reduce will challenges, the Alaska law allows the testator to accurately express their intentions before they die rather than allowing the process to occur afterward. The process first starts by notifying all interested parties and serving them with a copy of the will or trust. The parties then have a specific deadline for filing a challenge to the document, usually 3 to 4 months, before they permanently lose the chance to contest the will. If there is a challenge, the testator will be there to confirm the validity of the document. Since a court can verify duress, undue influence, and capacity while the testator is testifying, the judge can make a final ruling on the authenticity of the will or trust.

Although Florida has not adopted any law of this kind, Alaska allows non-residents to take advantage of their laws. However, a will must be probated in the decedent's state of residence so it is doubtful a Florida court will give any significance to an pre-validated Alaska will. On the other hand, trusts are separate legal entities from their creator so pre-validating this document may prove critical in probate proceedings. A Florida Estate Planning Lawyer offer assistance to your estate plan and answer any further questions concerning wills and trust documents.

With Florida Trust Litigation on the rise, it is important that trustees preform their duties properly.

One of the primary duties of a Florida Trust trustee is to keep accurate records of all acts performed by him in regards to the trust estate. In Florida, trustees have this duty, known as an accounting, which requires providing these records to the trust beneficiaries. The trustee's accounting should be a reasonably understandable report from the date of the last accounting, or from the date on which the trustee became accountable, that adequately discloses the information required.

Fla. Stat. § 736.08135(2) states the requirements of an accounting:

a) The accounting must begin with a statement identifying the trust, the trustee furnishing the accounting, and the time period covered by the accounting.

b) The accounting must show all cash and property transactions and all significant transactions affecting administration during the accounting period, including compensation paid to the trustee and the trustee's agents. Gains and losses realized during the accounting period and all receipts and disbursements must be shown.

c) If feasible, the accounting must identify and value trust assets on hand at the close of the accounting period. For each asset or class of assets reasonably capable of valuation, the accounting shall contain two values, the asset acquisition value and the estimated current value.

Not everyone is entitled to an accounting and while if the grantor is the trustee, the accounting can be waived. There are many other provisions of the Florida Statutes that deal with accountings. If you are a trustee of a Florida trust or a qualified beneficiary of a Florida Trust and want to find out about your rights, you should contact a Jacksonville Estate Planning Lawyer or Florida Estate Planning Lawyer to discuss you options.

When a Florida Trust is created, the creator of the trust designates a trustee to monitor the trust. There is great responsibility that comes with being the trustee because this individual, or group of individuals handles the distributions to the beneficiaries according to the terms of the trust document. The terms may place numerous restrictions on the distributions made to beneficiaries or the trust may give broad discretion to the trustee to make the distributions. In addition, Florida law places additional requirements on a trustee that may not be apparent from the reading of the document. Circumstances can arise where a trustee wishes to resign their position as trustee.

In order to resign your position as trustee in Florida, you must comply with Florida statutory law. Florida Statute § 736.0705 governs the resignation of a trustee. It says that a trustee may resign if at least 30 days notice is given to all qualified beneficiaries, the settlor (creator) of the trust if still living, and all co-trustees. A trustee can also petition the court for resignation and then may be relieved of their position with the courts approval.

This does not mean that the trustee will escape liability for acts done before the trustee’s resignation. If the resigning trustee has committed some breach of their duties to the beneficiaries, they can still be held accountable for those acts. For more information on your Florida Revocable Trust or if you have any trust administration questions contact a Florida Trust Lawyer today.