Articles Posted in Estate Planning

For several years the VA has been working on changes to the rules for qualification of certain benefits dealing with transfers, a look back period, assets in trust,  and income.  Tomorrow the following rule change will be published, watch for some analysis on this and how it has changed in the next few days.

You can download a copy of the new rule here  2018-VA Rule Changes

Designating a Preneed Guardian for your Minor Child in Florida

Designating a preneed guardian for your minor child is one of the most important things a parent can do. A designation of preneed guardian is a legal document that permits you to choose the individual who will care for your children if you pass away. You can only choose a guardian for minor children. In Florida, most people use a will to designate the preneed guardian of a minor.

How does a will designating a preneed guardian for a minor work?

The Florida Elective Share statutes has made it almost impossible to disinherit a spouse from your estate outside of a premarital, prenuptial, or post-nuptial agreement. In 1999, the Florida Legislature enacted what we now call the Florida Elective Share Statute, which was amended in 2016 and 2017 to provide even more protections to the surviving spouse.

The objective of the Florida Elective Share Statute is to protect surviving spouses by ensuring that they have a right to part of their spouse’s estate upon their death. The Elective Share equals 30% of your spouse’s elective estate, which comprises the spouse’s assets. These assets include probate assets and non-probate assets such as 401(k)s, IRAs, life insurance policies, pay upon death accounts, and revocable trusts.  See Florida Statute 732.2035.

However, you must file your election to take the Elective Share within six months of receiving notice of administration of the estate or within two years after the decedent’s death. Sometimes if might be appropriate to move for an extension of time to file an elective share; however, the absolute latest date in which you can file your election is within two years from death of your spouse. Ironically, this is the same time that a normal creditor is given to file a claim in an estate.

Tortious interference of a testamentary expectancy is a “tort” or a wrongful act that causes economic harm to another person, and allows for compensatory and punitive damages.

The plaintiff must prove the following elements to establish a claim for the Tort of Intentional Interference with Expectancy:

  1. decedent had a fixed intention to leave a portion of his or her estate to the plaintiff and

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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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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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.

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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Estate Planning for Millennials

Millennials are growing up and doing so fast, and as we all know, young adulthood is full of important milestones.  Florida millennials are now graduating from college, landing their first “adult” jobs with benefits such as 401k matching, life insurance, and pension plans.  This generation is now starting to make big decisions such as buying homes and starting families.  Now is the time that millennials should start to begin estate planning.

Estate planning has the stigma of being something that only the elderly and the terminally ill consider.  However, estate planning is much more effective when started at an early age.  No one can predict the future, and every person benefits by having a will, trust, and a power of attorney.

The great thing about estate planning is that you can adapt and change the plan as needed.  You don’t need to wait until you are married and have children to create the plan.  Moreover, you still have many friends, loved ones, and relatives that you may wish to pass assets or control your financial and health care decisions if you become incapacitated.  If you ever become married, divorced, or have children the estate plan can always be modified.

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