Are you getting close to retirement? Do you want to develop an effective estate plan but you are not sure how to start? If your answer to one of these two questions is affirmative, you have come to the right resource. We are all aware how important it can be to come up with the right estate plan, especially when retirement is just around the corner. You need to make sure that your assets are going to go to the right people, as well as that these are not going to be burdened with too many taxes. So, keep on reading and discover some great tips on estate planning.

1 Draw up a will

No matter how difficult it is to think about this final stage of life, you should create a will. This is an essential part of estate planning, as it will decide who will inherit your assets. Apart from real estate, you can name who will inherit non-financial assets – these can include cars, jewelry pieces or other valuable items.

It’s a good idea to consult with a professional lawyer, as such an attorney can help you come up with the best version of your will. You should also know that certain assets cannot be listed in the will; for example, you cannot leave your retirement account or life insurance policy to another party. Instead, you will have to consult with the financial institution in question and see the existent regulations.

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Most seniors do their best to prepare for the unfortunate, inevitable, outcome that one day they will pass away.  They create their will, and with painstaking detail allocate their hard-earned money and assets to spouses, children, family, friends, and charities.  But what if there is not money or assets left over to leave for loved ones?  What many do not realize is that paying taxes, helping the family, and subsiding off of what Social Security provides are not the things that typically bankrupt most seniors.  So what is?  A simple Google search into Long Term Health Care will bring up horror stories many Americans experience and will continue to face.  Hard working Americans, who have been saving for 40 years, end up penniless at the end.  It is expected that 70% of seniors over the age of 65 will need long term health care at some point in their life.  With the incoming influx of baby boomers, the problems only seem to compound.  Combine that with the fact that the estimated cost of staying in a nursing home is close to $9,500 dollars a month, one can easily see how their life-time savings can disappear.  When the average time spent in long term health care is three years, at $9,500 a month, that comes out to $342,000.  Everyone wants to ensure that their spouse, children, and family are provided for as best as possible, especially when they can no longer be an influence.  Below you can find more information on what probate is, the benefits and problems with Medicare and Medicaid, as well as some typical ways people can secure funds and assets.

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The number of people living with Alzheimer’s disease in the United States is growing rapidly. So, too, are the number of myths surrounding the disease and other forms of dementia. Let’s begin by looking at what we do know about the prevalence of Alzheimer’s before investigating some of the more common myths.

Approximately 5.5 million Americans are currently living with Alzheimer’s disease. Of these, some 5.3 million are 65 years of age or older. In addition:

 

  • One in 10 people 65 and over has Alzheimer’s disease
  • Nearly two out of three Americans with Alzheimer’s disease are women
  • African-Americans are approximately twice as likely as older Caucasians to have Alzheimer’s or other forms of dementia
  • Hispanics are about one and one-half times as likely to have Alzheimer’s or other dementias as older Caucasians
  • As the population grows older, the number of new cases of Alzheimer’s disease is expected to soar
  • Today, someone in the United States develops Alzheimer’s disease every 66 seconds. By 2050, this figure is likely to increase to one new case every 33 seconds

Now let’s look at some of the most common myths surrounding Alzheimer’s disease and other forms of dementia.

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Is Equal Fair with Estate Planning?

Most of our clients want to treat their children fairly and equally.  Splitting assets equally among the children may be easy, but is it fair? When dividing assets, it is often important to determine the needs of the kids as well as what you have previously provided.  This is where it can become difficult.

Some gifts can be considered advancements against an inheritance, but most people do not take the right steps to have them considered an advancement.  A trust can be designed to deal with previously gifts or outstanding loans.  After all isn’t an outstanding loan really a debt that is now owed in part to the other siblings.
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There have been many reports of unintended consequences related to the use of online wills over the past few years.  In fact, I have written about many of these issues on this blog.

It is important for individuals to understand that there is a difference between a document and a plan.  While both contain words it is the way those words are used that determines the difference.  Many Internet forms are generic and may not allow the permit the person named to manage the assets the powers necessary to properly manage or protect the assets. For example, in order to sell the testator’s property, the executor may have to obtain the court’s permission, and consent of the beneficiaries.  This can create additional costs and delays in the distribution of the assets.

This can be important when dealing with a homestead where the asset is not typically subject to probate.  If the homestead is owned by a trust and the house needs to be sold, the trustee can determine if a distribution or sale of the asset is best.  When an individual does not have a will or creates an online will, the home is typically not subject to probate and will pass outside of probate.  This can cause problems including delays and thousands of dollars in additional costs when some of the beneficiaries want to sell the home, and others do not.

The Florida Asset Protection Trust.

Most financial planners are unfamiliar with some of the modern twists available with Florida Asset Protection Trusts.  This is a special type of irrevocable trusts.  They tend to be familiar with the older style of irrevocable trust that can pose several problems for those who use them. These problems include:

  1. Loss of control over the management of the assets;
  2. A separate EIN number for tax reporting purposes;
  3. A larger tax bills because of the way traditional irrevocable trusts are taxed;
  4. A loss of the step up in basis available to assets owned by an individual upon the death of the settlor; and
  5. The inability to change provisions or beneficiaries in the future.
  6. The inability to transfer the ownership of insurance, annuities, life insurance and other securities.

While our Florida Asset Protection Trust is an irrevocable trust, this trust does not have any of the traditional problems that are discussed above nor it is a “self-settled trust” as defined by the IRS.  Because the Florida Asset Protection Trust is not self-settled, there is no 10 year lookback on transfers in the case of a bankruptcy. The Florida Asset Protection trust that we use is an Irrevocable Pure Grantor trust  (IPUG™). With this special type of Florida Asset Protection trust many of the advantages  and flexibilities that are traditionally only found with a revocable trust can be provided while maintaining the strong asset protection that can only be accomplished with an irrevocable trust.  Some may ask, why should we use an irrevocable trust instead of a revocable trust.  Here is a summary of the reasons that our Florida Asset Protection trust is superior to the traditional revocable trust and does not pose the problems that a traditional irrevocable trust presents:

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How a Community Property Trust Can Save Tens or Hundreds of Thousands of Dollars in Capital Gains Taxes
Community property trusts can save your clients tens of thousands of dollars in capital gains taxes, and that is just one of their many benefits. This lesser-known strategy is not necessarily the best fit for all couples either because of their assets or state of residence. However, for households you work with that can make the most of them, it is a planning tactic that could have a significant impact on keeping more of the value of their estates in the family.

These trusts offer a huge benefit to couples who take advantage of them. There’s also a lot to gain for their financial advisors. Thanks to the double step-up for property held in this type of trust, your clients will retain a significant amount of wealth that would otherwise go to the IRS because of capital gains tax. So it is a solution that provides better cash flow for your clients and more assets under management for you: a win-win for all parties.

What is community property, and what is a community property trust?

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How Does A Step Up In Basis Work?

Capital gains taxes are one of the more confusing taxes that American citizens have to pay.  The best way to explain capital gains taxes is through examples.  This article will include plenty of examples, but in an attempt to define these taxes, capital gains taxes are the tax accessed on an asset when it is sold and has increased in value.

Capital gains taxes are a percentage of what a person buys the asset for (the “basis”) and what the amount the property was sold at (the “step-up”).    Most assets have a tax basis, and generally, this is the amount a person paid for the property originally.   When you inherit an asset, the basis is usually set at the amount the property is worth on the day of the transfer.

It is important to know how much an asset is worth on either the day the asset was purchased or on the day the owner dies and the property is transferred.  Once the property is sold, the tax will be accessed on the difference between the first value and the amount the property was sold for.  Most people pay about 15 percent on the difference.  Higher earners may have to pay as much as 23.8 percent capital gains tax.

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How To Object To The Final Accounting of a Personal Representative in Florida

The final accounting can be complex. As many Florida residents might know, the probate of an estate can be a very lengthy process that can be full of mistakes.  Mistakes are often made when the estate’s personal representative makes the final accounting of the estate.  What many people do not realize is that they have the right to object to the final accounting.

The Florida probate rules state that an interested person has 30 days to object to a Final Accounting and Petition for Discharge after the documents have been served.  However, a simple broad objection will not work.  Written objections must state what parts of the accounting the person is objecting to, and what specific grounds the objections are based upon.
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A common question our Jacksonville Homestead Lawyers receive is “When A Spouse Dies, Does The House Automatically Transfer To You?”

One of the more common Florida probate questions our clients ask the Jacksonville homestead lawyers at The Law Office of David M. Goldman PLLC is whether a house automatically transfers to the living spouse when one spouse dies?  The answer often depends on many factors; there is no simple yes or no answer.

Florida does offer some of the best homestead laws in the nation.  Before explaining the great homestead benefits that Florida offers, let’s see how the law devises a property when one spouse passes away.  Remember a home may or may not be a homestead.  For this article, we will use the situation where the home is a homestead unless otherwise noted. The relevant homestead law comes from Article X, Section 4 of Florida’s Constitution.
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