Estate Planning

December 9, 2007

Will a “No Contest” Clause Keep Your Estate Out of Court in Florida

Many couples and individuals want to place no contest clauses in their Florida Wills. The purpose of a no contest clause in a will is to keep the beneficiaries heirs from fighting over who gets what or how assets are distributed upon your death.

In many states no contest clauses become fights over the language used in the Florida will. Florida does not recognize no contest clauses for Florida Wills. Although it is possible to have a no contest clause if the laws of another jurisdiction or state are chosen to govern the will.

One example of a no contest clause that was struck down in Louisiana is found on Your Louisiana Estate Planning Blog. The article mentions a clause which stated that if any “named legatees should contest any provision in this will, then the naming of that person in my will shall be struck and they shall not be considered to be a legatee.”

December 5, 2007

Credit Card Debt and Offers for the Incompetent: Power of Attorney, Guardianship, or Credit Freeze

by David M. Goldman

Kimberly Palmer of U.S. News & World Report wrote an article on the Alpha Consumer Blog where she discussed these issues. Her reader wrote:

My husband, who is retired, has dementia. He responds to credit card offers in the mail and charges things to them, even though he shouldn’t, because he is on limited Social Security disability income. He knows better, but his mind is weak. He always says he won’t use the cards, but he still does. Even if I cut the cards in half, more come in the mail. We are now in $15,000 of debt, and it continues to rise. How can I get him to stop making charges? Will I be responsible for the debt, even if he passes away before I do?

She offers several solutions including 1- using http://www.optoutprescreen.com/

2- using a credit monitoring service.

December 3, 2007

Speaking (or Emailing) from the Grave

by David M. Goldman

Gerry Beyer, author of the Wills, Trusts & Estate Professors Blog has an interesting article on a novil service called Deathswitch. This service could be used to provide some of the services I have discussed in relation to the Digital Asset Trust.

There are many things that people may want to be handled a certain way after their death. Deathswitch.com, offers peoplethe ability to send messages or inform people in the event they are critically injured or disabled.

Deathswitch is an automated system that regularly prompts users for a password. If the user fails to respond timely, the system assumes that he or she is dead or critically disabled and e-mails pre-scripted messages. Each person can pick the frequency of the prompts and the maximum time to respond. These time-frames can range from one day to one year. Gerry Beyer states that some of the ways in which Deathswitch can be used include:

December 1, 2007

NEW Estate Planning Guide from American Bar Association

by David M. Goldman

Whether you live in Jacksonville Florida or anywhere in the United States, you should find this guide helpful in educating yourself on what the various estate planning documents are used for.

This Guide is downloadable in its entirety; or it can be viewed online by chapters, all in PDF format, which include:

Ch. 1: Getting Started

December 1, 2007

Durable Power of Attorney or Guardianship / Conservatorship

by David M. Goldman

One of the most common questions I get is “What is the difference between a Durable Power of Attorney and a Guardianship?”

Richard Shea an attorney in Connecticut who publishes the Connecticut Estate Planning & Elder Law Blog has a good description of each and the differences in an article titled Power of Attorney v Conservatorship.

He summarizes the differences by stating:

A power of attorney is a relatively low cost and private way to decide which family member or trusted friend will have the legal authority to carry out your wishes if you can no longer speak or act for yourself. If you do not have a power or attorney or if your power of attorney is not drafted properly, and something happens that results in your inability to make decisions, your family/friends may later face court proceedings and court supervised Conservatorship. A court proceeding is not only costly, but the person appointed as your Conservator may not be the person whom you would have chosen yourself. And, as stated above, not having a properly drafted power of attorney could significantly limit financial and/or Medicaid planning that could be done on behalf of the principal.

November 28, 2007

Maximizing Charitable Gifting in Your Estate Plan

by David M. Goldman

Many Florida residents include language in their Florida estate planning documents which leave either a fixed sum or a percentage of their estate to one or more charities.

The most common gift is an outright bequest of property to a named charity from a Florida Will or Florida Revocable Trust. The gifts can be any type of property and often consultation with a tax adviser as to which property to leave can produce additional tax savings. Analysis of the size of the estate, and the cost basis of various assets can make significant differences.

In addition, careful attention needs to be made to the selection of the asset and how it is described in the documents. Contingencies can be made for a change in assets if the person wants to make a gift even if that asset does not exist.

November 21, 2007

NFA Firearms & Gun Trusts? Are they at risk with the Supreme Court?

by David M. Goldman

This week the Supreme court decided to review a Washington D.C. Court decision that struck down a 31 year ban on pistols.

Many believe that the argument and decision by the Supreme Court will be based upon the widely contested interpretation of the 2nd amendment. Over the past few decades many have argued that the 2nd amendment of the United States Constitution was meant to only apply to states rights to arm their militia. The NRA, pro gun organizations, and many American have insisted that the 2nd amendment clearly applies to the individual rights of United States citizens.

Generally many communities have been imposing tighter restrictions on the rights of their state residents to own and possess guns of all types. The primary concern seems to be based around Title II Firearms (sold by Class 3 SOT dealers) which include silencers, short barrel rifles, and automatic weapons. Some states have restrictions on the ownership and possession of these devices in addition to the federal restrictions that are in place. Other states like Florida have no additional state restrictions at this time.

November 20, 2007

Do it yourself Estate Planning: Bad News Part 5

by David M. Goldman

Professor Gerry W. Beyer author of the Wills, Trusts, & Estates Professors Blog, as reported on a mistake in estate planning where a Another Self-Help Estate Plan Gone Awry. In this case a man decided not to consult with anestate planning lawyer. He transferred the family home to his stepchildren son and $150,000 of securities to his son.

The house was highly appreciated and as such was a poor asset to select to use as a lifetime gift. Because it was transferred during life, the children had to use the father’s basis instead of the price of the home at the death of the father. This resulted in over $80,000 in capital gains liability.

In addition the house, because it was transferred within 3 years of death, was still included in the father’s estate value and did not reduce his estate taxes.

November 19, 2007

Do it yourself Estate Planning: Bad News Part 4

by David M. Goldman

Professor Gerry W. Beyer author of the Wills, Trusts, & Estates Professors Blog, as reported on a mistake in estate planning where a “Do it Yourself” Estate Plan Backfires. In this case a mother who did not hire her own estate planning lawyer made a number a big mistake that ended up causing problems withe Medicaid eligibility.

The mother, a widow, was worth 500K. Her home is worth 400K and has 4 children. After her daughter and son-in-law declared bankruptcy and moved in with her, they suggest buying her home. Unfortunately the home was not transfered at fair market value, and the mother made part of the purchase a gift. Mom ended up not having assets to split between the children like she had intended, and if she needs to qualify for medicaid within 5 years she will be disqualified.

Some other examples of Do it your self wills and bad news are covered in my articles listed below

Do it Yourself Wills? More bad news and Do it Yourself Wills? a Good Idea or Not?

November 16, 2007

Gift to your children before year end!

by David M. Goldman

Tax breaks on dividends and capital gains for college-age dependents will end on January 1. In the meantime, families can still take maximum advantage of the current law.

Jacksonville Florida Estate Planning A significant source of tax savings for American families will disappear on January 1, 2008. That’s when changes Congress made to the tax code in 2007 go into effect, increasing the tax rate on unearned income college-age taxpayers receive from their parents. Simply put, Congress is cracking down on parents who transfer such assets as stocks, bonds and mutual funds to children to take advantage of lower income tax rates.

As a result, the Small Business and Work Opportunities Act of 2007 extends the higher tax rate to children 18 years old and to full-time students ages 19 to 23. For 2008, the unearned income of children that exceeds $1,800 will be taxed at their parents’ usually higher marginal income tax rate-making it more difficult to shift assets to children to, say, meet college costs. (The $1,800 limit adjusts annually for inflation. The limit is $1,700 for 2007.)