Estate Planning

November 2, 2007

Review Your Estate Plan. (And Your Parents)

Jacksonville Estate Planning Documents, Jacksonville Family Estate Planning If you or a member of your family was to have a crisis are you prepared? That is the question you should ask your Florida Estate Planning Lawyer or Attorney on a regular basis. Often we only look at significant events in our lives and do not consider the effects that a significant effect in our parents or children’s lives will have upon us.

When you review your Florida Estate Plan you should also review or remind your parents and adult children to review their plans also. There are changes in the laws which may prompt updates to your estate planning techniques. In addition, significant changes in your life including births, deaths, marriages, divorces, and changes in assets should trigger an estate plan review.

Generally when an Florida Estate Planning Attorney creates Florida Estate Planning Documents their duty is over once the documents are prepared. The obligation is up to you to seek a regular review of these documents.

October 30, 2007

Estate Planning and Insurance

by David M. Goldman

As a Florida Estate Planning Lawyer, I often advise people about the effects of an insurance payout on their beneficiaries or their taxable estate value.

Generally Life Insurance is not income taxable to the beneficiary of the policy but does increase the value of the estate. In the event that life insurance value would increase the value of the estate to the point that estate tax payment would be generated, it can be advisable to create a Florida Irrevocable Life Insurance Trust (ILIT). A Florida ILIT not only maintains the income tax benefits of traditional life insurance but also can reduce or eliminate the Federal Estate Taxes.

I recently read an article on Investors Business Daily that discusses the Pros and cons of company paid insurance. Anyone who has or is considering company paid insurance should read this article and review the taxable effects and investment costs with their accountant and financial planner.

October 30, 2007

No Free Lunch: Florida Seniors beware of free lunch offers!

by David M. Goldman

Jacksonville Elder Law Lawyer, Medicaid Planning Attorney Although there are legitimate “free lunch” seminars done by many respectable Florida Estate Planning Lawyers, the Securities and Exchange Commission (SEC) has found that many seminars may mislead seniors into making unwise investments. Florida Estate Planning Lawyers are prohibited from making advertising claims that are false and statements that are likely to mislead

The SEC was not investigating “free lunch” seminars by attorneys and primarily focused on investment and financial seminars. Many of the seminars made statements like “Immediately add $100,000 to your net worth.”

The report recommends that financial firms supervise sales seminars more closely. It also recommends that ongoing senior investment education efforts include education about “free lunch” sales seminars.

October 29, 2007

Successor Trustee: Duties and Responsibilities

by David M. Goldman

You have just been asked to be a successor trustee for a Florida Living Trust. What will your trustee duties and responsibilities be? Do you want to accept? Are their downsides? I ran across an interesting article and have applied some of it to Florida law. This note will help you to understand what some of the common issues are and will help you to discuss your options with a Florida Estate Planning Lawyer. Remember that all Florida trusts are different, and that many of your duties, responsibilities may not be contained in the document. Therefore your document will need to be analyzed with the New Florida Trust code.

First Lets discuss some of the background information that will be necessary to understand your duties and responsibilities.

A Trust is a legal entity. When assets are contributed to the trust, the trust separates the legal ownership (possession) from the beneficial ownership (the principal and income). Often trusts look very much like wills because they include instructions for whom your your assets will benefit after our death. Some trusts are created during the life of the person who creates them ( the settlor or grantor) and some are created after their death (testamentary).

Florida Living Trusts work by separating the equitable ownership (the trustee)from the beneficial ownership (the beneficiary).

Who are the people involved in a Trust? The grantor (also called settlor, trustor, creator or trustmaker) is the person whose trust it is. Married couples who set up one trust together are co-grantors of their trust. Only the grantor(s) can make changes to his or her trust.

The trustee manages the assets that are in the trust. Many people choose to be their own trustee and continue to manage their affairs for as long as they are able. Married couples are often co-trustees, so that when one dies or becomes incapacitated, the surviving spouse can continue to handle their finances with no other actions or steps required, including court interference.

A successor trustee is named to step in and manage the trust when the trustee is no longer able to continue (usually due to incapacity or death). Typically, several are named in succession in case one or more cannot act. Sometimes two or more adult children are named to act together. Sometimes a corporate trustee (bank or trust company) is named. Sometimes it is a combination of the two.

The beneficiaries are the persons or organizations who will receive the trust assets after the grantor dies.
Continue reading

October 26, 2007

How to change a WIll

by David M. Goldman

Clients often bring in Florida Will to amend which have been marked up several times. Usually, once there are so many changes that they cannot tell what the last change is, the decide to redraft or amend their will.

With a Florida Will, or a will drafted in another state, a Florida Resident cannot simply cross off part of a page or change the language on their own. The result will be that the court will look to see if they can determine what the original language was, and enforce it.

The reason for this is all Florida Wills, Florida Revocable Trusts, and Codiles (an amendment to a will) must comply with the Florida statute of wills. This requires that two people who witness each other and the person who is creating the will all witness each other signing the document.

October 23, 2007

IRS Issues Revised Form 706

by David M. Goldman

Last month the IRS released a newly revised Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, and Instructions to Form 706. The new form is to be used for estates of decedents dying after December 31, 2006 and before January 1, 2008, and reflects changes in law as well as indexing changes.

According to the instructions, the following items are new:

Use of the revision is only for the estates of decedents dying in calendar year 2007.
The maximum tax rate for the estates of decedents dying in 2007 has decreased to 45%.
The Small Business and Work Opportunity Tax Act of 2007, P.L.110-28, extends the application of income tax return preparer penalties to all tax return preparers, including estate tax return preparers.
The decedent’s authority over certain financial accounts in a foreign country must be reported on Part 4 – General Information.
Various dollar amounts and limitations are indexed for inflation, and the following amounts have increased:

The ceiling on special-use valuation is $940,000, and
The amount used in computing the 2% portion of estate tax payable in installments is $1,250,000.

Beginning with the estates of decedent’s dying and generation-skipping transfers occurring after December 31, 2003, the generation-skipping transfer (GST) exemption is equal to the applicable exclusion amount. ($2,000,000 for 2007).

October 22, 2007

Does your Estate Plan contain a Designation for Pre Need Guardian?

by David M. Goldman

What is a Pre-Need guardian and why is it important in Florida and other States? Very rarely do I run across Florida estate plans that have designated a Florida Pre-Need
Guardian. This simple document allows an individual if incapacitated to name someone in advance to act as your Florida Guardian. More importantly the Designation of Pre-Need Guardian allows you to say who you do not want to be your guardian.

Most Florida Estate Plans contain Florida Durable Powers of Attorney, but what if you need more than a Durable Power of Attorney? What if the Florida Court determines that you need a Florida limited guardianship or Florida plenary guardianship? What if a judge issues Emergency Guardianship orders? Who will be representing your interests. When you file a Pre-Need Guardianship with the Florida probate court, you are telling the world, and more importantly the judge who your preference is in the event that a Florida Guardianship is ever established.

You should speak with your Florida Estate Planning, Elder Law, & Guardianship Lawyer about implementing your rights to determine who you would to be appointed as your Florida guardian.

More information from the Florida Statutes Continue reading

October 22, 2007

Florida Statute of Wills: Wills, Revocable Trusts, Codicils

by David M. Goldman

When making a Florida Will, Florida Revocable Trust, or Codicil to a Florida Will there are several technicalities that must be complied with for the documents to be valid.

1) Who can make a Florida Will, Florida Revocable Trust, or Codicil to a Florida Will:

The answer to this can be found in section 732.501, Florida Statutes, where it states: Any person who is of sound mind and who is either 18 or more years of age or an emancipated minor may make a will.

October 19, 2007

Do it Yourself Wills? More bad news

by David M. Goldman

I have previously written about Doing your own will in a post entitled Do it Yourself Wills? a Good Idea or Not?

Gerry W. Beyer of the Wills, Trusts, & Estate Professors Blog had an article that disccusses some of the other problems Do-it-yourself estate documents – the attractions and the dangers

In his article he discusses another problem that occurred because of a poorly drafted will stating that:

many seemingly straightforward cases contain large underwater stones. In one case, for example, stepchildren ended up paying $100,000 in legal fees to claim their inheritance; the reason is that their step-mother’s will left everything to her “children,” but she had never legally adopted her step-children

October 18, 2007

Durable Power Of Attorney, Living Will, Trusts: & Co-Agents

by David M. Goldman

Often Estate Planning clients struggle with their spouse or self over who to pick as an agent to represent them in a Florida Durable Powers of Attorney ( Financial decisions), Florida Living will & Designation of Health Care Surrogate ( Health care decisions) and Revocable Trusts (Financial Management).

Initially clients might thing of using a Co-Agent. This can cause many problems and unforeseen circumstances and must be done with the correct expectations and knowledge of the potential problems. Michael Keenan has an article discussing several of these issues, titled Be Careful With Co-Agents. In summary, before choosing co-agents you should consider whether they get along well with each other, and what to do if they do not in the future.

In addition, what if one lives far away or moves after the documents are created. Some hospitals or financial institutions may require that both act together unless each co-agent has “several powers” or “joint and several powers” This can be difficult and impracticable. You put your financial and health interest at risk due to delay in execution of the documents.