Estate Planning

October 29, 2014

Revocable Trusts and Asset Protection

Many times we get questions from clients asking if their revocable trust provides asset protection from creditors. The answer to this is the typical legal answer “It Depends”. That is it depends on who owes the money. In Florida a revocable trust can provide some limited protection against the creditors of your beneficiaries through a spendthrift clause, but it will not provide protection from the creditors of the person who creates the trust. Upon your death, the assets in your revocable trust are available to your creditors.

There is a new type of irrevocable trust that is similar to a revocable trust in terms of management, control, and no negative tax effects. This special irrevocable trust is called an IPUG and can be structured to provide asset protection for the items placed in the trust.

An IPUG can be designed to protect an entire asset, the principal, or the income from the asset. The most common design is to protect the entire assets. If you are concerned about protecting your assets from future creditors and the creditors of your children, an IPUG may be the right choice for you.

August 14, 2014

Do I need to go through a lawyer to make a will in Florida or can I use a website like legalzoom?

by David M. Goldman

You can use a website or create your own will in Florida, but we find that some people do not create valid wills, or create wills that do things other than what they want. We only charge $200 for a will so an online will does not save very much considering the risks.

If you want to create your own will be sure that you sign the will at the end and in front of two witnesses. There are benefits to using a self proving affidavit, but one is not required under Florida law. Of course, most lawyers will include a self proving affidavit with the will that they prepare for you.

Many online wills or wills that individuals try to create do not include provisions for things that happen routinely. Some examples are a named person dies simultaneously, shortly after you, or before you. An improperly drafted will could expose your belongings to their creditors in such a case.

July 29, 2014

Dangers of Relying on Joint Accounts for Estate Planning in Florida

by David M. Goldman

Many people see joint accounts as a cheap and easy way to avoid probate, since joint property passes to the join owner at death, but these accounts can actually be quite risky when it comes to estate planning.

Joint ownership of accounts can be a great way to easily pass assets to another owner at death. Joint ownership is also a great way to plan for an elder person’s incapacity, since the joint owner of the account can pay bills and manage investments if the primary owner falls ill or suffers from any other sickness.

There are some potential downsides to joint ownership of an account. The biggest factor to consider is the risk of joint ownership. Joint owners have complete access to the account, and the ability to use the account funds for any purpose. When children are made joint owners of an account, it is often the case they can take money without consulting with the other children.

July 28, 2014

Banker Suicides indicate Stress of the Profession.

by David M. Goldman

If your family works in a high stress profession is a good idea to make sure you and your family keep their estate plans up to date.

The unexpected deaths of finance workers in the past few months by suicide around the world have raised concerns about mental health and stress levels of the banking profession.

JP Morgan executive director Julian Knott, 45, killed himself after shooting his wife Alita Knott, 49, to death with a shotgun. Julian worked for JP Morgan until July 2010, before he and his wife moved to the United States. Before the move, Alita had opened a nursery in Southwick, West Sussex and remained the nursery’s care provider until 2013.

July 18, 2014

Probate: Is it a good idea to give your heirs their inheritance while you are still alive?

by David M. Goldman

Planning an estate can be a difficult process, but also a rewarding one because it helps to ensure that a person’s heirs will be provided for after he or she dies. Many assume they should wait until after death to convey assets to their loved ones, but there are some benefits to giving assets to an heir while still alive.

There are two types of taxes to consider when determining when to give an heir your assets. A decedent who gives his or her assets to someone while still alive may have to pay a gift tax. This is a tax imposed by the federal government on any transfer of property. Property includes intangible items such as cash and stocks, as well as physical items such as vehicles or furniture.

The most important aspect of gift tax to understand is the unified gift and estate tax credit, which allows a person to give property tax free up to $5.34 million throughout his or her life.

July 15, 2014

Estate Planning: The Risk of Creating Your Own Will. Is it valid?

by David M. Goldman

The Florida Supreme Court recently decided the long and costly case of a deceased woman who tried to write her own Will using an online legal form.

In Aldrich, v. Basile, Ann Aldrich used a pre-printed legal form to draft a Will. She did this most likely to avoid paying an estate-planning attorney. This Florida Supreme Court Decision resulted in costly legal fees and most likely years of anguish for her family.

Deciding who would inherit Ann Aldrich’s property was appealed twice, which was finally decided by the Florida Supreme Court. The court’s decision of who would inherit the property was most likely not what the deceased had intended. Justice Pariente wrote in her concurring opinion the result of the court’s decision came not from the interpretation of Florida law but from Ann’s mistake of using an online form that did not adequately express her specific needs.

June 25, 2014

Should I use a UGMA, UTMA, 529, or Trust?

by David M. Goldman

Estate Planning:

There are a number of ways to save money for a family’s children that will release the money to them at an early age in their life.

The two most popular options are either through the Uniform Gift to Minors Act (UGMA) or through the Uniform Transfer to Minors Act (UTMA). Both of these were created with a similar goal, to save money for children to use when they become legal adults. While the acts are similar, both have specific nuances that must be taken into account.

June 23, 2014

You Thought the IRA was Protected From Your Kid’s Creditors!

by David M. Goldman

Last week, The Supreme Court unanimously ruled that the funds contained in an IRA are not protected from creditors after bankruptcy.

You may need to reevaluate how your estate plan deals with your IRA. If your beneficiaries live in Florida, this may not be a concern because the Florida Legislature has an IRA exemption statute which includes inherited IRAs. As it is difficult to predict where your beneficiaries will live at the time of your death, you may not be able to count on the Florida statutes to protect your beneficiaries.

We have recommended to make an asset protection trust the beneficiary of your trust to protect from the retirement funds from the loss that could be associated with creditors of our client’s beneficiaries (typically their spouse or children). Many have not seen the need for this and as a result, there may be many families using traditional beneficiary designations which place their retirement funds at risk.

June 19, 2014

Probate: Do Stepchildren Inherit from the Will like Biological children do?

by David M. Goldman

In today’s world, it is common to see blended families full of biological and stepchildren. It is crucial for parents, who wish to leave an inheritance to their stepchildren, make a will or trust because stepchildren do not have the same inheritance rights as biological children.

Florida’s probate laws do not treat stepchildren as a person’s legal heir, which means stepchildren do not have an automatic right to inherit from their stepparents. Remember that your children may be the stepchildren of your spouse, and depending on who lives longer may be unintentionally disinherited.

This does not mean that stepchildren cannot be included in the will. To ensure a step-child can inherit from the estate, he or she must be specifically named as a beneficiary.

June 12, 2014

Florida Probate Law: The Risks of Avoiding Probate Through Changing Ownership

by David M. Goldman

Probate is the system the court uses to administer a person’s estate, either through a will or through intestate succession. Clients often ask for ways to avoid the probate process, such as adding a child to their bank account or adding the child’s name to the deed.

Adding a Child to a Bank Account

In most cases, adding a child to your bank account is not a good idea. A parent who adds a child to his or her bank account, may interfere with the will, and could put the account’s funds at risk.