Articles Posted in Asset Protection

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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Florida Asset Protection Trusts and Domestic Asset Protection Trusts Can Be Effective Prenuptial Agreements

Planning for a divorce is never easy or fun, but divorce is an unfortunate reality in today’s world where almost half of all marriages end in divorce.  Without legal planning, a spouse seeking a divorce is likely entitled to an equitable portion of the marital property.  The traditional way to protect property from a divorce was through a prenuptial agreement or postnuptial agreement; now there may be a better alternative by using a Florida asset protection trust.

So what happens if there is no legal planning?  If the married couple fails to plan for the dissolution of marriage adequately, then the division of marital property will be left to the discretion of a judge during the process of an expensive and time-consuming divorce process.
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One issue that has come before the Supreme Court is what is actual fraud, and does actual fraud included fraudulent transfers.  Stated in another way, is it fraud to accept a fraudulent transfer.  For a long time the answer depended on the judicial circuit.  Now the Supreme Court has provided a firm answer.

So before we can determine the importance of the Supreme Court’s decision it is important to understand what actual fraud is in the context of bankruptcy law.  The bankruptcy code bars the discharge of “any debt… for money, property, [or] services… to the extent obtained by… false pretenses, a false representation, or actual fraud.”

So how does the reception of fraudulent transfers fit within this definition of actual fraud?

The first step in answering this question is to determine how fraud is defined.  The modern law concerning fraudulent transfers comes from the Uniform Fraudulent Transfers Act (UFTA), which was adopted in most states including Florida.  The UFTA defines fraudulent transfers against present and future creditors as “a transfer made under obligation incurred by a debtor if made with actual intent to hinder, delay or defraud any creditor of the debtor.”

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In Florida it can be crucial to do Estate Planning For Second Marriage

More and more Americans are getting remarried which is causing estate planning to become more complex.  People are living much longer than in the past, which means that the rate of remarriage is occurring at a much higher frequency.  A second marriage adds new obligations and rights for the new people in your life, while still keeping the obligations from your first marriage.

The effect of multiple marriages is that it could create multiple claims on a person’s estate.  Many estate planning issues can be resolved with careful planning.  Here are some key issues for estate planning for a second marriage.

1. Length of the New Marriage

The first issue that is common in estate planning is the duration of the subsequent marriage.  For instance, say a person has a spouse with early Alzheimer’s.  This person also has a retirement plan that named his children outside the marriage as beneficiaries.  The couple has been married for eight years, and the person would be destitute without the spouse’s IRA.  It may be time to think about changing the estate plan to include the new spouse, which would desperately need the funds from the retirement plan.

2. Children from the First Marriage or outside the current marriage

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Yes A Spendthrift Provisions Can Protect Against Civil Judgments

What is a Spendthrift Provision? One of the best forms of asset protection we can provide is through a trust that contains a spendthrift provision.  In a revocable trust, a spendthrift provision has some significant benefits such as protection against your beneficiaries’ creditors.

So what exactly does a spendthrift provision do?  A spendthrift provision is a provision within a revocable or irrevocable trust that limits the beneficiary’s access to trust.  This restriction protects the trust property in two ways, it prevents a beneficiary from selling his or her interest in the trust property as a beneficiary, and it prevents the beneficiary’s creditors from compelling the trustee to make distributions except where this would void public policy like in the case of alimony, child support and some civil judgements.
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In Florida, Medicaid is a federal and state level program that offers health care assistance to members of the program.  Medicaid is a complicated program that is administered differently on a state-by-state basis.  There are many common misunderstandings regarding Medicaid.  This article will help to debunk some common myths and set the record right.

1) Status of a Home in Florida

FALSE. One common myth is that Florida residents cannot own a home and also qualify for Medicaid.  This is not true.  Florida does place a cap on the amount of gross income and assets a person can own and qualify for Medicaid.  A person with too many assets or income is ineligible to receive Medicaid benefits.

What many of our clients do not realize is that long-term health care is expensive, and will only get more expensive with time.  Many people are shocked when they learn about the actual costs of long-term health and feel helpless because they cannot afford it.  The good news is that long-term health care can be affordable with careful estate planning.

So just how expensive is long-term health care?  Lets look at the average costs both in the United States and in Florida. The median cost of a private nursing home in the United States as a whole increased by 1.24 percent from 2015 to $92,378 a year according to studies performed by genworth.com

The median cost of living has also grown in Florida.  The cost of private nursing home care has also risen significantly in the past few years.  The median cost of a semi-private room is $89,060, while the median cost of a private room is $100,375.  Nationwide, Genworth reports that the median cost of a semi-private room in a nursing home is $82,125, which is up 2.27 percent from 2015.

A Florida Asset Protection Trust Is a Great Gift for an 18-Year-old that can be used for the rest of their life.

Almost every parent can remember the way he or she felt on the day their child turned 18.  It’s the day their son or daughter takes their first steps into adulthood.  Officially, they are no longer the baby you used to hold in your arms or the toddler that just learned to walk.  They are adults living in the real world with all of its risks and rewards.

Parents know this mixture of feelings very well.  They are excited for their child’s future but also nervous because they are still so young and apt to make mistakes.  Many parents want to celebrate the child’s birthday by buying them a new car or sending them on a trip.

While these gifts are great, we often tell our clients the best gift you can give your child is an asset protection trust.  A trust that can last the rest of the child’s life, which allows the parents to invest in the child, protect the investment from creditors, and allows the parent to retain some control over how the child uses the assets, after all, they are only 18 and most professionals would agree that young adults do not start making good decisions until at least 25.

In a few months my son will turn 18.  One of the first things I will have him do is create a Florida Asset Protection Trust.

What is a Florida  Asset Protection Trust?

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I have recently become acquainted with a bank who does business very different than traditional banks.  As we do Trust funding for many of our estate planning, elder law, and asset protection packages, we have the opportunity to interact with many banks around the area.  One of the recent banks that I have been impressed with because of their understanding of revocable and irrevocable trusts is Seacoast Bank.  There interest rates much higher than many of the local banks and offer trust services at a good value.  They recently interviewed me about Florida estate planning and asset protection and here is the link to the interview.

Remarriage Protection

Many lawyers proclaim to have remarriage protection in their estate planning documents, but few estate plans deal with these issues completely. A traditional trust that deals with remarriage will include language that permits or limits the surviving spouse rights to benefit in the event of future marriage.  While this may seem like a good way of dealing with this potential conflict, it is often insufficient to protect the surviving spouse and kids from the numerous methods that can be used to gun a trust prior to the marriage.  In the end, your kids are the ones that loose out.
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